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[Cites 21, Cited by 2]

Customs, Excise and Gold Tribunal - Delhi

Omex (India) vs Collector Of Customs on 17 December, 1992

Equivalent citations: 1993ECR584(TRI.-DELHI), 1993(67)ELT832(TRI-DEL)

ORDER
 

Harish Chander, President
 

1. M/s. Omex (India) have filed an appeal being aggrieved from the order passed by the Additional Collector of Customs, Calcutta. The facts of the case in brief are that the appellants had imported a consignment of 192 cases of ball bearings of Bulgarian origin valued at Rs. 1,87,634.94. The Additional Collector vide Order-in-Original No. 135/89-Addl. Collr. (A) dated 28-12-1989 had ordered the confiscation of the consignment of ball bearings. He, however, had given an option to redeem the same on payment of redemption fine of Rs. 8 lakhs and also imposed a penalty of Rs. 2 lakhs on the appellants. Being not satisfied with the order, the appellants had filed an appeal before the Tribunal. The Tribunal vide its Order No. A. 445/90-NRB had upheld the order of confiscation but set aside the penalty and remanded the case to the Additional Collector for determination of the redemption fine for the reason that the charge of the importer's complicity in obtaining the licence by misrepresentation or in fabricating letter of authority had not been proved. Regarding the quantum of fine, the Tribunal felt that the imposition was justified under Section 125 but it was on the higher side. The Tribunal also observed that the adjudicating authority had not disclosed the details of market enquiries to the appellants before determining the redemption fine. The Tribunal also vide Misc. Order No. 242/90-NRB dated 13-9-1990 had ordered the documents presented by the appellants relating to the market price of the imported goods to be taken on record as necessary for determining the redemption fine. In the re-adjudication proceedings it was contended before the Additional Collector that certain expenses were to be added to the CIF value and duty payable in respect of the imported goods and the expenditure was indicated on C.H.A. Bill, Steamer Agent's charges, Transportation charges up to Ghaziabad and various expenses totalling at Rs. 2,52,000/- and the margin of profit was of Rs. one lakh. The appellants had relied on a decision of Ashwin Vanaspati Industries Pvt. Ltd. reported in 1987 (29) E.L.T. 991 for following the working of the margin of profit. It was also contended that the appellants had incurred Rs. 5.6 lakhs as demurrage and Rs. 3.6 lakhs as interest on the value and duty of the goods. Thus, there was a total expenditure of Rs. 9 lakhs by way of interest, demurrage and other expenditure and as such the appellants' contention was that there should be no fine. They had also contended before the Additional Collector that as per 1984 (16) E.L.T. 152 and 1988 (33) E.L.T. 199 redemption fine should not exceed the margin of profit. It was argued that the market price should be on the date of import. Affidavits were also filed before the adjudicating authority through brokers. The adjudicating authority adopted the market price of Rs. 32,51,728/- and the CIF value and duty together worked out to Rs. 16,08,176/-. Taking into account all the facts, he had fixed the redemption fine of Rs. 7 lakhs. Being aggrieved from the aforesaid order the appellants have come in appeal before the Tribunal.
 

2. The matter had come up for hearing before a two-Member Bench and the Bench vide Miscellaneous Order No. 336/91-NRB dated 15-10-1991 has referred the matter to the Larger Bench. The observations of the Bench in para numbers 13 and 14 are reproduced below :-
  

"13. After considering various aspects, the Tribunal answered the question "Market price when and where" rather cryptically by saying "Obviously at the time and place of importation". Such a conclusion does not flow from the provisions of Section 125 apart from being incapable of implementation. If the option to clear the offending goods by payment of a fine in lieu of confiscation has to be real and not illusory the adjudicating authority will have to take into account, at the time of passing the order, all relevant factors which will leave enough incentive to the importer to clear the goods on payment of a fine. The very first consideration will have to be the market price for the imported goods prevailing in the market at the time when the adjudicating authority is about to pass the order, for it is not only possible, but also happens in most disputes of this type, that between the date of import and the date of passing the order, the price of the goods would have fluctuated because of numerous factors such as the import policy for the goods as a necessary consequence of which the volume of goods available in the market would have been affected one way or the other, the changes, if any in the rate of duty on the goods and numerous other factors like deterioration, if any, in the goods on account of storage etc., even availability of identical goods indigenously produced which may affect the price of the imported goods. If what the adjudicating authority has to ensure is that the option to be exercised by the importer is real and not illusory, he will have to keep in mind all the factors which affect the exercise of the option at a time when he is about to pass the order and this cannot be done with reference to market price on the date of import or even with reference to market price on the date of issue of the show cause notice because of the long time that lapses after the notice is issued but before the order is passed. Since the question of giving the option is to be decided at the time of passing the order, the fine has necessarily to be relatable to the circumstances prevailing at that time and therefore the market price has to be the market price of the goods at that time. The decisions of the courts cited before us talk of the discretion vested in the adjudicating authority in fixing the fine and also of the fact that the importer does not derive a bonanza out of such unauthorised import. If these observations of the courts have to be implemented, the market price would have to be the one prevailing when the adjudicating authority is about to pass the order and not at any other time.
 

14. Since we are of a different view from the view taken by the Tribunal in Ashwin Vanaspati's case (supra) and the point is material for determination of the appeal we would recommend to the Hon'ble President for referring the question to a larger Bench of the Tribunal to be constituted by him for the purpose. We order accordingly".
 

In view of the recommendations of the Bench, a Larger Bench has been constituted.
 

3. Shri A.K. Jain, the learned advocate, has appeared on behalf of the appellants. He reiterated the facts and pleaded that the issue to be decided by the Tribunal is as to which market price should be taken into consideration for fixing the quantum of redemption fine whether the market price at the time of the importation or at the time of the passing of the adjudication order. Shri Jain argued that the market price is never constant as it always fluctuates. He argued that the matter is fully covered by earlier decisions of the Tribunal in favour of the assessee and the market price to be adopted is the price at the time of importation. He cited the following decisions :-
  

(1) 1987 (29) E.L.T. 991, Ashwin Vanaspati Industries (P) Ltd. v. C.C. Ahmedabad - Para No. 5(f)(iv)(v) and 5(g).
 

(2) 1983 (12) E.L.T. 613, Vaghani Brothers v. C.C. Bombay
 

(3) 1993 (63) E.L.T. 337 (Tri.) - Order No. 1509 & 10/90-WRB, dated 19th September 1990, Kalpana Import & Export Agency v. C.C. Kandla.
 

