HEMANT BHAI R. PATEL Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) The West Regional Bench at Bombay before whom the above appeals by importers came up for hearing sought to refer two issues for decision of the Larger Bench. The issues are as follows: -

(2.) The reference was occasioned in view of the difference of opinion between Benches regarding the power of the adjudicating authority to impose redemption fine and penalty when re -export is permitted. The Bench before which the matter came up for hearing was not inclined to agree with view that when re -export is permitted no redemption fine and penalty can be imposed by the adjudicating authority. We make it clear that we are considering a situation where the goods imported are liable to be confiscated under Section 111 of the Customs Act and where the adjudicating authority is empowered to pass an order under Section 125 of the Customs Act to impose payment of a fine in lieu of confiscation and also penalty. It is relevant to note that the contention raised by the appellant that when re -export is permitted no redemption fine can be imposed is not based on the interpretation of any provision of statutory law or any specific legal principle. The source of the argument is from the view taken in certain decided cases.

(3.) The first reported decision relied upon by the learned Counsel for the appellant in support of his contention that no redemption fine can be imposed when the goods were permitted to be re -exported is that of a learned Single Member in Padia Sales Corporation v. Collector of Customs,1992 (61) E.L.T. 90 (T). On a reading of the above decision we find that after observing that the adjudicating authority has no power to impose redemption fine while permitting re -export of the goods, the Tribunal modified the order of the Additional Collector holding that "the goods are confiscated, but the appellants are entitled to redeem the same on payment of Rs. 35,000/ -". In the original order the adjudicating authority permitted the importer to re -export the goods on payment of redemption fine of Rs. 35,000/ -. So ultimately, the effect of the order of the Tribunal was to delete permission given to the importer to re -export the goods. In Skantrons (P) Ltd. v. Collector of Customs, New Delhi, 1994 (70) E.L.T. 635 (T) it was held that imposition of redemption fine on confiscation of goods under Section 111(d) while giving option to reexport of the goods is not correct in law. It was observed that importer is entitled to import the goods and consume the same within the country on payment of redemption fine. Therefore, the simultaneous imposition of two conditions namely (i) imposition of fine in lieu of confiscation and (ii) directing re -export, cannot co -exist. The appellant was found entitled to refund of redemption fine paid if the goods had already been re -exported.