Prohibited imports and customs penalty discretion upheld, with absolute confiscation sustained and no redemption on fine allowed.

Imported prohibited goods attract mandatory customs consequences: the penalty framework under the Customs Act could not be reduced below the prescribed minimum where the imposed penalty was already within the statutory range. The adjudicating authority therefore had no legal basis to reduce the personal penalty. Absolute confiscation of the watches was also sustained because confiscation of prohibited goods remained a matter of discretion under the Act, and no impropriety in that discretion was shown. The result was that neither reduction of penalty nor conversion of confiscation into redemption on fine was warranted, and the adjudication order was left undisturbed.

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Issues: (i) whether the personal penalty of Rs. 10,000 levied on the appellant was liable to be reduced; and (ii) whether the absolute confiscation of the imported watches was liable to be converted into redemption on payment of a fine.

Issue (i): whether the personal penalty of Rs. 10,000 levied on the appellant was liable to be reduced.

Analysis: The imported watches were prohibited goods under Section 2(33) of the Customs Act, 1962, and the import attracted violation of Section 111(d) of the Customs Act, 1962. Under Section 112(1) of the Customs Act, 1962, the penalty prescribed was not discretionary up to five times the value of the goods, but was fixed at a level up to five times the value or one thousand rupees, whichever was greater. As the value of the goods was Rs. 15,100 and the penalty imposed was only Rs. 10,000, there was no legal basis for reduction.

Conclusion: The reduction of penalty was not warranted and the levy was upheld against the appellant.

Issue (ii): whether the absolute confiscation of the imported watches was liable to be converted into redemption on payment of a fine.

Analysis: Under Section 125 of the Customs Act, 1962, absolute confiscation of prohibited goods was a matter within the adjudicating officer's discretion. On the facts, the exercise of that discretion was not shown to be improper, particularly when the appellant had already been visited with a penalty below the statutory maximum.

Conclusion: The order of absolute confiscation was upheld and no redemption on fine was allowed.

Final Conclusion: The appeal failed on both the penalty and confiscation issues, and the adjudication order was left undisturbed.

Ratio Decidendi: Where imported goods are prohibited goods, the statutory penalty framework under Section 112(1) is mandatory in the sense that the adjudicating authority cannot reduce it below the prescribed minimum, and confiscation under Section 125 may be maintained in the discretion of the authority absent any perversity in its exercise.

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