2009 (4) TMI 721 - AT - Customs

Tribunal upholds duty payment & fine for redeemed goods under Customs Act

The Appellate Tribunal CESTAT, Ahmedabad, upheld the Commissioner's decision requiring payment of duty along with a redemption fine under Section 125(2) ... Duty liability - Redemption of confiscated goods Issues involved: Interpretation of Section 125 of the Customs Act, 1962 regarding payment of duty along with redemption fine for confiscated goods.Analysis:The judgment by the Appellate Tribunal CESTAT, Ahmedabad, involved a crucial issue regarding the interpretation of Section 125 of the Customs Act, 1962. The Commissioner (Appeals) had ruled that when goods are confiscated and allowed to be redeemed on payment of a fine in lieu of confiscation under Section 125, duty is also to be discharged as per the provision of Section 125(2) of the Customs Act, 1962.The appeal was scheduled for multiple dates due to adjournments requested by the appellants, but they failed to appear for the hearing without any adjournment request. The learned D.R. contended that the issue was settled in previous Tribunal decisions, emphasizing that duty is payable when goods are redeemed on payment of a redemption fine under Section 125(2) of the Customs Act, 1962. The decision in Central India Institute of Medical Science v. C.C. (ACC), Mumbai was cited in support of this argument.In this case, 8,786 Kgs of imported polyester yarn were seized without payment of duty. The duty demand under Section 28 was set aside, but the Commissioner held that Section 125(2) applied, making the appellants liable to pay duty and clear the goods. The appellants argued that since the Joint Commissioner lacked jurisdiction to demand duty, they should not be required to pay duty under Section 125. However, the Tribunal rejected this argument, stating that Section 125(2) clearly mandates payment of duty along with the redemption fine when goods are redeemed in lieu of confiscation. As the appellants did not demonstrate that the imported goods had already incurred duty, the appeal was deemed meritless and rejected.In conclusion, the Tribunal upheld the Commissioner's decision, emphasizing the statutory requirement under Section 125(2) of the Customs Act, 1962 for the payment of duty in addition to the redemption fine when goods are redeemed in lieu of confiscation.