(4) Order No. A 272/CAL/91, dated 12-4-1991 - Apex Overseas v. C.C. Calcutta
 

Shri Jain referred to the definition of "import" as provided under Section 2(23) of the Customs Act. He pleaded that the word "import", its grammatical variations and cognate expressions, means bringing into India from a place outside India. He argued that for the levy of Customs duty and penalty and fine the cause of action arises at the time of importation and not before or after. He referred to Section 15 of the Customs Act, which provides that the rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force in the case of goods entered for home consumption under Section 46, on the date on which a bill of entry in respect of such goods is presented under that section. He also referred to Section 14(1) of the Customs Act which relates to the valuation, wherein it is provided that the duty of Customs chargeable on any goods by reference to their value, the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where the seller and the buyer have no interest in the business of each other, and the price is the sold consideration for the sale or offer for sale. He also referred to the definition "market price" as given in the Act. In terms of provisions of Sectionsection 30 of Section 2 of the Customs Act, 1962, "market price", in relation to any goods, means the wholesale price of the goods in the ordinary course of trade in India. He also referred to Section lll(d) of the Customs Act which relates to the confiscation of improperly imported goods. The Sectionsection provides that any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force. He also referred to Section 125 of the Customs Act, 1962, which relates to the option to pay fine in lieu of confiscation. He referred to the opening words of the section "whenever". Shri Jain argued that the Bill of Entry was filed in October 1988, whereas the adjudication order was dated 28-12-1989 and after that there is an increase in the duty. He referred to page 33 which is the Additional Collector Shri J.K. Batra's order where the Additional Collector had made an observation "that the rates of duties on such bearings have been substantially enhanced after the goods had been taken clearance by the Importers". Shri Jain also referred to the proviso to Section 125 as given in the referring order to the Larger Bench by Shri N.K. Bajpai, Member (Technical). He argued that the word "chargeable" is an adjective which means it can be charged, repairs, chargeable to the occupier, sums chargeable to the reserve. Shri Jain also referred to the second adjudication order and the calculation of market price, and stated that the release of the goods rendered at the time of clearance has not taken place. He argued that there must be some static market price. He referred to the definition of "imported goods" in terms of Section 2(25) of the Customs Act. "Imported goods" means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption. Shri Jain also referred another decision of the Tribunal in the case of S. Rajendran v. CCE, Cochin reported in 1988 (33) E.L.T. 371 which he stated was in favour of the appellants. Shri Jain pleaded for acceptance of the appeal and argued that the redemption fine is to be fixed on value on the date of importation of the goods and not on the date of passing of the adjudication order.
 

4. Shri G. Bhushan, the learned SDR, who has appeared on behalf of the respondent, pleaded that the redemption fine has been imposed to cover up the margin of profit. He referred to the order passed by the adjudicating authority. He also referred to a decision of the Delhi High Court in the case of Jain Exports Pvt. Ltd. v. Union of India reported in 1987 (29) E.L.T. 753 (Del.). The High Court has held that "Various allegedly extenuating features, urged by the petitioners, such as absence of mens rea, bonafide belief, genuine undertaking of the import policy can be put forth before the authorities concerned and taken into account by them for seeing that a bonafide mistake may not unduly harshly penalise or cause irreparable injury to the importer. But it seems equally plain that the resort to Section 125 to impose fine in lieu of confiscation cannot be so exercised as to give a bonanza or profit for an illegal transaction of import. Otherwise, there may be serious danger and risk to the success of the whole import and export policy with inevitable adverse economic consequences for the nation. The amount of redemption fine would and must necessarily be determined by these considerations". Shri Bhushan also relied on the referring order to the Larger Bench and argued that the observations are correct. He argued that the market value at the time of adjudication has to be adopted. He also argued that there is no infirmity in the order passed by the Additional Collector. In reply, Shri Jain referred to the Supreme Court decision in the case of Jain Exports Pvt. Ltd. v. Union of India reported in 1990 (47) E.L.T. 213 (SC), wherein the Hon'ble Supreme Court has held that "While determining the question of quantum of redemption fine it is essential to consider the facts and circumstances relevant to the bona fide conduct of the importer in importing the goods, therefore the refusal of the Tribunal to take into account the extenuating circumstances leading to the import of the disputed goods for purposes of determining the quantum of redemption fine is incorrect."
 

5. We have heard both the sides and have gone through the facts and circumstances of the case. The issue to be decided by us is what market price should be adopted at the time of importation of goods for the purpose of imposing redemption fine. For the proper appreciation of the legal position we should first look at the relevant provisions giving option for redemption fine in lieu of confiscation under Section 125 of the Customs Act, Section 2(23) Import, Section 22(5) Imported Goods, Section 22(6) Importer and Section 2(30) Market Price. A simple perusal of Section 125 shows that in the case of importation and exportation of prohibited goods, giving option is mandatory and the term "option" in its widest interpretation means simple freedom of choice. Hon'ble Calcutta High Court in the case of S.S. Kothari reported in 1987 (30) E.L.T. 156 (Cal.) had held that in giving option to redeem the goods on payment of redemption fine with the option to pay redemption fine in lieu of confiscation is the discretionary power for the adjudicating authority and the exercise of discretion is a judicial function not concludible by the dictates by C.B.E.C. or any authority. The discretion has to be exercised fairly and not arbitrarily or capriciously. Relevant extract from Para 11 of the said judgment is reproduced below :-
 "I have considered the rival contentions. The car has been imported as a gift from father to son. Section 125 of the Customs Act, 1962 provides that whenever confiscation of any goods is authorised under the said Act, the officer adjudicating it may, in the case of any goods the importation or exportation whereof is prohibited under the said Act or under the law for the time being in force, give to the owner of the goods an option to pay in lieu of confiscation such fine as the officer thinks fit. Even if the importation of the goods is prohibited under the Act, the adjudicating officer has the discretion to give an option to the importer to pay in lieu of confiscation such fine as the officer thinks fit. The Act has not provided the circumstances under which the prohibited goods should be released upon payment of fine in lieu of confiscation. The Adjudicating Officer may, in his discretion, give the importer an option to pay in lieu of confiscation a fine. The exercise of this discretion by the adjudicating officer is a quasi-judicial function and cannot be controlled by the dictates of the Central Board of Excise and Customs or any other authority. The power to give option to the importer to release the prohibited goods upon payment of fine is a power coupled with the duty and in any event it should be exercised fairly and reasonably and not arbitrarily and capriciously."
 

6. Shri Jain, the learned advocate, has contended before us that while fixing the quantum of fine the margin of profit has to be calculated, and it has to be on the price on the date of importation. The Tribunal had occasion to deal and decide the following matters on the issue :-
 (1) Ashwin Vanaspati Industries (P) Ltd. v. Collector of Customs, Ahmedabad reported in 1987 (29) E.L.T. 991 (Tribunal).
 

