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Issues:
Challenge to the legality of confiscation of a ship under the Customs Act, 1962 and the imposition of a fine in lieu of confiscation. Detailed Analysis: 1. The petitioners challenged the legality of the order confiscating a ship under Section 115 of the Customs Act, 1962, but allowing redemption on payment of a fine. The ship was seized based on the belief that it was used for smuggling contraband goods. The Customs Authorities issued a show cause notice, and after considering objections, decided on confiscation under Section 115 of the Act. 2. The petitioners did not dispute the ship's use for smuggling but contested the amount of the fine imposed. The Proviso to Section 115(2) allows the owner to pay a fine not exceeding the market price of the smuggled goods. The total value of the contraband goods involved was Rs. 3,22,065, and the fine imposed was Rs. 3,70,000, which the petitioners argued was excessive. 3. The Customs Authorities argued that the unaccounted American Dollars found on the ship justified the higher fine. However, the court found that the show cause notice did not charge the Captain for the unaccounted amount, making it improper to consider it for imposing the fine. The court held that fines in such quasi-criminal proceedings must be based on specific charges, not assumptions. 4. The court ruled in favor of the petitioners, modifying the order to allow redemption of the ship on payment of Rs. 3,22,065, the total value of the contraband goods involved. The ship had already left, but the Department could enforce a bank guarantee for the specified amount, discharging the rest of the guarantee. 5. The judgment concluded without any cost orders, settling the matter in favor of the petitioners and clarifying the correct application of fines in cases of confiscation under the Customs Act, 1962.
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