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TMI Blog2018 (8) TMI 1409X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods, which would definitely be more than the duty. If redemption is not made then the person from whose possession the goods are seized merely looses the property in goods and there could be no further levy of duty on the bona fide purchaser. The Department, despite such confiscation could proceed for recovery of duty too, but only from the importer. Section 125 comes into play only after there is a confiscation effected by the Commissioner, which gives an option to the owner or the person from whom the goods were seized to apply for redemption. In applying for redemption, the owner or person from whom the goods were seized would have to pay the redemption fine as imposed by the Commissioner under Section 125(1) - The option being a choice of the person, there cannot be any contention raised against payment of short levy of duty, which is a necessary consequence of redemption under Section 125 of the Act. The customs duty and redemption fine can be demanded from the person in ownership and custody of the imported goods on an option exercised for redemption, despite there being no liability to duty on any person other than the importer - the imported goods on there being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also the duty levied, which results in refund of the duty levied as also the redemption fine remitted by the respondent. 3. The Tribunal reasoned that the respondent is a bona fide purchaser, that too after the two years prohibition of sale period. The respondent, not having imported the vehicle there could be no levy of duty on the subsequent purchaser nor is there cause for imposition of redemption fine, was the finding. The Tribunal relied on the decision of the Mumbai Bench of the Tribunal in 2000 (122) ELT 710 (T) [VXL India Ltd. v. Commissioner of Customs], which was confirmed by the High Court of Bombay in 2006 (193) ELT 396 (Bom) [Commissioner of Customs v. VXL India Ltd.]. It also relied on the decision dismissing the Special Leave Petition filed against the aforesaid decision of the Bombay High Court, as is seen from 2006 (197) ELT A121 (SC). Reliance was also placed on 2000 (115) ELT 3 (SC) [Mohan Meakin Ltd. v. CCE, Kochi]. 4. The questions of law as arising from the order of the Tribunal on which notice has been issued, as available in the memorandum of the Customs Appeal are the following: ( a) Whether Customs Duty and redemption fine can be demanded from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the goods so imported and to collect all duty and other charges payable on the goods in question before releasing the goods on payment of redemption fine (sic). It was also held that having released the goods thus into the market and permitting the sale of the same, in our opinion, it is not open to the Collector to initiate another proceedings under another clause of Section 111 to recover the so-called differences in valuation of the imported goods from the ultimate bona fide purchaser for value (sic). This puts the facts on a quite distinct area than that in this case. 6. The learned counsel for the respondent, however, would place reliance on the following statement of the Supreme Court, in para 6 of Mohan Meakin (supra): If the Collector failed to make a proper enquiry as to the market value of the goods and released the same after a half-hearted adjudication, we fail to see why a subsequent purchaser be saddled with the liability of undervaluation; more so in the background of the fact that the appellant had no role to play either in the import or earlier adjudication proceedings(sic). The argument is that as in the said case, here, the respondent is a bona fide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not the importer. On the above reasoning, it was found that there could not be recovery of short levy of duty from a bona fide purchaser, since under Section 28 there is no liability cast on any other person other than importer. We need not refer to the judgment of the Bombay High Court, since no separate reasoning is seen and paragraph No.7 of the order of the Tribunal, has only been extracted with approval. As was noticed earlier, the Supreme Court had rejected the SLP filed. Hence, there can be found no merger of the decision of the Bombay High Court with that of the Supreme Court and the decision rendered by the High Court remains to be that of the High Court. We are not persuaded to follow the said dictum laid down by the High Court and we differ from the same for the following reasons. 9. The liability on the subsequent purchaser would not at all be a consideration in interpreting Section 125 of the Act. As has been pointed out by the learned Standing Counsel, when there is a misdeclaration of value, the goods imported becomes prohibited goods, as has been defined under Section 2(33) of the Act, which includes violation of conditions subject to which the goods are permit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition, be liable to any duty and charges payable in respect of such goods. Section 125 comes into play only after there is a confiscation effected by the Commissioner, which gives an option to the owner or the person from whom the goods were seized to apply for redemption. In applying for redemption, the owner or person from whom the goods were seized would have to pay the redemption fine as imposed by the Commissioner under Section 125(1). Again as is seen from the above extracted sub-Section (2) of Section 125, 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 to the fine, be liable to any duty and charges payable in respect of such goods. Hence, when an option is exercised for redemption in lieu of confiscation, person opts not only to pay the redemption fine but also to make good the short levy of duty. The option being a choice of the person, there cannot be any contention raised against payment of short levy of duty, which is a necessary consequence of redemption under Section 125 of the Act. 12. Answering the questions of law, we find from the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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