Undeclared gold biscuits faced confiscation and penalty, but redemption was allowed with a fact-based redemption fine.

Undeclared imported gold biscuits were held liable to confiscation and penalty because the surrounding circumstances showed they were not covered by the declaration and no duty had been paid, while the retractions were treated as an afterthought. Although confiscation stood, the goods were treated as not prohibited, so redemption under the Customs Act was allowed on the facts. The Tribunal fixed the redemption fine at Rs. 2,50,000, balancing the circumstances of the case and the connected matter.

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Issues: (i) Whether the gold biscuits were liable to confiscation and the appellants liable to penalty for non-declaration and non-payment of duty; (ii) whether the gold, though confiscable, should be allowed redemption under Section 125 of the Customs Act and, if so, at what fine.

Issue (i): Whether the gold biscuits were liable to confiscation and the appellants liable to penalty for non-declaration and non-payment of duty.

Analysis: The imported gold was found to have been brought and removed in a coordinated manner, with the contemporaneous version and surrounding circumstances showing that the biscuits connected with the present proceedings were not covered by the declaration made by the appellant and no duty had been paid for them. The retractions were treated as an afterthought. On that footing, the goods attracted confiscation and the appellants' role in clandestine clearance justified penalty.

Conclusion: The gold was liable to confiscation and the penalties were not interfered with, thus this issue was answered against the appellant.

Issue (ii): Whether the gold, though confiscable, should be allowed redemption under Section 125 of the Customs Act and, if so, at what fine.

Analysis: Section 125 of the Customs Act permits redemption in the case of goods not prohibited, and the goods were treated as not prohibited for the appellant in the facts found. Once confiscation was upheld, the question was confined to the appropriate redemption fine, which had to reflect the totality of circumstances and the earlier decision in the connected matter.

Conclusion: Redemption was allowed on payment of fine of Rs. 2,50,000/-, so this issue was answered partly in favour of the appellant.

Final Conclusion: The confiscation and penalties stood, but the appellant was granted redemption of the confiscated gold on payment of the enhanced fine fixed by the Tribunal.

Ratio Decidendi: Undeclared imported goods are liable to confiscation and penalty, but where the goods are not prohibited, redemption under Section 125 of the Customs Act must be allowed and the redemption fine is to be fixed on the facts of the case.

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