2008 (8) TMI 670 - AT - Customs

Redemption fine - confiscation of Prohibited/restricted goods - Section 125 of the Customs Act, 1962 - whether the adjudicating authority has the power under the provisions of Customs Act, to offer of redemption fine in lieu of confiscation of prohibited/restricted goods those are confiscated?

Summary

Issues:
1. Whether the adjudicating authority has the power to offer redemption fine in lieu of confiscation of prohibited/restricted goods.

Analysis:
The case involved two stay petitions against an order-in-appeal regarding the confiscation of imported air guns declared by the appellants. The lower authority had ordered confiscation with an option for redemption on payment of fines and penalties. The Commissioner (Appeals) set aside the orders-in-original, stating that the goods were prohibited and hence confiscation was justified, but redemption was not legally supported. The appellant argued that the adjudicating authority had the power to offer redemption under Section 125 of the Customs Act. The key issue was whether the adjudicating authority could offer redemption for prohibited goods.

The provisions of Section 125 of the Customs Act were crucial in this case. Section 125(1) allows the adjudicating officer to offer redemption in lieu of confiscation for prohibited goods. The appellant relied on previous tribunal decisions to support their argument that redemption could be offered even for prohibited goods. The Tribunal's decision in the case of Gauri Enterprises emphasized that absolute confiscation should be an exception rather than a rule, especially considering changes in the objects and reasons of relevant acts. The Vice-President, Third Member, in the case of Universal Traders also supported the interpretation of Section 125 to allow redemption for prohibited goods. Both cases highlighted that even prohibited goods could be redeemed upon payment of fines, establishing a legal precedent.

Ultimately, the Tribunal found merit in the appellant's argument and held that the impugned orders were unsustainable. The appeals were allowed, and the orders were set aside. The decision was based on the clear provisions of Section 125 and the established legal precedent that redemption could be offered for prohibited goods. The judgment reaffirmed the authority of the adjudicating officer to provide the option of redemption in such cases, emphasizing that absolute confiscation should be an exception rather than the rule, aligning with the evolving legal landscape and objectives of relevant acts.