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TMI Blog1987 (3) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... eing given by the State Government that in the event of the duty being chargeable the same shall be paid. 4. The machinery and equipment arrived at Bombay and were cleared by the petitioner in February, 1976 and the same was transported to plant premises at Chandigarh and Ludhiana. In April, 1976 the officers of the Central Excise Collectorate, Chandigarh, found certain discrepancies in the goods which were found at the petitioner's premises and with the details given in the Customs Clearance Permit (CCP) and the Bill of Entry. The goods so imported were accordingly seized. A show cause notice dated 4th October, 1976 was issued alleging contravention of the provisions of the Customs Act and the Import Trade Control Regulations. The goods are categorised into three categories and the allegation was that the petitioner had (a) under-declared the value of goods cleared under the CCP and Bill of Entry to the extent of Rs. 5,01,737.74; (b) unauthorisedly imported farm/dairy machinery/equipment to the extent of Rs. 9,21,165.79; and (c) unauthorisedly imported goods other than farm and dairy machinery/equipment to the extent of Rs. 96,663/- against prohibition and restrictions. 5. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been filed in which the petitioner has prayed for exemption from payment of Customs duty, quashing of the imposition of redemption fine and for release of the goods. 9. The first submission of the petitioner before me was that the Central Government ought to have exercised its power under Section 25(2) of the Customs Act and granted exemption from payment of duty. Section 25(2) reads as follows :- "25(2). If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in such case, exempt from payment of duty, under circumstances of an exceptional nature to be stated in such order, any goods on which duty is leviable." 10. Mr. Sanghi, learned counsel for the respondents has placed before me the file containing the decision of the Central Government with regard to the grant of exemption under Section 25(2). The perusal of the file shows that the policy of the Government is to grant exemption in exceptional and rare cases where the goods which are imported are meant for distribution free of cost or at a subsidised price. The goods which were imported in the present case did not fall into any of these two categories. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day goods in Category 'A' have not been released by the respondents. It was only because the officers concerned feel that no action will be taken against them that has resulted in the said plant and machinery continuing to lie where it is at present. This is, of course, on the assumption that all the items still exist there and they have not been pilferred or done away with. This is a case of criminal neglect on the part of the authorities concerned and it would be a fit case where the department should take appropriate action against the delinquent officers. 12. With regard to the goods falling in Category 'B', the contention of the learned counsel for the petitioner is that no Customs duty is payable. It is submitted by him that on a correct interpretation of Section 125 of the Customs Act read with Sections 2(25) and 2(30), the redemption fine on imported goods as defined in Section 2(30) cannot, exceed market price less Customs duty. In case of goods other than imported goods, it is submitted, the redemption fine cannot exceed the market price. It was, therefore, sought to be contended that "while in case of imported goods duty will be separately payable at the time of cleara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ket price of those goods. The proviso to Section 125(1) provides that not only is the redemption fine not to exceed the market price of the goods but from the market price the Customs duty which is chargeable is to be deducted. In other words, the sum total of the Customs duty and the redemption fine is not to exceed the market price of the goods. The section nowhere postulates or provides that the redemption fine which is determined as being payable would include therein the Customs duty payable on those goods In fact, sub-section (2) of Section 125 leaves no manner of doubt that the redemption fine is to be in addition to the Customs duty which is payable. As I read Section 2(25), it is apparent that those goods which have been cleared for home consumption on payment of Customs duty is not included within the purview of the expression "imported goods". Other goods which are imported from abroad and which have not been cleared for home consumption have necessarily to be regarded as imported goods on which Customs duty, if leviable, would be payable. In the instant case, the goods were imported from abroad and provisional duty-free clearance was permitted on the condition that if e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en if the goods have gone past the Customs' barrier without payment of duty, it does not mean that the liability to pay duty has come to an end. The concept of "town seizure" in any case, even if it is assumed to be valid, does not arise in the present case. The petitioner was allowed to clear the goods on provisional exemption from payment of Customs duty. If the provisional clearance had not been granted, the petitioner would have been asked to pay Customs duty in addition to the redemption fine at the time of clearance. The petitioner cannot be absolved of payment of Customs duty merely because provisional clearance was allowed on the petitioner's undertaking to pay the Customs duty, if there was no exemption granted under Section 25 of the Customs Act. In the present case such an exemption having been refused, the liability to pay the duty clearly arises and this liability is in addition to the payment of redemption fine. In this view of the matter, the petitioner is liable to pay the Customs duty on goods falling in Category 'B'. The petitioner has already paid the redemption fine of Rs. 1.20 lakhs. On petitioner paying the Customs duty on Category 'B' goods, he would be entit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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