2009 (6) TMI 139 - HC - Customs

Whether in view of language of the provisions Sec. 125 of the Customs Act, a discretion vests with the Adjudicating Authority to give option to redeem the goods even though the said goods are liable for absolute confiscation as the importation of said goods are prohibited? - Section 125(1) deals with two situations (1) the importation and exportation of prohibited goods and (2) the importation and exportation of any other goods. Insofar as importation or exportation of prohibited goods, the expression used is that where the goods were confiscated, the officer may . - insofar as the prohibited goods are concerned, there is discretion in the officer to release the confiscated goods - The officer has exercised his discretion. - The question which the Revenue has raised before us therefore would not arise.

Summary

Issues:
1. Interpretation of Section 125 of the Customs Act regarding the discretion of the Adjudicating Authority to redeem confiscated goods.
2. Justification of the Tribunal's decision to release goods on payment of redemption fine despite being liable for confiscation.

Analysis:

Issue 1: Interpretation of Section 125 of the Customs Act
The High Court analyzed the provisions of Section 125 of the Customs Act, 1962, which provides for the option to pay a fine in lieu of confiscation of goods. The section distinguishes between prohibited goods and other goods. For prohibited goods, the officer "may" give an option for redemption, while for other goods, the officer "shall" provide this option. The court clarified that the officer has discretion to release prohibited goods, as mentioned in the section. In the case at hand, the officer exercised this discretion, and the Tribunal upheld this decision.

Issue 2: Justification of Tribunal's Decision
The Tribunal's decision to allow the release of goods on payment of a redemption fine, even though they were liable for confiscation, was challenged by the Revenue. However, the High Court concluded that since the Adjudicating Authority has discretion in such matters, the questions raised by the Revenue had no merit. The court emphasized that the officer's discretion in releasing prohibited goods was correctly exercised in this case. Consequently, the High Court dismissed the appeal, affirming the Tribunal's decision.

In summary, the High Court upheld the Tribunal's decision regarding the redemption of confiscated goods under Section 125 of the Customs Act. The court clarified the distinction between prohibited goods and other goods in terms of the officer's discretion to provide the option for redemption. The judgment highlighted that the Adjudicating Authority's exercise of discretion was valid, leading to the dismissal of the Revenue's appeal.