Bona fide purchaser protection bars second confiscation and penalty where goods were already redeemed after customs adjudication.

Goods already confiscated under the Customs Act and released on redemption after adjudication cannot be subjected to a second confiscation proceeding against a bona fide purchaser. Once the earlier confiscation process was completed and the goods re-entered circulation, the Department could not revive confiscation liability against a later purchaser who had no role in the import or the first adjudication. Penalties were also unsustainable because the purchaser was not involved in the misdeclaration, importation, or earlier contravention, and no material showed knowledge or participation. The confiscation and consequential penalties were therefore set aside, granting full relief to the assessee.

---

---

Issues: (i) Whether goods, after having been confiscated and redeemed on payment of redemption fine and penalty, could be subjected to a second confiscation proceeding against a bona fide purchaser; (ii) Whether penalties were sustainable against a purchaser who had no role in the import or the earlier adjudication.

Issue (i): Whether goods, after having been confiscated and redeemed on payment of redemption fine and penalty, could be subjected to a second confiscation proceeding against a bona fide purchaser.

Analysis: Once the goods had been confiscated under the Customs Act, 1962 and were released on redemption after adjudication, the Department could not initiate a fresh proceeding to re-confiscate the same goods from a subsequent bona fide purchaser. The earlier redemption had brought the goods back into circulation, and the purchaser had no role in the original import or the first adjudication. The principle applied was that a later purchaser cannot be saddled with liability arising from an earlier completed confiscation and redemption process.

Conclusion: The second confiscation was not sustainable and was set aside in favour of the assessee.

Issue (ii): Whether penalties were sustainable against a purchaser who had no role in the import or the earlier adjudication.

Analysis: The purchaser was found to be a bona fide purchaser and was not involved in the importation, misdeclaration, or the earlier customs proceedings. In the absence of any participatory role in the prohibited act or any material showing knowledge or involvement, the penal provisions could not be invoked against her.

Conclusion: The penalties imposed on the assessee were not sustainable and were set aside.

Final Conclusion: The appeal succeeded and the confiscation as well as the consequential penalties were annulled, with the assessee obtaining the full relief sought.

Ratio Decidendi: Goods once confiscated and redeemed after adjudication cannot be re-confiscated from a bona fide purchaser, and penalty cannot be imposed on a person who had no role in the import or the earlier contravention.

---