Para 5 of the judgment is reproduced below :-
 

"On a perusal of the records and on the submissions made, it would appear to us that -
  

(a) It is not as if the appeal merely calls in question the determination of the assessable value only, so that, if it is not agitated and given up during the course of the hearing, nothing else in the appeal survives for decision. The Appellant had definitely impugned the imposition of a fine in lieu of confiscation in a sum of Rs. 85,00,000/- in the adjudication order. Ground (b) and the prayer in para 8 of the Memorandum of Grounds of Appeal are quite clear. It is implicit in the prayer on behalf of the Appellant for a judgment on the lines of the previous decisions of the Tribunal in M/s. Jayant and Allena cases aforesaid, that the question of quantification of the fine in lieu of confiscation be also decided in the manner it was in those cases. It is not, therefore, correct to say that the said question was a non-issue or ceased to be an issue at any time;
 

(b) Section 125 of the Customs Act, in so far material, lays it down that whenever confiscation is authorised, the Officer adjudging such confiscation "may", in the case of an import of prohibited goods, and "shall" in the case of other goods, give the owner of the goods an option to pay in lieu of confiscation such fine as the officer thinks fit, provided that such fine "shall not exceed the market price of the goods confiscated less, in the case of imported goods, the duty chargeable thereon";
 

(c) It would thus appear that it is in according the option of release from confiscation [the contra distinction in the use of the words "may" and "shall" in the two specified cases of prohibited goods and other goods is significant] as well as the quantification of the amount of fine ["as the officer thinks fit"] that is to be paid for such release that the adjudicating officer is vested with a discretion, subject to a fetter or ceiling, namely the market price of the "goods confiscated" themselves and not curiously enough "such or like goods as those confiscated";
 

(d)(i) In a consideration of the various questions that arise in the construction and application of the aforesaid provision, it would be material to remember all the time that while a proceeding for confiscation is, undoubtedly, one in rem rather than in personam like, e.g. penalty under S. 112 of the Customs Act, 1962, - one in relation to the offending goods rather than in relation to the person in any way concerned with them -nevertheless, it is no less penal in nature or quasi-criminal in character, even though such proceedings are under a fiscal enactment [AIR 1974 SC 859 - Collector of Customs v. Boormal - Para 22 of the report where confiscation is referred to as a penalty]. The test to adjudge if an action is penal or quasi-criminal is not in the metis rea prescribed. If that were the true test, a proceeding for the levy of penalty is also not penal or quasi-criminal, seeing that no mens rea is prescribed at all in S. 112(a) although penalty is, indisputably, penal. On the contrary, confiscation as an act of appropriating private property for State or Sovereign use was known since the Roman Empire and "usually been the result of the doing by the owner of some prohibited act ... It is also the penalty for trying to carry contraband...In criminal law, confiscation of smuggled property ... is part of the penalty for certain offences [P. 270 of David M. Walker's "The Oxford Companion"]. The seizure and appropriation of property as a punishment for breach of the law whether municipal or international was held to be confiscation in (1947) Ch. 629 - [Frankfurther v. W.L. Exner - cited in Osborn's Concise Law Dictionary construed to mean in its ordinary sense, property taken by the crown by way of penalty in Re Burnett [(1902) 1 Ch. 858 cited in Stroud's Judicial Dictionary, Fourth Edition, P. 549],
 

(ii) Once this is so, two consequences follow. First, the provision has strictly to be construed and second, any proceeding in which either the confiscation or the fine in lieu thereof are to be adjudged are judicial or quasi-judicial, as the case may be, such a proceeding or the determination of any question therein including the quantification of the fine can hardly be arbitrary. It has to conform to some well-settled rationale or principles including the principles of natural justice. The exercise of the discretion in the fixation of the fine in lieu of confiscation has, necessarily therefore, to be interfered with if it did not so conform or was otherwise arbitrary;
 

(iii) In A.I.R. 1966 Cal. 237, it was a case of confiscation of a mare imported as baggage. The Collector in adjudication did not, in his discretion, order redemption of the confiscated animal on payment of a fine. He ordered an absolute confiscation. The order was assailed in the Hon'ble High Court of Calcutta on the ground that no reason was given as to why the assessee was not given an option to redeem on payment of a fine in lieu of confiscation. It was in this context that it was observed that -
 "(28) It is now beyond doubt that imposition of a fine in lieu of confiscation is discretionary with the authorities. But must there, be given specific reason in every case as to why a particular penalty, may be the more onerous of the two, was imposed? In my opinion, there is no authority for such a proposition. If there be indications that an inferior tribunal felt that its discretion was fettered, although there was by law no limitation imposed, or that it had none, and in that view chose the more onerous of the two penalties provided, then only a superior court may remit the case and ask the inferior tribunal to exercise this discretion according to law. In the absence of such indications, the discretion exercised by an inferior tribunal should not be interfered with. Here, there is no such indication. I, therefore, do not propose to interfere."
 

(iv) The aforesaid issue was neither raised nor considered in appeal to the Supreme Court in AIR 1971 SC 293. It cannot be, therefore, said that the aforesaid observation was affirmed by the Hon'ble Supreme Court;
 

(v) Even so, the aforesaid observation is inapplicable in the facts and circumstances of this case. This is not a case where the inferior tribunal imposed one type of penalty rather than another which is less onerous. The learned adjudicating officer did indeed afford an option for redemption. The question is, if the fixation of the fine in lieu of confiscation could be in his absolute discretion unfettered by any principles or "well established lines" - "according to the rules of reason and justice and not according to private opinion : Rookes case (5 Rep 100a); according to law and not humour. It is to be not arbitrary, vague, fanciful but legal and regular" [passage extracted in Para 26 of the report in AIR 1966 Cal. 237 from the judgment of Lord Halsbury in Sharp v. Wakefield (1891 AC 173)];
 

