[Order per : S.S. Sekhon, Member (T)]. - Complete Excavator along with the Spare Parts vide Bill of Entry No. 2040 dated 29-12-1995 was imported. The Bill of Lading No. 555 dated 27-9-1995 for MV State of Haryana was submitted to Customs House, Calcutta for clearance of the goods for the home consumption. The items imported were initially under O.G.L. as per ITC Policy, 1992-97. They were brought under list of restrictive items, permissible for import against Special Import Licence as per Appendix XXXV, Sl. No. 63 of Export Import Policy, 1992-97 prevailing on the Bill of Lading date i.e. 27-9-1995. The item was brought under restrictive list by virtue of Public Notification 286(PN)/92-97 dated 31-3-1995. The Purchase Order No. 2/6750093/520014 dated 19-4-1995 was placed on TECHNIK GMSH, GERMANY. In fact, the Global Tender was finalised much before the item was brought under restrictive list. The Machine arrived at Calcutta Port on 5-1-1996 and a Public Notification 338(PN)/92-97 dated 2-1-1996 was issued by DGFT excluding the Sl. No. 63 which excluded Excavator from the list of restrictive items on 2-1-1996.
2. The Commissioner, vide his impugned order, came to a finding that the subject goods were included in the list of restrictive items prevailing at the time of importation of the goods and since the importer could not produce the subject Import Licence covering the goods, the goods were considered to be imported without a valid licence and were held to be liable for confiscation under Section 111(b) (sic) and he ordered for confiscation under Section 111(d) and offered a Redemption Fine of Rs. 10.00 lakh and a penalty of Rs. 1.00 lakh under Section 112(a) of the Customs Act, 1962.
3. Heard Shri K.A. Siddiqui, Deputy Chief Financial Manager of Steel Authority of India and Shri J.M. Kennedy, learned J.D.R. for the Department. Shri Siddiqui submitted that they were a public sector undertaking and were under a bona fide belief that the goods were imported freely. When they decided to float the global tenders & when they placed the Orders. In the interevening period, only when the goods were loaded as per the bill of lading, the goods were placed in the restrictive category of imports and finally, when the goods were imported at Port of Calcutta, this restriction on imports was removed by the D.G.F.T. Therefore, there was no cause for them to procure the Import Licences to cover the subject import. They relied upon Texnomac Traders case reported in (Tribunal). Shri Kennedy, learned J.D.R. stressed on the Commissioner’s finding and also submitted that the Commissioner had already taken a lenient view as on the date of bill of lading, the goods were in the restrictive list and it is only two days prior to the import in the Port of Calcutta that the restriction was removed by the Director General of Foreign Trade.
4. We have considered the matter and we find that there was no deliberate attempt by the importer to contravene the Import Trade Control Regulations. The orders were finalised when the imports were not restricted, the item being on OGL as on the date of importation at Calcutta, it was removed from the restricted list.
5. The Commissioner in the impugned Order has found as under :-
“ ……………………..I find that the subject goods i.e. complete Excavator, was included in the list of restricted items as per Appendix-XXXV of EXIM Policy, 1992-97 prevailing at the time of importation of goods and that the importer could not produce a valid special Import Licence covering the imported goods. Since the goods in question have been imported without coverage of a valid special import licence as required in terms of EXIM Policy, 1992-97, the said imported goods (i.e. complete Excavator of CIF Value Rs. 1,38,16,691.35 are liable for confiscation under Section 111(d) of the Customs Act, 1962.”
We find that the Commissioner has not given any reason as to how he considers the goods as restricted when they were in OGL initially and subsequently as per Public Notice issued by DGFT on 2-1-1996, entry in Appendix XXXV at Sl. Nos. 61, 63 and 65 stood deleted. Therefore, we find, that the confiscation of the goods, if called for, for being in restricted list only on the date of shipment as per bill of lading, requires to be redeemed only on a token fine of Re. 1.00 as it would only be a very venial and technical breach. We do not find any reason to impose a heavy penalty as arrived at by the Commissioner under Section 112(d) (sic) of the Customs Act, 1962, keeping in view that the importer is an Actual User and Public Sector Undertaking and the nature of the breach, if committed. The oft-quoted decision of the Supreme Court in Hindustan Steel Ltd. v. State of Orissa reported in AIR 1970 SC 253 is an authority for the proposition that no penalty should be imposed if there is a technical or venial breach of any statutory provision. Penalty could not ordinarily be imposed unless the party obliged was acting deliberately in defiance of law, or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. Penalty will also not be imposed merely because it is lawful to do so. We rely on Akbar Badruddin Jewani reported in at 180 (S.C.), Jain Exports (P) Ltd. reported in (S.C.), D. Navinchandra & Co. reported in 1987(29) E.L.T. 492 (S.C.) and B. Vijoylaxmi reported in AIR 1987 SC 1794. The penalty is therefore, set aside in full.
6. Appeal allowed in above terms.