TaxTMI 
TaxTMI 
2018 (8) TMI 1409
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....e Intelligence (DRI). 2. The investigation revealed violation of EXIM Policy Conditions in selling the vehicle before the period of two years from the date of import. There was also alleged mis-declaration of model, description of the goods and resultant diminution of value on which duty was levied; ie: short-levy of duty. The vehicle was imported as manufactured in May, 1998, while it was actually manufactured in 2.3.2000. The Commissioner issued notice to the importer, broker and two purchasers, and concluded the proceedings as per Annexure-A. A redemption fine of Rs. 6,00,000/- with interest liability of Rs. 10,85,287/- along with differential duty of Rs. 17,92,847/- was levied. On the initial seizure itself, the respondent/owner had obtained release of the vehicle by providing Bank Guarantee for the entire market value of the vehicle, provisional duty bond and indemnity bond. The respondent on conclusion of proceedings paid redemption fine, interest and duty as provided under Section 125 of the Customs Act, 1962 (hereinafter referred to as 'Act', for short). The respondent then challenged the order of the Commissioner before the Tribunal, which set aside the redemption....
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....ustries who, in turn, had received the same from M/s.Integrated Exports, Madras. On a raid conducted by the DRI in the premises of the appellant, it was revealed that there was an investigation by the Customs Department into the import of the hop pellets, which were purchased by the appellant. The appellant on a query made to their supplier; M/s.Integrated Exports, was informed that the consignment was the subject matter of proceedings under Section 111 (d) of the Act and after adjudication by the Department, the goods were redeemed by them on payment of redemption fine. The proceeding initiated against the appellant was contested specifically on the ground of the appellant being a bona fide purchaser and the goods purchased being already subject to confiscation under Section 111 and released on payment of redemption fine under Section 125. The subsequent proceeding, according to the Department, was independent proceeding, finding further undervaluation of the goods, which would enable confiscation under Section 111 of the Act. The Hon'ble Supreme Court found, in para 6 thereof, that "there was an obligation on the adjudicating authority to find out the market value of the good....
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....o the decision in VXL India Ltd. (supra). We refer to the Tribunal's order only to understand the facts therein. As in the present case a person had imported a vehicle showing it to be manufactured in the year 1989, which on investigation was revealed to have been manufactured in the year 1992. By the time proceedings were taken, the importer had sold the vehicle to another, who was proceeded with for violation of the Import Conditions and short levy of duty, for undervaluation of goods. In that case, the Commissioner had not levied any redemption fine and had only levied duty payable. The Tribunal found that if redemption fine had been imposed, by the Commissioner, the appellant would have had to pay it. The reasoning was that mere bona fide intentions cannot absolve the purchaser from liability; on the principle that a purchaser of stolen goods, however innocent, cannot resist taking away of such goods for restoring it to the rightful owner. However, with respect to the short levy of duty, the Tribunal read Section 28 and Clause (2) of Section 125 of the Act to find that both these provisions could not be invoked simultaneously, especially on a person who is not the importer. On ....
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....the goods involved in the import are liable to be confiscated and to save distress on the goods, if the owner, opts to redeem it under Section 25, there is an obligation to pay the duty and fine imposed. 10. In the present case, the redemption fine was imposed at Rs. 6,00,000/- and short levy of duty was collected at Rs. 17,92,847/-. The subsequent bona fide purchaser may not have any liability to duty. However, by confiscation, the State gets the authority to recover the entire market value of the goods, which would definitely be more than the duty. If redemption is not made then the person from whose possession the goods are seized merely looses the property in goods and there could be no further levy of duty on the bona fide purchaser. The Department, despite such confiscation could proceed for recovery of duty too, but only from the importer. 11. Sub-Section (2) of Section 125 reads as follows:- "125 Option to pay fine in lieu of confiscation.- (1) xxx (2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1), the owner of such goods or the person referred to in sub-section (1) shall, in addition, be liable to any duty and charges payable in....