(vi) To expatiate a little - duty to act and the discretion as to the manner of performance of that act e.g. "as he thinks fit" - are distinguishable in law. In writ proceedings, performance of a duty can be compelled. [AIR 1968 SC 1113 - State of Mysore v. Syed Mohd.]. But not the exercise of discretion in a particular way [1954 SCR 883 - Vice Chancellor Utkal University v. S.K. Ghosh]. Nevertheless, a court in exercise of its jurisdiction under Article 226 of the Constitution of India, will interfere with the manner of exercise of discretion where it is exercised to do an act which is ultra vires the statute that conferred the discretion or it was a mala fide exercise or in contravention of the principles of natural justice or where a condition precedent for such exercise was not fulfilled. A mala fide exercise of discretion is where the authority is influenced by extraneous or irrelevant considerations or does not apply its mind to the relevant considerations. Also if both relevant and irrelevant considerations are inextricably mixed up, the exercise of the discretion is interfered with. [AIR 1969 SC 707 - Rohtas Industries Ltd. v. S.D. Agarwal - approving the views of Hidayatullah and Shelat JJ. in AIR 1967 SC 295 - Barium Chemicals Ltd. v. Company Law Board - See in this context the observations of Lord Denning citing Lord Greene MR. in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation - 1947 - 2 All. ER 680 at 682 - "a person entrusted with discretion must direct himself properly in law. He must call attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to the matter he has to consider"];
 

(vii) Section 125 of the Customs Act, 1962 was enacted in substitution of Section 183 of the Sea Customs Act, 1878 - which merely provided that, "whenever confiscation is authorised by this Act, the officer adjudging it shall give the owner of the goods an option to pay in lieu of confiscation such fine as the officer thinks fit". In construing the said provision the Hon'ble Supreme Court in AIR 1964 SC 1140 (Indo-China Steam Navigation Co. v. Jasjit Singh) had categorically held that "S. 183 confers discretion on the officer to determine what fine should be imposed in lieu of confiscation and in doing so, he will undoubtedly take into account all relevant and material circumstances, including the extenuating factors on which the owners may reply". In view of this decision, no contention of an absolute unfettered discretion - not to be interfered with in appeal by a superior forum and not merely by way of a writ - can be advanced. We, however, observe that in the instant case no extenuating circumstances exist as has been held in Tribunal's decision in jayant Oil Mills case and about which there is no dispute. Illegal importation with a view to making profit has been found in a similar case of M/s Jain Exports by Delhi High Court (C.W. 4037 and 4038/82 - copy of the judgment made available).
 

(e) In fact, in enacting Section 125 of the Customs Act, 1962, in the place of Section 183 of the Sea Customs Act, 1878, the legislative intent is explicitly expressed, to
  

(i) Categorise the classes of cases into those where an option for redemption is discretionary and where it is mandatory, and
 

(ii) Provide a ceiling for the fine in lieu of confiscation that may be imposed, so that while the fine should be deterrent, the option should not be illusory.
 

The new section, thus clarifies the considerations relevant in a computation of the fine in lieu of confiscation;
 

(f) (i) This being so, the first step in fixing the quantum of fine in a case where the option to redeem is once decided upon is, necessarily, the determination of the ceiling, since it cannot, in any view, exceed it. It is totally irrational to decide upon the quantum without, in the first instance, a determination of the monetary limit thereof.
 

(ii) In the determination of the ceiling for the fine, "the market price of the goods confiscated" has to be ascertained in accord with the legislative mandate.
 

(iii) One might wonder if the goods confiscated themselves have a market price till they are released from confiscation, cleared on payment of the duty, penalty and fine for redemption and brought to the market for sale. The expression is not "market price for such or like goods" or "market price for which goods of the like kind or quality are sold or are capable of being sold" [cf. Section 30 of the Sea Customs Act, 1878 and old Section 4 of the Central Excises and Salt Act, 1944 - and the decisions of the Privy Council on the interpretation and application of the aforesaid Section 30 in Vacuum Oil Company v. Secretary State (AIR 1932 P.C. 168 = 59 IA 258) and Ford Motor Company v. Secretary of State (ECRC 8) and the decisions of the Supreme Court on the old Section 4 of the Central Excises and Salt Act in AIR 1973 SC 225 - A.K. Roy v. Voltas and AIR 1975 SC 225 - Atic Industries v. Assistant Collector of Central Excise. Does it make for any difference [if instead of the aforesaid expressions, the expression "market price" is made use of?] but the market price for the self same confiscated goods themselves. How, then, is their market price to be ascertained unless the fine for their redemption is determined and how is the fine determined unless their market price had been ascertained? Again market price, on what day and at what place? [Is it the date of their import? Or the date when the matter is ultimately adjudicated, may be after an inordinate delay, or the date of actual clearance after adjudication? Or at the place other than the place of importation];
 

(iv) When one speaks of a market price of goods, it is not the actual price that the goods may ultimately fetch on sale. Indeed, they may not actually be sold at all. "Market Price" on any particular day in a particular place is a notional concept, a hypothesis, implying merely the price a willing purchaser would pay a willing seller for the property in the goods and is evidenced by the price paid in a plurality of transactions of sales and purchaser occurring on that day or nearest to it and in that place in identical goods or goods of like kind or quality, or failing that similar goods at that place or at a time and place nearest to it. In the words of Lord Blanesburgh in Vacuum Oil case the wholesale cash price for which goods of a like kind or quality are sold or capable of being sold is "that price current for staple articles the amount of which, if not a subject of daily publication in the press, is easily ascer-tainable in appropriate trade circles". This is nothing but "market price". The "market price" of the goods confiscated is, in the circumstances, no more and no less than the market price for goods of the like kind or quality or similar goods ascertained on the basis of the prices paid in the course of multiple transactions of sale and purchase;
 

(v) Market price when and where? Obviously at the time and place of importation. The offending act which rendered the goods liable to confiscation was the import at a particular time and place. It is, therefore, the market price on the date of import and at the place of import that has, in the first instance, to be ascertained;
 

(vi) Goods of like kind and quality would imply necessarily goods of the same brand or of the same supplier. It has, necessarily, to be for imported rather than indigenous goods. If, however, the market price for goods of like kind and quality is not ascertainable, the price of comparable goods of foreign origin or Indian origin in that order is to be ascertained;
 

(vii) Ascertainment of market rate of goods of like kind and quality or similar goods on any particular day or place is, doubtless, difficult but cannot, on that account, be shirked. It is a question requiring evidence to be adduced by either party and appreciation thereof;
 

(g) (i) After ascertaining such market price, deduction therefrom should be made of the duty payable on goods under confiscation. Quantity (Quantum) obtained thereafter would form the ceiling for levy of fine in lieu of confiscation. Instant case is clearly one of imported goods. Therefore the ceiling for levying fine in lieu of confiscation should be arrived at in the instant case as outlined above;
 

(ii) Imposition of redemption fine equivalent to the ceiling may at times prove illusory. What is necessary, however, is that the profit that an importer is likely to make on the date of import by sale of such illegally imported goods is mopped up so that premium on or incentive to dishonest activities is curbed;
 

