Redemption fine fails without confiscable goods, and customs penalty may be reduced when the amount is disproportionate.

Redemption fine cannot be sustained where the goods are not available for confiscation, because the basis for redemption in lieu of confiscation no longer exists; the fine was therefore set aside. A penalty under the Customs Act may also be interfered with where the statutory amount is considered harsh on the facts and circumstances; the penalty was accordingly reduced substantially. The note reflects that confiscation-related relief depends on the availability of goods, and penalty quantum remains subject to factual assessment for proportionality.

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Issues: (i) whether redemption fine could be imposed in lieu of confiscation of goods not available for confiscation; (ii) whether the penalty imposed under Section 114A of the Customs Act required reduction.

Issue (i): whether redemption fine could be imposed in lieu of confiscation of goods not available for confiscation

Analysis: The goods in question were not available for confiscation. In such circumstances, goods cannot be redeemed, and the basis for imposing redemption fine in lieu of confiscation does not survive.

Conclusion: The redemption fine of Rs. 3.30 lakhs was not sustainable and was set aside, in favour of the assessee.

Issue (ii): whether the penalty imposed under Section 114A of the Customs Act required reduction

Analysis: The penalty equal to the duty demanded was considered harsh having regard to the facts and circumstances of the case. The circumstances justified interference with the quantum of penalty.

Conclusion: The penalty was reduced from Rs. 1,33,726/- to Rs. 25,000/-, in favour of the assessee.

Final Conclusion: The order was modified by deleting the redemption fine on unavailable goods and by substantially reducing the penalty.

Ratio Decidendi: Redemption fine cannot be imposed when the goods are not available for confiscation, and penalty under the customs law may be reduced where the statutory amount is found to be harsh on the facts.

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