Customs duty on confiscated goods is not payable where redemption is not exercised and the goods remain under confiscation.

Goods confiscated under the Customs Act vest in the Government under section 126, and where the importer does not seek redemption, neither redemption fine nor duty arises in respect of those goods. Duty is payable only if the goods are not available and have entered consumption, or if they are not confiscated at all; mere failure to satisfy an exemption notification condition does not change that position. The duty demand was therefore not sustainable.

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Issues: Whether duty could be demanded on goods confiscated under the Customs Act, 1962 when the importer did not seek redemption and the exemption notification condition was not fulfilled.

Analysis: On confiscation, the goods vest in the Government under Section 126 of the Customs Act, 1962, and the officer takes charge of them. Where redemption is not exercised, neither redemption fine nor duty arises in respect of such goods. Duty becomes payable only where the goods are not available and have gone into consumption, or where the goods are not confiscated at all. Mere non-compliance with the exemption notification does not alter this statutory position.

Conclusion: The demand for duty was not sustainable and the Revenue's reference failed.

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