2008 (8) TMI 650 - AT - Customs

Imposition of Redemption fine, in absence of confiscation - Held that - matter referred to Larger Bench.

Summary

Issues:
1. Confiscation of waste oil declared as fuel oil.
2. Imposition of fine in lieu of confiscation when goods are not available for confiscation.

Confiscation of Waste Oil:
The case involved the importation of old vessels along with remnant oil declared as fuel oil, diesel oil, and lube oil for breaking/scrapping. Subsequently, it was found that the goods declared as fuel oil were actually off-specification waste oil. The Additional Commissioner proposed confiscation of the waste oil and imposed penalties. The Commissioner (Appeals) set aside the confiscation of 87.345 MT of waste oil but upheld the confiscation of 2.871 MT, reducing the penalty. The Revenue appealed against setting aside the confiscation of 87.345 MT of waste oil. The issue was whether the waste fuel should be held liable for confiscation and if a fine could be imposed in lieu of confiscation even when the goods were not available for confiscation.

Imposition of Fine in Lieu of Confiscation:
The Tribunal considered conflicting views on whether a fine in lieu of confiscation could be imposed under Section 125 of the Customs Act, 1962 when the goods were not available for confiscation. Citing precedents, the Tribunal noted the divergence in opinions on this issue. While some cases allowed the imposition of a fine even when goods were not available for confiscation, others held that no fine could be imposed in such circumstances. Given the conflicting views, the Tribunal decided to refer the case to a Larger Bench for resolution.

In conclusion, the Tribunal forwarded the case to the Hon'ble President to constitute a Larger Bench to resolve the conflicting views on the imposition of a fine in lieu of confiscation when goods are not available for confiscation.