2026 (2) TMI 1351 - HC - Customs

Statutory option under Section 125(3) void if redemption fine unpaid within 120 days; re-export refused, fine refunded.

The petition challenged entitlement to re-export and refund after late payment of a redemption fine and penalty where an option to redeem was granted ... R-export of the goods - Refusal to take the possession of the goods, supplier loaded the goods in the custom yard - Option to pay fine in lieu of confiscation - limitation period prescribed under Section 125(3)​​​​​​​ - penalty after the statutory period of 120 days - ignorance of law is no excuse - HELD THAT:- Undoubtedly, the petitioner paid the penalty and redemption fine on 08.01.2024 and 11.07.2024 respectively, which is almost after a period of one year. It is also an admitted fact that the petitioner accepted the said order and did not file an appeal under Section 128 of the Act before the Appellate Authority. Proviso to Section 128(i) of the Act specifically prescribes the limitation period of 60 days and a further period of 30 days for filing an appeal. Thus, a total period of 90 days has been prescribed by the statute for filing an appeal which the petitioner did not avail. In light of the aforementioned facts and the provision of Section 125 of the Act, if the sub-section (3) of Section 125 of the Act is examined, it exposits that where a fine imposed under sub-section (1) of Section 125 of the Act is not paid within a period of 120 days (which the petitioner did not do and paid after one year), from the date of option given thereunder, such option becomes void unless an appeal against such order is pending. This quintessential feature envisaged in Section 125(3) of filing an appeal and pendency of appeal is missing in the present case. The permission to re-export the goods was conditional, and accountability lies on petitioner to pay the redemption fine within a period of 90 days, hence the direction sought by the petitioner for re-export of the goods and implementation of the order dated 28.06.2023 cannot be acceded to. The prime reason for belatedly filing the payment of redemption fine canvassed before us is the ignorance of the provision of Section 125(3) of the Act. A bare perusal of the adjudicating order dated 28.06.2023 reveals that in the proceedings, the petitioners did not appear, however, he requested for waiver of the show cause notice and personal hearing in the matter, during which his statement was recorded on 29.12.2021. It is trite that ignorance of law cannot be an excuse. Thus, the petitioner cannot in wake of the proceedings before the Adjudicating Authority and before this Court, canvass that he was ignorant of the limitation period and provision of Section 125(3) of the Act. The writ petition is dismissed on merits: the option to redeem lapsed because payment was not made within 120 days and no appeal was pending; however, the respondents are directed to refund the redemption fine paid by the petitioner within the period ordered by the Court. Issues: Whether the petitioner, having paid the redemption fine and penalty after the statutory period of 120 days and without a pending appeal, is entitled to re-export the confiscated goods and related directions; and whether the petitioner is entitled to refund of the redemption fine.Analysis: The Adjudicating Authority's order dated 28.06.2023 confiscated the imported goods but expressly granted an option to redeem the confiscated goods for re-export on payment of a specified redemption fine and penalty under Section 125 and Section 112 of the Customs Act, 1962. Section 125(3) provides that the option to pay the fine becomes void if the fine is not paid within 120 days from the date of the option unless an appeal against the order is pending. The petitioner did not file any appeal under Section 128 and paid the redemption fine and penalty only after about one year, well beyond the 120-day period. There is no factual or legal basis to treat the late payment as preserving the statutory option where no appeal was pending, and ignorance of the limitation provision is not a ground to extend or revive the statutory option. The respondents have accepted liability to refund the redemption fine but not the penalty.Conclusion: The petition is dismissed; the petitioner is not entitled to a direction to re-export the goods as the statutory option under Section 125(3) is void for non-payment within 120 days in absence of a pending appeal. The respondent authorities are directed to refund the redemption fine of Rs. 12,00,000 to the petitioner within one week.