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Issues involved: Challenge to order u/s 130 of Customs Act, 1962 for enhancing fine and penalty, applicability of Section 125(1) of the Act.
In the judgment, the High Court of Punjab & Haryana at Chandigarh addressed the revenue's challenge against the order of the Customs, Excise and Service Tax Appellate Tribunal, New Delhi. The Tribunal had refused to enhance the fine and penalty, stating that redemption fine is based on the margin of profit expected by the assessee from the confiscated goods. It was noted that no inquiry was conducted to determine the market value or compute the profit margin. The Court upheld the Tribunal's decision, dismissing the revenue's plea for increasing the fine and penalty. Regarding the contention raised by the revenue's counsel under Section 125(1) of the Act, the Court held that the imposition of fine in lieu of confiscation is not mandatory. The proviso to the section specifies that the fine should not exceed the market price of the confiscated goods, minus the duty chargeable for imported goods. As no inquiry was conducted to ascertain the market price, the Court found that the essential requirement for applying Section 125 was absent. Additionally, the provision is discretionary in nature, and as such, the Court found no justification to interfere with the Tribunal's order. Consequently, the appeal was dismissed for lack of merit.
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