Redemption fine pre-deposit is not due until redemption is exercised; penalty may be stayed where the issue is debatable.

After confiscation under the Customs Act, title vests in the Central Government and the redemption fine does not become exigible for pre-deposit until the option to redeem the goods is exercised. On that basis, insistence on deposit of redemption fine at the interim stage was not warranted. The penalty issue was treated as debatable, and because the matter had earlier been remanded for reconsideration of the importer's evidence, deposit of the penalty was waived and recovery stayed pending appeal. The duty and redemption fine demand was otherwise not displaced at this stage.

---

---

Issues: (i) whether pre-deposit of redemption fine was required when the confiscated goods had not been redeemed; and (ii) whether deposit and recovery of penalty should be waived pending appeal.

Issue (i): Whether pre-deposit of redemption fine was required when the confiscated goods had not been redeemed.

Analysis: Once goods are confiscated, title vests in the Central Government under Section 126 of the Customs Act, 1962 and continues so until the option to redeem on payment of fine is exercised. As the redemption option had not been exercised, there was no occasion to insist on deposit of the redemption fine at that stage.

Conclusion: Waiver of deposit of the redemption fine was not called for on the footing that the question did not arise at that stage.

Issue (ii): Whether deposit and recovery of penalty should be waived pending appeal.

Analysis: The question of penalty was debatable. The matter had earlier been remanded for reconsideration of the evidence produced by the importer, and the earlier penalty was substantially lower.

Conclusion: Deposit of the penalty was waived and recovery of the penalty was stayed.

Final Conclusion: Relief was granted only in respect of the penalty, while the demand relating to duty and redemption fine was not displaced at this stage.

Ratio Decidendi: After confiscation, the right of redemption fine does not become exigible for pre-deposit until the option to redeem the goods is exercised, and penalty may be stayed where the issue is debatable and the case warrants interim relief.

---