Judgment:
1. Heard both sides. This is a departmental appeal against the impugned order which reduced the penalty of Rs. 2 Lakhs imposed by the Dy.
Collector of Customs to Rs. 2,000/- by the Commissioner (Appeals).
2. The learned S.D.R. reiterates the grounds of appeal which is re-produced below:- "The order passed by the Commissioner (Appeals) reducing the penalty amount from Rs. 2,00,000/- to Rs. 2,000/- is not legal and proper for the following reasons: Commissioner (Appeals) has reduced the penalty amount drastically on two grounds:- 1. The results to the test were not made known to the importers for very large time.
2. Offence of disposing off the sub-standard drugs was mitigated by the face that goods were sold as Animal and Paultry feed and not for the use by human being.
None of the above grounds are correct to justify the reduction in penalty for the following reasons:- Goods were cleared under Letter of Guarantee in July-1993, test results were reported in Nov. 1993 and in Dec.1993. S.C.N. was also issued to the importers. The period of 4-5 months for test results in such cases are quite normal and cannot be considered to be extra ordinary time period. Moreover, there is nothing on record to suggest that importers had made any attempts to know the rest results before disposing off the goods, clearly importers had disposed off the goods routinely and without bothering about test-results and conditions of Letter of Guarantee submitted by them. This sort of casual attitude of importers towards their obligation under letter of Guarantee, is neither healthy nor conducive and had to be severally penalized and no leniency was called for.
Regarding second reason given by Appellate authority, it is to be noted that item used for veternery purpose is also considered as drug under the Drugs & Cosmetics Rules and sub-standard material cannot be permitted for veternery purpose also. Human beings and Animal beings both are living beings and a drug which is sub-standard for one living being cannot be standard for another living being. It was for this reason that goods were subjected to test and release was granted under letter of Guarantee with condition that the same shall not be used or disposed off without prior permission of competent authority. The offence of violating letter of Guarantee and disposing off the goods which, on test, was found to be sub-standard and not fit for living being, is not mitigated by disposing off even as feed grade material. This being the case, there was no plausible grounds to show any leniency to such offences and its perpetrators." 3. Shri J.C. Patel, learned Advocate for the respondent submits that the impugned goods were sold as poultry feed as they were found to be sub-standard and therefore the case deserves lenient consideration.
4. After hearing rival submissions and perusal of case records, I am of the opinion that the Commissioner (Appeals) has taken a very lenient view which is not justified in her order. Since the value of the goods was Rs. 1,61,672/- and the respondent disposed off the goods without waiting for the test report and in violation of the guarantee given to the customers. The goods which were liable to confiscation were not available and hence the Dy. Commissioner was justified in imposing the penalty. As such, I set aside the order in appeal. However, considering all aspects of the case, I reduce the penalty of Rs. 2 Lakhs imposed by the Dy. Commissioner to Rs. 75,000/-.