2008 (4) TMI 243 - AT - Customs

Redemption fine - Commissioner has held that goods which were not accounted for and physically not available for confiscation are also liable to confiscation under Section 111(o) of the Customs Act, 1962 but has refrained from imposing any redemption fine, as the goods are not physically available for confiscation impugned order passed by the Commissioner is legal and proper and does not warrant any review on the issue raised by the Revenue

Summary

Issues:
Imposition of redemption fine under Section 111(o) of the Customs Act, 1962 when goods are not physically available for confiscation.

Analysis:
The Commissioner held that unaccounted diamonds are liable to confiscation under Section 111(o) of the Customs Act, 1962, but refrained from imposing a redemption fine due to the goods' unavailability. However, a penalty of Rs. Five lakhs was imposed. The Revenue argued that the Commissioner erred as customs authorities can impose a redemption fine even if goods cleared under bond are later found irregular. They cited a Tribunal case upheld by the High Court and Supreme Court supporting this view. The Revenue requested remand for redemption fine imposition.

Upon examination, the Member (T) found no merit in the Revenue's appeal for several reasons. Firstly, the penalty indirectly accounted for the redemption fine that would have been imposed if the goods were available for confiscation. Secondly, the Revenue's claim that the Tribunal's view on imposing a fine without physical goods was upheld by higher courts was deemed incorrect. The Madras High Court did not entertain the appeal on this point, considering it a question of fact. Thus, the Tribunal's decision was not confirmed by higher courts.

Additionally, the Member noted conflicting Tribunal decisions on redemption fine imposition when goods are not physically available for confiscation. Some cases supported the imposition of a fine in such situations, while others did not. The Member highlighted various cases and their differing stances on redemption fine imposition when goods are not redeemable.

Conclusively, the Member upheld the Commissioner's order, deeming it legal and proper. The appeal by the Revenue was dismissed as not maintainable. The judgment emphasized the complexities and contradictions in legal interpretations regarding redemption fines in cases where goods are not physically available for confiscation.