Provisional assessment and redemption fine: interest is unwarranted after duty payment, while confiscation fine must remain reasonable.

Interest under Section 28AB of the Customs Act is not sustainable where duty has been paid before finalisation of a provisional assessment, because there is no delayed payment requiring compensatory interest. Where misdeclaration of description and value attracts confiscability under Section 111(m) and the goods are not available for confiscation, redemption fine may still be imposed under Section 125, but its quantum must remain reasonable on the facts. The text notes that the challenge to duty demand and penalty was not pressed, and the dispute was confined to interest and redemption fine.

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Issues: (i) Whether interest on duty was leviable under Section 28AB of the Customs Act, 1962 when the duty was paid before finalisation of a provisional assessment; (ii) Whether the redemption fine imposed in lieu of confiscation under Section 125 of the Customs Act, 1962 was excessive.

Issue (i): Whether interest on duty was leviable under Section 28AB of the Customs Act, 1962 when the duty was paid before finalisation of a provisional assessment.

Analysis: The duty liability had been discharged by the assessee before finalisation of assessment. In that situation, the levy of interest for delayed payment could not be sustained. The challenge to the duty demand and penalty was not pressed, and the dispute was confined to interest and redemption fine.

Conclusion: Interest under Section 28AB of the Customs Act, 1962 was not leviable and the demand of interest was set aside.

Issue (ii): Whether the redemption fine imposed in lieu of confiscation under Section 125 of the Customs Act, 1962 was excessive.

Analysis: Misdeclaration of description and value stood admitted, attracting confiscability of the goods under Section 111(m) of the Customs Act, 1962. Since the goods were not available for confiscation, redemption fine was warranted. However, the amount fixed by the Commissioner was considered excessive on the facts of the case.

Conclusion: Redemption fine was upheld in principle but reduced to Rs. 10 lakhs.

Final Conclusion: The appeal succeeded only to the extent that interest was deleted and the redemption fine was reduced, while the remaining adjudication was maintained.

Ratio Decidendi: Where duty has been paid before finalisation of a provisional assessment, interest for delayed payment is not sustainable; and where confiscation is attracted but the goods are not available, redemption fine may be imposed, though its quantum must be reasonable on the facts.

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