Redemption fine cannot be imposed on non-existent goods, and nil freight-related additions cannot be notionally loaded into assessable value.

Redemption fine was held inapplicable where confiscated goods were no longer physically available, because a fine in lieu of confiscation has no practical basis when the goods have already been consumed and cannot be released. Freight, insurance and landing charges were also not added to the FOB value for assessable value purposes, as those components were ascertainable as nil on the facts and could not be notionally loaded into value. The Revenue's challenge therefore failed on both valuation and redemption fine issues, and the adjudication order was sustained.

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Issues: (i) Whether redemption fine was exigible when the goods had been held liable to confiscation but were not physically available; (ii) Whether freight, insurance and landing charges were required to be added to the FOB value while determining the assessable value of ATF.

Issue (i): Whether redemption fine was exigible when the goods had been held liable to confiscation but were not physically available.

Analysis: Confiscation under the Customs Act vests the goods in the Central Government, and redemption fine under the statutory scheme is an option in lieu of confiscation. Where the goods have already been consumed and are no longer available, confiscation is only notional and there is no practical basis for directing payment of redemption fine in exchange for release of non-existent goods. The authorities relied upon by the Revenue did not assist it, as they dealt with different factual situations involving penalty or goods provisionally released against bond.

Conclusion: Redemption fine was not exigible in the facts of the case and the finding of no fine was upheld.

Issue (ii): Whether freight, insurance and landing charges were required to be added to the FOB value while determining the assessable value of ATF.

Analysis: Customs duty is payable on the landed value of imported goods, and ordinarily freight, insurance and landing charges may be added where such components are not otherwise ascertainable. Here, however, the ATF remained in the aircraft fuel tank, no separate freight or transit insurance was incurred, and landing charges were also not separately incurred for the fuel. Since these components were ascertainable as nil, they could not be notionally loaded into the assessable value. The issue was also covered by earlier decisions in the respondent's own case.

Conclusion: Freight, insurance and landing charges were not required to be added to the FOB value and the demand enhancement was rejected.

Final Conclusion: The Revenue's challenge failed on both issues, and the adjudication order was sustained in full.

Ratio Decidendi: Redemption fine cannot be imposed where confiscated goods are not physically available for release, and notional additions to value cannot be made for freight, insurance or landing charges when those components are ascertainable as nil.

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