(iii) In the case of M/s. Jain Exports mentioned supra, the Hon'ble High Court was pleased to direct an enquiry into the ultimate profit actually made by the importer on the sale of the imported goods. The sale, however, had obviously taken place long after the date of import and the price realised on such sale may have nexus with the market price ruling on the date of sale rather than on the date of import. The profit or loss realised may be the result of fluctuations in the market as well as the speculation of the importer as to the way the market may act. If he had incurred less it is not as if nothing is to be recovered by way of fine in lieu of confiscation, notwithstanding that on the date of the import he could have made a profit. We may draw an analogy from the principles relating to the computation of damages on breach of contract as laid down in AIR 1915 P.C. 48 [A.K.A.S. Jamal v. Moola Dawood Sons & Company]. In that case, on a breach by the buyer in a contract of sale of certain shares in consequence of a fall in the market, the seller demanded payment of damages on the basis of the difference between the contract rate and the market rate ruling on the date of breach. Subsequently, however, the seller happened to sell them in a rising market at some profit. This resulted in mitigation of his loss to a certain extent. The question that was considered was whether the measure of damages for breach of contract was the difference between the contract price and the market price at the date of breach or the measure of actual loss sustained after re-sale in a rising market. If the seller was bound to reduce the damages by subsequent sale at better prices and if the purchaser is entitled to the benefit of such sale, it must be that he must bear the loss also, if any, in consequence of such sale. Their Lordships categorically held that the latter is impossible and the former proposition is equally unsound. If the seller holds on to the shares after the breach, the speculation as to the way the market will subsequently act, is the speculation of the seller and not of the buyer. The seller cannot, therefore, recover from the buyer the loss below the market price at the date of the breach if the market falls. Nor is he liable to the purchaser for the profit if the market rises. While it is true that the seller owed a duty to mitigate the loss consequent upon breach, the loss to be ascertained however, is the loss at the date of breach. The mere fact that the seller reduces his loss by selling the shares at a higher price than obtained at the date of breach is of no relevance seeing that the seller's loss at the date of breach was and remained the difference between the contract price and market price at that date. When the buyer committed breach, the seller remained entitled to the shares and became entitled to damages as well for the breach. In consequence of resale, his pocket received the benefit but his loss at the date of breach remained unaffected. On the same analogy it may be observed, with respect, that the profit earned or loss incurred in an actual sale long after the date of import is not of such relevance as the profit the importer could have made on the date of the import itself;
 

(h) The question before us is whether the fine imposed in the instant case is according to the above guidelines. We observe that in the impugned order, there is no determination of market price of the confiscated goods at the time and place of importation. Determination of fine by the learned Collector appears to be ill-in formed. It is based on no evidence whatsoever. It was a mere ipse dixit. No opportunity would appear to have been afforded to the assessees to adduce evidence against that quantification. It is almost as if it were "plucked out of air". We have no hesitation therefore, in the light of the aforesaid guidelines.
 

(2) Vaghani Brothers, Bombay v. Collector of Customs, Bombay reported in 1983 (12) E.L.T. 613 (CEGAT)
 

Para 2 of the judgment is reproduced below :-
 "We have examined the submissions of the appellants, and the department's contentions. The import policy book does not make any distinction between staple pins for stationery and staple pins for industrial purpose. Under Appendix 3 Sr. No. 622, the import of staple is banned without any distinction of type or category. This ban is further repeated under Sr. No. 62 under Appendix 4 of the relevant policy book. Under para 5 of Appendix 17 of the policy book, it has been absolutely clear that import of an item appearing in Appendix 4 (absolute banned list) will not be permitted against R.E.P. licences entitled to import 'banned items' except under certain conditions mentioned in the table appearing in Chapter 17. The staples are not mentioned in this table. It therefore implies that the import of staple pins is absolutely banned and is not permitted. This position is not affected by the entries at G. 2 in Appendix 17 which inter alia permits import of packing material. In view of the aforesaid legal position there is no justification in the distinction sought to be drawn between staple pins for stationery and staple pins for industrial purposes. The catalogue produced by the appellants shows that the staple pins are for use with a simple carton stitcher which can be screwed on to work bench. The catalogue therefore, does imply that the goods are meant for stapling cardboard sheets for converting them into cartons. But this position is not altered under the relevant policy book. Besides, the staples can be used for other purposes like stapling wads of currency notes, joining plastic of metal sheets etc. However, in view of the policy in question it is not necessary for us to go into the aspect of different categories of staple pins. The appellants' reliance on Circular No. 49/6/80-81/IPC/14264 dated 9-12-1980 does not also help their case. This circular only clarifies that the import of staples for stationery was covered by entry No. 622 of Appendix 3 of the Policy Book 1980-81. The clarification is specific to the query made. It cannot be interpreted to imply that the import of other types of staples is permitted. Had it been so, the other category of staples would have been covered by different entries and the appellants have failed to point out such an entry. Similarly, the importer's claim for an established practice of permitting import of heavy duty staples pins by the Customs House is confined to pointing out only a single case of importation of staple pins by M/s. B.J. International, Bombay under bill of entry cash No. 1031 dated 3-1-1981. The department has contended that one clearance might have been error of judgment on the part of the Customs House and that it cannot serve as a precedent to the appellants. On the other hand, the department has submitted a copy of the order No. 4/10-34/817 dated 4-5-1981 of the Collector of Customs under which penal action has been taken in the case of import of staple pins by M/s Jalaram Trading Co. Bombay. The appellants have argued that the analogy of the Collector's order dated 4-5-1981 is not applicable to the present instance as it covers staple pins MAX No. 10 which are admittedly for stationery use. Even if we were to ignore the Collector's order dated 4-5-1981, we find that except for a single instance cited by the appellants, no established practice appears noticeable in the matter. In this view it would not be justifiable in this to accord the benefit of the single instance to the goods under question when the import policy is very clear. As regards the appellants' argument that the fine imposed by the Deputy Collector of Customs is beyond the legal limit under Section 125(1) of the Customs Act, it is seen that the interpretation sought to be put on the proviso of Section 125(1) C.A. is not correct. The fine has to be adjudged at the time of importation of the goods and before the clearance of the goods for home consumption and their entry in the market. Therefore, the market price mentioned in the proviso cannot refer to the market price of the goods under import but market price of the goods of like kind and quality. The appellants have not stated as to what the market price of goods of like kind and quality was at the time import, and in absence of such an argument their plea that the redemption fine is ultra vires Section 125(1) C.A. is not valid and has to be rejected. In the above light, the fact that the goods under import were sold at a loss is of no consequence. Finally, the appellants' request for acceptance of the Licence No. P/L 0375251/C/XX/76/B/79 dt. 21-7-1980 to cover the goods under import is found to be invalid. The list attached to this licence includes Pearl headed pins and pins of all types. But this description falls under the Head 'A' for 'Trimming and embellishments, the following': Therefore, what are permitted for import under the list attached with the licence are pins in the nature of trimmings and embellishments and not staple pins which are banned. Since staple pins are absolutely banned under Appendix 4, there is no question of the description of staple pins being included in the list attached to the licence. It is also significant to note that the appellants have claimed the import of staple pins for the purpose of packing. Had their interpretation been correct, the description of 'Pearl headed pins and pins of all types' would have figured under heading 'C for 'packing materials' which is included in the licence. Ae we have observed earlier, the import of staple pins is absolutely banned and therefore there is no question of the same being included in the list annexed to the Licence No. P/L 0375251/C/XX/76/B/79 dt. 21-7-1980. We find that the appellants' request for acceptance of this licence is also not tenable, in view of the foregoing findings, we hold that the order of the Deputy Collector of Customs as confirmed by the order of the Appellate Collector of Customs, is correct. The appeal is accordingly rejected".
 

