Redemption option in customs confiscation must be offered when goods are not absolutely prohibited but imported improperly.

Where gold imported by concealment in baggage was not absolutely prohibited but was liable to confiscation because of the manner of import, Section 125 of the Customs Act required the adjudicating authority to offer redemption on payment of fine in lieu of confiscation. The confiscation order treated absolute confiscation as the only course and failed to apply that distinction. On that basis, the appellate and revisional orders based on the same approach were also unsustainable and were set aside, with the matter remanded for fresh adjudication in accordance with law.

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Issues: (i) Whether, on confiscation of gold liable to duty and imported by concealment in baggage, the adjudicating authority was bound under Section 125 of the Customs Act, 1962 to give an option to pay fine in lieu of confiscation; (ii) Whether the confiscation and consequential appellate and revisional orders could be sustained without considering that distinction.

Issue (i): Whether, on confiscation of gold liable to duty and imported by concealment in baggage, the adjudicating authority was bound under Section 125 of the Customs Act, 1962 to give an option to pay fine in lieu of confiscation.

Analysis: Gold in any form other than ornaments was treated by the Baggage Rules, 1978 as an article not importable free of duty, but not as wholly prohibited goods. Where goods are not prohibited but become liable to confiscation because of the manner of import, the statutory scheme under Section 125 requires the adjudicating officer to offer redemption on payment of fine in lieu of confiscation. The confiscation order did not take this distinction into account and proceeded directly to absolute confiscation.

Conclusion: The adjudicating authority was required to grant an option to pay fine in lieu of confiscation.

Issue (ii): Whether the confiscation and consequential appellate and revisional orders could be sustained without considering that distinction.

Analysis: The original adjudication, the appeal, and the revision all proceeded on the footing that absolute confiscation alone was permissible, without examining the mandatory redemption option under Section 125 for goods of this kind. Since that legal requirement was not applied, the orders could not stand and the matter had to be sent back for fresh decision according to law.

Conclusion: The confiscation and the consequential orders were unsustainable and were set aside with remand for fresh adjudication.

Ratio Decidendi: Where goods are not absolutely prohibited and are liable to confiscation because of the mode of import, Section 125 of the Customs Act, 1962 makes it mandatory to offer redemption on payment of fine in lieu of confiscation.

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