COMMISSIONER OF CUSTOMS Vs. R K INTERNATIONAL

JUDGEMENT

(1.) The question of law framed in this case is as follows:

(2.) The brief facts of the case are that in an alleged violation of the law, imported computer components (i.e. memory cards, RAMs etc.) valued at Rs. 28,29,550/- were seized from the respondent on 01.06.2007. Pursuant thereto the statement of one Raj Kumar Ahuja was recorded who has conceded to the purchase of the articles from overseas visitors. Show cause notice under Section 124 proposing confiscation of goods was issued. The final order confirmed the show cause notice and confiscated goods, with an option to redeem the goods, provided a fine of Rs. 5 lakh was paid. The amount of Rs. 4 lakh was paid. Additional penalty of Rs. 1 lakh was imposed on M/s. R.K. International. The amounts deposited by the party were appropriated. Claiming to be aggrieved, the Revenue appealed to CESTAT alleging that duty was recovered and that this obligation was implicit in section 125. The Revenue relied upon the judgment of the Supreme Court in Commissioner of Customs v. Jagdish Cancer and Research Centre, (2001) 132 ELT 257 (S.C.), especially the observations that an order confiscating the goods would provide an option to pay the redemption fee and in the event he exercises it, the Assessee/Importer has to pay duty and charges [in accordance with Section 125(2)]. The Tribunal relied upon a previous judgment of the Supreme Court in Mohan Meakins Ltd. v. Commissioner, (2000) 115 ELT 3 (S.C.), which stated that the Adjudicating Officer is under a duty to firstly assess the market value of the goods and then levy the duty and charges apart from the redemption fine which he intends to levy under Section 125(1). The Tribunal rejected the appeal with the following reasoning:

(3.) Mr. Amit Bansal, counsel for Revenue urges that the Tribunal fell into error in glossing over Section 125(2), which is couched in mandatory terms. It is submitted that every show cause notice carries with it an implied condition that if the option of redeeming the goods proposed to be confiscated is given to the importer/noticee, the latter has to pay the relevant duties. He reiterated this position by relying upon Jagdish Cancer and Research Centre . The provision relied upon, i.e. Section 125(2), no doubt, is in mandatory terms and suggests that when the duty is payable by the concerned party or importer, the quantum of the duty even on a tentative basis should necessarily be spelt out in the show cause notice, which is essential under Section 124 of the Act. The facts in Jagdish Cancer and Research Centre itself show that the show cause notice under Section 125 had proposed customs duties (Rs. 64,93,598/-) and had invoked Section 111(O) and also proposed penalty under Section 112.