(3) Krishanlal Balaram v. Collector of Central Excise reported in 1988 (37) E.L.T. 309 (Tribunal)
 

Para numbers 7 and 8 are reproduced below :-
  

"7. The next question that arises for my consideration is with reference to the quantum of fine. Imposition of fine is purely in exercise of discretion by a quasi-judicial authority like the Tribunal and such discretion should be exercised judiciously keeping in mind the profit margin of the goods. In the order of the Collector of Customs, Madras, dated 19-12-1986 in respect import of Cloves valued at Rs. 1,50,960 a fine of Rs. 15,000 has been levied working out to 10%. In the order of the Collector of Customs (Appeals), Madras, dated 6-5-1987 referred to above, in respect of the import of Cloves valued at Rs. 31,199 a fine of Rs. 2,250 has been levied, which would work out to 7.22%. The Bench of the Tribunal in the said ruling referred to above has imposed a fine which would work out to about 15%. Be that as it may, I should like to observe that in the matter of levy of fine relevant considerations such as profit margin etc. referred to in the Full Bench ruling on the Delhi High Court will have to be borne in mind and either side cannot contend that the quantum of fine will have to conform to a rigid mathematical formula. Depending upon the facts and circumstances of the case there may be a nominal variation in the percentage of fine in each case and such nominal or marginal variations are inevitable particularly when a quasi-judicial authority is called upon to exercise a discretion.
 

8. In the present case I should like to note that the same adjudicating authority has imposed a fine of about 10% of the value of the goods on appellant Krishanlal Balram (in Appeal no. C. 449/87) and on appellant Ananda Trading Company (in Appeal No. C. 493/87) whereas in all other orders passed on the same date, except one order which was passed on 16-4-1987, a quantum of fine of 15% has been imposed. While I find some force in the submission of the learned counsel for the appellants that reduction in the quantum of the fine should be given in all these cases where 15% of the fine has been imposed conforming to the quantum of 10% adopted by the very same adjudicating authority in two cases referred to above, I am not inclined to modify the order and reduce the quantum of fine, because the exercise of the discretion though marginally varies from one case to other cases cannot be said to be either arbitrary or perverse. A small variation by itself cannot be a circumstance warranting modification of the same conforming to a rigid formula".
 

(4) Shah Trading Company v. Collector of Customs, Bombay, Reported in 1988 (33) E.L.T. 165 (Tribunal)
 

Para 5 of the judgment is reproduced below :-
 "Considered the submissions made on both the sides. As has been rightly contended by Shri Krishnamurthy in respect of the imported goods the fine cannot exceed the market price less duty. Thus, if once the Deputy Collector had allowed redemption he was duty-bound under law to determine the market price of the imported goods. The order of the Deputy Collector nowhere indicates as to the market price of the imported goods at the relevant time. Even though a contention had been taken before the Appellate Collector he did not consider that aspect of the case. Thus, there is hardly any evidence as to the market price of the imported goods at the relevant time. In the circumstances, I allow this appeal, set aside the impugned orders. The matter is remanded to Deputy Collector for fresh determination of the quantum of fine in the light of the observations contained in this order".
 

(5) S. Rajendran v. Collector of Customs and Central Excise, Cochin. Reported in 1988 (33) E.L.T. 371 (Tribunal).
 

Para numbers 2 and 4 of the judgment are reproduced below :-
  

"2. The learned counsel for the petitioner submits that in the said order, the petitioner was permitted to redeem 307.750 gm of primary gold under confiscation on payment of fine of Rs. 12,000/- (Rupees Twelve Thousand). It is further submitted that the petitioner paid the fine on 19-1-1984, but unfortunately the gold was not available with the authorities as the same had been sent to the Mint of Government of India. The learned counsel relying upon the judgment of the Calcutta High Court reported in 1986 (26) E.L.T. (Cal). in the case of Union of India and Others v. Shambunath Karmakar and Others, prays that a direction may be given to the Department to pay the petitioner the market value of the gold in question on the date of the order of the Tribunal referred to supra.
 

4. We have considered the submissions made by both the sides before us. Admittedly in the present case, there was an order of absolute confiscation of the gold in question passed by the Addl. Collector which was affirmed by the Collector of Customs (Appeals), Madras by his order dated 1-5-1982. Once when the gold is confiscated in adjudication the property in it gets vested with the Govt. absolutely and in such a situation it- is open to the Govt. to dispose of the property. No doubt, propriety demands that the Department should keep the property intact if it is brought to its notice that an appeal is pending. In the present case, the petitioner also did not take out any application seeking suspension of the operation of the impugned order appealed against, nor is there any evidence on record to show that the department was aware of the pendency of an appeal before the Tribunal. In such a situation, we find no warrant for giving a direction that the petitioner is entitled to the prices on the date of the order of the Tribunal. Further, the case relied upon by the learned counsel for the appellant is not applicable to the facts of this case because in that case the very order of the confiscation was set aside in appeal and apart from the finding was that there was no evidence to show as to when the gold was sent to the Mint. We, therefore, record the undertaking of the learned D.R. that the Department would pay the petitioner the value of the gold on the date of its seizure. Ordered accordingly".
 

