Redemption under customs confiscation law may be granted despite smuggling-related liability, with penalty subject to reconsideration.

Foreign currency brought into India without declaration was treated as liable to confiscation because the import regulations required declaration to Customs and the amount exceeded the permitted ceiling. Gold bars were also held liable to confiscation where they were attempted to be cleared without declaration, no lawful acquisition was shown, and the conduct indicated participation in smuggling. On redemption, section 125 was applied to hold that absolute confiscation was not compulsory on the facts found, so denial of any redemption option was unsustainable. The penalty was likewise found excessive and required reconsideration after hearing the appellant, with the matter remitted for determination of redemption fine and reasonable penalty.

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Issues: (i) whether the foreign currency brought into India without declaration was liable to confiscation; (ii) whether the gold bars were liable to confiscation for non-declaration and lack of lawful acquisition; and (iii) whether absolute confiscation and the penalty required modification by granting redemption under section 125 and redetermination of penalty.

Issue (i): whether the foreign currency brought into India without declaration was liable to confiscation.

Analysis: The regulation governing import of foreign exchange required declaration to Customs authorities on arrival, while providing a limited exemption only where foreign currency notes did not exceed the prescribed ceiling. The appellant brought in foreign currency exceeding the permissible limit without declaration. The cited earlier order was distinguished because it proceeded on a different factual footing and without considering the relevant regulation.

Conclusion: The foreign currency was correctly held liable to confiscation.

Issue (ii): whether the gold bars were liable to confiscation for non-declaration and lack of lawful acquisition.

Analysis: The gold bars were attempted to be cleared without declaration and no proof of lawful acquisition was produced. The finding also showed participation in the smuggling transaction, and the law treats smuggling of gold and abetment of that offence alike for confiscatory purposes.

Conclusion: The gold bars were correctly held liable to confiscation.

Issue (iii): whether absolute confiscation and the penalty required modification by granting redemption under section 125 and redetermination of penalty.

Analysis: Section 125 enabled the Commissioner to allow redemption on payment of fine, and there was no statutory compulsion to order absolute confiscation in the facts found. The denial of any redemption option was therefore unsustainable. The penalty was also considered excessive and required reconsideration after hearing the appellant.

Conclusion: Absolute confiscation and the penalty were set aside, with directions to determine redemption fine and reasonable penalty after hearing the appellant.

Final Conclusion: The confiscation findings on merits were maintained, but the matter was sent back for grant of redemption option and reassessment of penalty, leaving the appellant with partial relief.

Ratio Decidendi: Even where goods are liable to confiscation for non-declaration or smuggling-related conduct, the adjudicating authority may grant redemption under section 125 unless the statute mandates absolute confiscation; denial of that option and an excessive penalty are liable to be set aside and remitted for reconsideration.

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