Customs duty remains independently payable despite absolute confiscation, as duty and confiscation operate in distinct fields.

Customs duty liability under Section 12 is independent of confiscation under Sections 111 and 125 of the Customs Act, 1962. Absolute confiscation is a penal consequence and does not, by itself, extinguish the importer's duty obligation arising from the import transaction. On that footing, duty remained recoverable on goods that had been cleared and later absolutely confiscated, and the Tribunal's contrary view was set aside. The ruling treats duty and confiscation as operating in distinct fields and applies the earlier Supreme Court principle on independent duty liability.

---

---

Issues: Whether customs duty could be denied on goods that had been cleared and later absolutely confiscated under Section 111 of the Customs Act, 1962.

Analysis: The duty liability under Section 12 stands on a different footing from confiscation under Sections 111 and 125. Confiscation is a penal consequence, whereas the obligation to pay import duty arises independently from the import transaction itself. The fact that goods were absolutely confiscated after clearance did not extinguish the duty liability. The earlier Supreme Court ruling relied upon in the judgment was applied to hold that duty and confiscation operate in distinct fields.

Conclusion: The demand of duty on the confiscated goods was rightly recoverable and the Tribunal erred in setting it aside.

Final Conclusion: The appeal succeeded and the questions of law were answered in favour of the Revenue.

Ratio Decidendi: Liability to pay customs duty is independent of confiscation proceedings, and absolute confiscation under the Customs Act does not by itself exempt the importer from duty.

---