(6) Jain Exports Pvt. Ltd v. Union of India reported in 1990 (47) E.L.T. 213 (SC)
 

Para numbers 5 and 6 of the judgment is reproduced below :-
  

"5. Before the Appellate Tribunal the petitioners pointed out that they had bona fide imported the goods on the belief that 'industrial coconut oil' was not a canalised item and their belief was founded on a number of facts and circumstances including the letter of State Trading Corporation, order of Central Government under Section 131(3) of the Customs Act and the clearance of petitioners' own goods by the Collector (Bombay). The petitioners further pointed out that along with the petitioner's disputed goods two other importers had also imported 'industrial coconut oil' and in those cases the Tribunal had reduced the quantum of redemption fine viz. in the case of Jayant Oil Mills Pvt. Ltd., Bombay and M/s. Allana Impex (P) Ltd., Bombay. The petitioners submitted that their case was similar to those cases, therefore, the Tribunal should interfere with the Collector's order. The Tribunal refused to consider these extenuating facts and circumstances on the assumption that the High Court and the Supreme Court had already taken those factors in holding that the import was illegal. The Appellate Tribunal further held in para 20 of its judgment that though the court had left the question of bonafide belief and other circumstances for the determination of the Tribunal the observations of the court had to be given due weight. The Tribunal concluded as under :-
 "The circumstances of clearance of similar imports by the Customs authorities at various ports, the orders of the Board and the Central Government setting aside the orders of confiscation and fines, all these had been considered by the High Court and rejected in coming to the conclusion that the import was illegal. These, therefore, could not again be urged now before the Tribunal as extenuating circumstances. Only fresh factual material such as sale income, expenses etc. if submitted by the importers before the Tribunal, could be taken into account now."
 

The above observation of the Tribunal makes it amply clear that it failed to consider the question of bonafide in proper perspective. The High Court and this Court had requested the extenuating circumstances in determining the legality of the import, but nonetheless those factors and circumstances are relevant in determining the quantum of redemption fine. The Appellate Tribunal was bound to consider those facts and circumstances in determining the quantum of redemption fine. Moreso, because the Tribunal had itself observed that the Collector's order imposing redemption fine of Rupees five crores was not based on any material, but it refused to consider the reduction of redemption fine merely on the ground that the importers had failed to place additional material other than those which had already been considered by the High Court and the Supreme Court while determining the legality of the import. In our opinion the Tribunal committed apparent error in refusing to take into account the extenuating circumstances leading to the import of the disputed goods for purposes of determining the quantum of redemption fine.
 

6. While determining the question of quantum of redemption fine it is essential to consider the facts and circumstances relevant to the bonafide conduct of the importer in importing the goods. The question of bonafide import is relevant for determining the quantum of redemption fine as held by this Court in D. Navinchandra & Co., Bombay & Ors v. Union f India and Ors. - 1987 (29) E.L.T. 492 (SC) -1987 (3) SCC 66 ; and B. Vijaya Kumar v. Union of India AIR - 1987 SC 1794. In these two decisions, this Court held that while imposing fine or penalty for the import of goods in contravention of the Import Policy, the authorities should consider the plea of bona fides in the background of the facts attending to the import of the relevant goods."
 

(7) Vacuum Oil Company v. Secretary of State reported in 1932 Privy Council 168.
 

The Privy Council has observed -
 "The wholesale cash price primarily in view is, they cannot doubt, that price current for staple articles, the amount of which, if not a subject of daily publication in the press, is easily ascertainable in appropriate trade circles. Their Lordships do not find in the section any sufficient indication that the alternative basis of assessment indicated in Section 30(b) is only to be a "dernier resort". For the great bulk of dutiable goods in their infinite variety it must, they feel satisfied, be the only available basis. And in their Lordships' judgment it is the basis on which these oils of the appellants must be charged to duty."
 

(8) The West Regional Bench in the case of Collector of Customs, Kandla v. Kalpana Import & Export Agency vide order No. 1509-10/90-WRB, dated 19-9-1990 in para numbers 18 and 19 has observed as follows :-
  

"18. The main ground urged by the Department is that because of subsequent increases in the rates of duty on ball bearings, margin of profit has gone up. This contention is not acceptable because comparison is required to be done between two contemporaneous factors viz. cum duty price and market price both prevalent at the time of import and not between cum duty price prevalent at the time of import and market price prevalent as of now.
 

19. The Department have not produced any evidence to show that the market price during the period of import was substantially high and fine imposed is too meagre as compared to that. No data is furnished with regard to market price prevalent at the time of import enabling us to take a view on the adequacy or otherwise of the fine imposed. In the circumstances, we have no other option but to reject the appeal from the revenue."
 

(9) Hon'ble Supreme Court in the case of Arvind Mohan Sinha v. Amulya Kumar Biswas - AIR 1974 Supreme Court 1818 had held that while fixing the quantum of fine or penalty the gravity of the offence has to be looked into. The relevant extract from the said judgment is reproduced below :-
 "The broad principle that punishment must be proportioned to the offence is or ought to be of universal application save where the statute bars the exercise of judicial discretion either in awarding punishment or in releasing an offender on probation in lieu of sentencing him forthwith. The words of Section 4(1) of the Probation of Offenders Act are wide and would evidently include offences under the Customs Act and the Gold Control Rules."
 

7. The learned SDR has laid heavy reliance in the case of Jain Exports Pvt. Ltd., New Delhi and Another v. Union of India and Others reported in 1987 (29) E.L.T. 753 (Del.) Para 71 which is relevant to the issue is reproduced below :-
 "It should also be noted that once it is found as I have that the goods were illegally imported, the same became liable to confiscation. Of course the Collector has given option to pay fine in lieu of confiscation. In that context it seems to me that the authorities have to examine various circumstances, details of facts, which cannot obviously be examined herein these proceedings. The redemption fine is in the discretion of the Collector. That is why various allegedly extenuating features which Mr. Sen urges can be put before the authorities concerned. No doubt the various features can be taken into account for seeing that a bonafide mistake may not unduly harshly penalise or cause irreparable injury to the importer. But it seems to me equally plain that the resort to Section 125 of the Act to impose fine in lieu of confiscation cannot be so exercised as to give a bonanza or profits for an illegal transaction of import. Some justification offered by importer may be taken into account for not proceeding for personal penalty under Section 112 of the Act or for not proceeding under Section 135 of the Act against the importer. But there would appear to be hardly any justification for letting an importer make monetary gain from any illegal transaction of imports and/or exports. Because if apparent justification pleaded for import, which ultimately is found to be prohibited it can still result in monetary gain to the importer, there may be serious danger and risk to the success of the whole import and export policy with inevitable adverse economic consequences for the nation. The Import and Export Policy can work in the public interest if it was made known clearly that whatsoever justification are pleaded may be sometime reasonable or even well intentioned, it will be no avail, and will not result in any monetary gain to the importer, once the goods are found to have been imported against a prohibition under the Statute. The label of bonafide belief for importation may only be relevant for not personally penalising him, but he cannot be permitting to make any profits out of illegal deal. The amount of redemption fine would and must necessarily be determined by these considerations. I do not however wish to pursue it any further because all these details of actual income, sale price and other expenses can only be shown by the petitioner to the authorities concerned, who has to pass the final order."
 

