2009 (6) TMI 161 - HC - Customs

Whether appellants are bound to pay duty on the confiscated goods if not redeemed by paying fine - Petitioner sought to place reliance on Section 23 of the Customs Act which we have adverted to earlier to contend that if the owner of imported goods relinquishes his title to the goods, he shall not be liable to pay the duty thereon. relinquishment is different from non-payment of redemption fine - The person however, who had imported the goods does not cease to have liability for payment of duty. As he continues to be the person who had imported the goods and claims title of the goods. The two sections therefore, operates in two different situations and are mutually exclusive. Held that duty liability not ceases when redemption fine not paid on confiscated goods Further it is held that redemption fine is different from duty of custom and in the nature of recompense to State

Summary

Issues Involved:
1. Whether the appellant is liable to pay customs duty on confiscated hospital equipment even if not redeemed?
2. Whether CESTAT can differentiate between parties in a common order regarding duty payment on confiscated goods?

Analysis:

Issue 1: Liability to Pay Customs Duty on Confiscated Goods
The appellant imported hospital equipment under a specific notification without paying duty. The revenue argued that duty exemption was not valid due to non-compliance with notification conditions. The main issue was whether duty is payable when imported goods are confiscated but not redeemed by paying a fine. Section 125 of the Customs Act allows for the option to pay a fine in lieu of confiscation. If a fine is imposed, the person is also liable to pay duty and charges. The argument was made that if goods are not released by paying the fine, duty payment does not arise. However, the court clarified that duty, fine, and penalty are distinct concepts under the Act. Duty is levied on imported goods, while a fine is a recompense to the state. The court referred to previous judgments to support the conclusion that duty remains payable even if goods are confiscated but not redeemed.

Issue 2: Differential Treatment by CESTAT
The appellant raised concerns about CESTAT differentiating between parties in a common order regarding duty payment on confiscated goods. The court noted that while the appellant cited a case where duty was not payable for another party, it does not automatically exempt them from duty payment. The court emphasized that exemptions or remissions must be provided under the Act, and arbitrary decisions by tribunals cannot override statutory provisions. The court held that if a party feels aggrieved by a decision, they should file an appeal rather than seeking exemption based on differential treatment.

In conclusion, the court answered the first question in favor of the revenue, stating that duty is payable on confiscated goods even if not redeemed. The second question remained unanswered due to the absence of the other party involved. The appeal was disposed of accordingly, emphasizing the importance of statutory provisions and legal remedies for challenging decisions.