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TMI Blog2015 (4) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... However, on a plain reading of the said provision, we are of the view that such a provision would not apply in case where option to pay fine in lieu of confiscation is not exercised by the importer. Trigger point is the exercise of a positive option to pay the fine and redeem the confiscated goods. What is emphasised is that when in the Show Cause Notice issued under Section 124, nothing was stated about the payment of import duty, there could not have been direction to that effect in the final order Further, insofar as Section 125(2) is concerned, the contingency contained therein did not occur in the present procedure for want of exercise of option to pay fine. We, thus, are of the opinion that the view taken by the CESTAT is correct and the contrary view taken by the High Court in the impugned judgment [2006 (4) TMI 137 - HIGH COURT OF JUDICATURE AT BOMBAY] is not warranted on the interpretation of Section 125(2) of the Act. Argument raised in case [2001 (8) TMI 113 - SUPREME COURT OF INDIA] predicated on Section 28(1) of the Customs Act and plea was that notice was not issued by the “competent officer” and was also beyond the time prescribed under Section 28(1). In that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid stipulations, it is clear that these conditions are to be fulfilled not at the time of the import but in future, by the importer while utilising the imported equipment. Therefore, the conditions are continuing in nature. The Institute was not charged any import duty as it had produced requisite certificate dated 11.02.1991 issued by the Director General of Health Services, New Delhi. After sometime, the Revenue authorities/respondent herein came to know that the Institute was committing breach of the aforesaid conditions, as it had not been providing free diagnostic treatment to at least 40 per cent of all its outdoor patients and it was also not giving free treatment to indoor patients having income of less than ₹ 500 per month and for this purpose, it had not got 10 per cent hospital beds reserved for such patients. It resulted in issuance of show cause notice to the Institute. Pertinently, this show cause notice dated 12.01.2000 was issued under Section 124 of the Customs Act, 1962 (hereinafter referred to as Act) and after stating that the aforesaid breach was allegedly committed by the appellant, in the show cause notice, it was proposed as under: - 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailure to discharge the continuing obligation under notification No. 64/88 during the material period . Penalty of ₹ 25,000/- under Section 112(a) of the Act was also levied. The Institute challenged the aforesaid order by filing appeal before the Customs, Excise Service Tax Appellate Tribunal (hereinafter referred to as 'CESTAT'). Since we are concerned with that part of the order vide which the duty was imposed, henceforth we will confine our discussion to this aspect alone. Before the CESTAT, submission of the Institute was that in the Show Cause Notice nothing was stated about the payment of duty and as the Show Cause Notice was conspicuously absent in this behalf, in the final order, the duty could not have been demanded. It was argued that such an order would be violative of the principle of nature justice. The Institute also referred to the provisions of Section 125 of the Act which gives an option to pay fine in lieu of confiscation. It was argued that as per this provision, option is to be given to the importer and it is left to the importer who has to exercise the same. It would imply that if no such option is exercised, the goods are not to be redeemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicating authority was set aside. Not satisfied with the aforesaid outcome, the respondent-Revenue challenged the order by filing appeal before the High Court of Bombay. It was argued by the Department that the moment order of confiscation is passed with option given to the Institute to redeem the goods on payment of fine, the eventuality comtemplated under Section 125(2) of the Act comes into operation and therefore, in the scheme of things, it was permissible for the Department to charge duty as well. It was also argued that when it is found that the Institute had violated the conditions stipulated in Notification No. 64/83 dated 01.03.1988, the only conclusion would be that duty was payable by the Institute and therefore, the Department was well within its right to demand the duty. The High Court, after discussing the respective contentions in detail, accepted the submissions of the Department and set aside the order of the CESTAT. The rational given by the High Court is contained in Para 41 of the impugned judgment which interprets the provisions of Sub-section (2) of Section 125 of the Act as well reflects the reasoning adopted by the High Court in support of its view. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit : Provided that, without prejudice to the provisions of the proviso to sub-section (2) of section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon. (2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1) the owner of such goods or the person referred to in sub-section (1) shall, in addition, be liable to any duty and charges payable in respect of such goods. It may be seen from the bare reading of the aforesaid Section that under Section 125(1) of the Act, option is given to the importer whose goods are confiscated, to pay the fine in lieu of confiscation and redeem the confiscated goods. Before this ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed , sub-section (2) would get attracted. We do not agree with the aforesaid submission of Mr. Radhakrishnan. The order confiscating the goods has already been reproduced above. Insofar as the payment of fine is concerned, only option was given (and that was only course of action which could be visualised under section 125). The order categorically states that the importer may redeem the confiscated goods on payment of fine of ₹ 1,00,000 (Rs. One lakh only) Indubitably, unless an option is exercised, fine does not become payable. Sub-section (2) of Section 125 uses the expression imposed by stating where any fine in lieu of confiscation of goods is imposed . In Black law dictionary (Tenth edition), the word 'impose' is defined as To levy or exact (a tax or duty) . Thus, it has to be a levy or exact which is become payable and has to be paid. Likewise, the word 'impose' is defined by Oxford English Dictionary, as relevant for the purpose of the present case, as Lay or inflict (a tax, duty, charge, obligation, etc.) (on or upon), esp. forcibly; compel compliance with; force (oneself) on or upon the attention etc. of. In view of the above, we cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndependent action by issuing Show Cause Notice to the effect that the Institute had violated the terms of exemption notification and therefore, was liable to pay duty. What is emphasised is that when in the Show Cause Notice issued under Section 124, nothing was stated about the payment of import duty, there could not have been direction to that effect in the final order Further, insofar as Section 125(2) is concerned, the contingency contained therein did not occur in the present procedure for want of exercise of option to pay fine. We, thus, are of the opinion that the view taken by the CESTAT is correct and the contrary view taken by the High Court in the impugned judgment is not warranted on the interpretation of Section 125(2) of the Act. High Court is not correct in observing that it is immaterial whether option under Section 125(2) is exercised or not. We would like to point out that the High Court has referred to the judgment in the case of 'Commissioner of Customs(Import), Mumbai v. Jagdish Cancer Research Centre' [2001 (6) SCC 483] in support of its conclusion. However, on going through the said judgment, we find that the issue with which we are concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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