8. An appreciation of the decisions discussed in Para 6 above, and Section 125 of the Customs Act, 1962, it clearly shows that while determining the quantum of redemption fine, the margin of profit is to be calculated on the date when the importation was made. In the matter before us, the appellant had imported ball bearings and the Bill of Entry was filed after the importation of the goods. The appellant was aware of the margin of profit at the time of importation and was also aware of the gravity of offence. The judgment of the Hon'ble Supreme Court in the case of Arvind Mohan Sinha v. Amulya Kumar Biswas fortifies our views that the redemption fine should be calculated on the basis of the gravity of the offence. We are of the view that redemption fine quantum should be fixed on the basis of the value of the similar or like goods on the date of importation, and as such the redemption fine has to be calculated on that basis. In view of the above discussion, we are of the view that Additional Collector was not justified in imposing the redemption fine at Rs. 7 lakhs. We direct the adjudicating authority to recalculate the redemption fine on the basis of the market price prevalent on the date of the importation of the goods in accordance with law. The appeal is disposed of in the above manner.
 

N.K. Bajpai, Member (T)

9. I have carefully studied the order written by the Hon'ble President and concurred in by three learned Members of the Larger Bench. I do not find it possible, with great respect, to persuade myself to fall in line with the majority view. Hence this separate order.

10. The question referred to the Larger Bench was - what should be the date for the purpose of ascertaining the "market price" of the goods confiscated under Section 125 of the Customs Act. The existing view of the Tribunal as indicated in the case of Ashzvini Vanaspati (supra) is expressed rather cryptically in the following words :-

"Market price when and where? Obviously at the time and place of importation. The offending act which rendered the goods liable to confiscation was the import at a particular time and place. It is, therefore, the market price on the date of import and at the place of import that has, in the first instance, to be ascertained."

11. For detailed reasons recorded in Para 13 of the order of the referring Bench, it was considered that the conclusion about the date of import being the material date for determining the market price of the confiscated goods did not flow from the language of Section 125, apart from being incapable of implementation. I still consider that even after taking into consideration the arguments of the learned Counsel Shri A.K. Jain and the case law cited by him, the position has not changed and the material date for determining the market price should be the date when the adjudicating authority is about to pass the order of confiscation of the goods.

12. I do not dispute the argument of Shri Jain that the cause of action leading to the confiscation of the goods arises on the date of their import into India. But the order of confiscation is passed subsequent to the import of the goods and it is at the time of passing the order of confiscation that the adjudicating authority has to fix the fine in lieu of confiscation. In fact, a careful reading of Section 125 itself makes this position abundantly clear. To quote :

"Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may ... and shall, ...give to the owner of the goods an option to pay in lieu of confiscation such fine as the said officer thinks fit."

13. Therefore, the occasion for fixing the fine in lieu of confiscation would arise only when the officer is proceeding to pass the order of confiscation. If this option is to be real and not illusory, the quantum of fine should be such that the option of clearing the goods on payment of fine should be capable of being exercised. In a case in which, because of the change in the circumstances the market price of the goods has gone down when the time for exercising the option has come, but the fine has been fixed with reference to the market price prevailing on the date of import, it is quite clear that the importer will not be able to clear the goods because the fine would be high having been calculated with reference to the market price prevailing on the date of import. Conversely, in a case in which the market price has gone up, the fine having been fixed with reference to the increased market price, the importer cannot get the "bonanza or profit for an illegal transaction of import" referred to by the Delhi High Court in Jain Exports case (supra). Thus, in both circumstances, the option would not be rendered "illusory" if the material date for ascertaining the market price is the date when the adjudicating authority is about to pass the order of confiscation. The position, as we have seen, would be very different if the date for ascertaining the market price is the date of import.

14. A careful reading of Section 125 would also indicate that this section does not specify that the market price should be the one prevailing on the date of import. The Courts have also interpreted the section to invest a large measure of discretion in the adjudicating authority.

15. I shall now deal with the cases cited by the Hon'ble President. In Kothari's case (supra) the question for consideration before the High Court was not the date for determining the market price but that the exercise of discretion should be done judicially and not be controlled by the dictates of the Board or any other authority.

16. So far as Ashwini Vanaspati's case (supra) is concerned, the referring Bench had dealt with it in considerable detail and it is because the Bench had taken a different view that the matter was referred to the Large Bench. The decision in Vaghani's case (supra) is on the same lines and the question specifically decided was that the market price was of goods of like kind and quality and not of the goods under import. The second question was about the acceptability of the import licence. A similar view was expressed by the WRB in Kalpana Import & Export Agency case (supra).

17. In Krishna Balaram's case (supra) the question for consideration of the learned Single Member of the Tribunal was not the date of ascertaining the market price but the quantum of fine in the facts and circumstances of that particular case.

18. In Shah Tradings case (supra), the question for consideration of the learned Single Member of the Tribunal was the absence of evidence that the market price of the goods had been ascertained.

19. In S. Rajendran's case (supra) the question for consideration was the amount of compensation to be given to the appellant when his appeal was allowed and he was given the option to redeem the gold, but the gold had been sent to the Mint for disposal. The Tribunal held that the department should pay to the appellant the value of the gold on the date of its seizure.

20. In the case of Jain Exports (Pvt.) Ltd. (supra), what the Supreme Court observed was that while determining the question of quantum of redemption fine it is essential to consider the facts and circumstances relevant to the bona fide conduct of the importer. In the case of Arvind Mohan Sinha v. Amulya Kumar Biswas (supra) the question for consideration was the gravity of the offence to be looked into while fixing the quantum of fine.

21. Thus, the Tribunal has specifically held in three cases - Ashwini Vanaspati's case, Vaghani's case and Kalpana Import & Export Agency's case that the material date for determination of the market price is the date of import, and it is this view with which the referring Bench differed for reasons recorded in their order. It is this point which was required to be considered by the Larger Bench.

22. For reasons recorded in the foregoing paragraphs, with respect, I take a different view and propose that the market price should be determined at the time of passing the order of confiscation of the goods and not at the time of import of the goods into India.

Final Order

23. In view of the majority view, we direct the adjudicating authority to recalculate redemption fine on the basis of the market price prevalent on the date of the importation of the goods in accordance with law. The appeal is disposed of in the above manner.