Redemption fine remains payable even if goods are not available, where diversion breaches concessional import conditions.

Goods cleared or exported on concessional conditions and later diverted in breach of those conditions are liable to confiscation under Customs law. Once confiscation is legally attracted, Section 125 of the Customs Act permits redemption fine in lieu of confiscation, and the physical non-availability of the goods at adjudication does not remove that power. The Tribunal therefore followed the binding view that the Adjudicating Authority should quantify and impose redemption fine, and the refusal to order confiscation and fine was not sustainable. The matter was remanded for determination of the fine.

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Issues: Whether goods exported in breach of the conditions of Notification No. 1/95-C.E. dated 4.1.95 and the Exim Policy 2002-2007 were liable to confiscation and whether redemption fine could be imposed even when the goods were not available for physical confiscation.

Analysis: The issue was held to be no longer res integra in light of the governing principle that where goods are imported or warehoused without duty on stipulated conditions and are later diverted in breach of those conditions, confiscation is authorized under the Customs law. Once confiscation is authorized, Section 125 of the Customs Act, 1962 applies, and the absence of the goods at the time of adjudication does not extinguish the power to impose redemption fine in lieu of confiscation. The Tribunal accordingly followed the earlier binding view and held that the Adjudicating Authority ought to quantify and impose fine.

Conclusion: The denial of confiscation and redemption fine was not sustainable, and the matter required remand for determination of the quantum of fine.

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