Redemption fine requires seized goods, while breach of exemption conditions can still attract reduced penalty.

Redemption fine cannot be imposed where the imported containers were neither seized nor available for confiscation, because effective confiscation is a prerequisite for levy of such fine; that component was deleted. Breach of the exemption notification condition requiring re-export of the containers within six months still justified penalty, as the non-compliance was admitted; however, the penalty was reduced in view of the circumstances. The note states that relief was granted only in part, with the redemption fine removed and the penalty sustained at a lower amount.

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Issues: (i) Whether redemption fine could be sustained when the imported containers were neither seized nor available for confiscation; (ii) Whether penalty was leviable for breach of the condition attached to the exemption notification and, if so, to what extent.

Issue (i): Whether redemption fine could be sustained when the imported containers were neither seized nor available for confiscation.

Analysis: The containers ordered to be confiscated were not seized, were not released provisionally, and were not available for confiscation. In such circumstances, confiscation could not be effected in the manner required for levy of redemption fine.

Conclusion: Redemption fine was not sustainable and was set aside.

Issue (ii): Whether penalty was leviable for breach of the condition attached to the exemption notification and, if so, to what extent.

Analysis: There was an admitted violation of Notification No. 104/94-Cus dated 16.3.1994 because the containers were not re-exported within the stipulated period of six months. The breach justified imposition of penalty, though the overall circumstances warranted reduction.

Conclusion: Penalty was leviable, but it was reduced from Rs. 1 lakh to Rs. 50,000/-.

Final Conclusion: The relief was granted only in part by deleting the redemption fine while sustaining penalty with a reduced quantum.

Ratio Decidendi: Redemption fine cannot be imposed when the confiscated goods are neither seized nor available for confiscation, but penalty may still be imposed for breach of a condition of exemption notification.

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