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2006 (4) TMI 137 - HC - CustomsDemand of duty on confiscated goods - Option to redeem the goods in lieu of confiscation - Scope of Section 125 - import of medical equipment - Notification No. 64/88-cus - Breach of condition of Notification - Confiscation of goods - Imposition of penalty - Whether redemption of confiscated Goods by the Importer is a pre-requisite to payment of Demand Duty, when equipments are imported without payment of Customs duty ? - HELD THAT:- It is well established in law that the taxing statutes have to be construed strictly and unless the literal meaning leads to anomaly or absurdity, the golden rule of literal interpretation should be adhered to. Literal meaning of Section 125(2) is that, whenever the goods liable to be confiscated under the Customs Act are allowed to be redeemed by giving an option to pay fine in lieu of confiscation imposed u/s 125(1), the owner of such goods or the person referred to in Section 125(1) shall, in addition to the fine be liable to any duty and charges payable in respect of such goods. Under the provisions of the Customs Act, the imported goods are not allowed clearance for home consumption unless the duties of customs as assessed and other charges payable under the Act are paid. Thus, the duties of customs leviable on importation gets crystalised on assessment and has to be paid before seeking an order for clearance of the goods. Where the imported goods are confiscated before an order for clearance is made with an option to redeem the goods on payment of fine in lieu of confiscation, then the duty on such goods does not become payable on imposition of fine in lieu of confiscation but has to be paid before seeking clearance of the goods. In such a case if the clearance of the goods is not sought for, the question of paying duty does not arise at all. As stated earlier, in respect of the goods confiscated u/s 111(o) with an option to pay fine in lieu of confiscation the duty becomes payable on passing an order u/s 125(1). In such a case, whether the option is exercised or not is wholly irrelevant. Admittedly, the only issue canvassed before the Tribunal was regarding duty liability u/s 125(2) and, therefore, the question of remanding the matter for deciding the other issues raised in the appeal before the Tribunal does not arise. Thus, we are of the opinion that the Tribunal was in error in holding that the liability to pay duty on the goods confiscated u/s 111(o) with option to pay fine in lieu of confiscation imposed u/s 125(1) arises only if the owner exercises an option of redeeming the goods. In our opinion, where the goods are confiscated u/s 111(o) with an option to redeem the goods on payment of fine in lieu of confiscation imposed u/s 125(1), the revenue is entitled to recover the duty payable on such goods on passing an order u/s 125(1) and it is wholly irrelevant as to whether the owner has exercised the option to redeem the goods or not. The substantial questions of law raised in these appeals are answered accordingly. In the result, both the appeals succeed. The impugned orders passed by the Tribunal are quashed and set aside.
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