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2015 (4) TMI 348 - SC - CustomsDemand of duty on confiscated goods - option to redeem the goods in lieu of confiscation - Scope of Sections 124 and 125 - import of medical equipment - Notification No. 64/88-cus dated 01.03.1988 - Breach of condition of Notification - Confiscation of goods - Imposition of penalty - Held that:- It is not in dispute that Show Cause Notice in the instant case was issued under Section 124 of the Act. - Nothing was stated about the payment of duty. However, in spite of the fact that Show Cause Notice was limited to confiscation of the goods and imposition of penalty, the final order which was passed included the direction to pay the customs duty as well. It is clear that when such an action was not contemplated, which even otherwise could not be done while exercising the powers under Section 124 of the Act, in the final order there could not have been direction to pay the duty. Notwithstanding the aforesaid position, as pointed out above, the Department is taking shelter under the provisions of sub-section (2) of Section 125 of the Act. However, on a plain reading of the said provision, we are of the view that such a provision would not apply in case where option to pay fine in lieu of confiscation is not exercised by the importer. Trigger point is the exercise of a positive option to pay the fine and redeem the confiscated goods. What is emphasised is that when in the Show Cause Notice issued under Section 124, nothing was stated about the payment of import duty, there could not have been direction to that effect in the final order Further, insofar as Section 125(2) is concerned, the contingency contained therein did not occur in the present procedure for want of exercise of option to pay fine. We, thus, are of the opinion that the view taken by the CESTAT is correct and the contrary view taken by the High Court in the impugned judgment [2006 (4) TMI 137 - HIGH COURT OF JUDICATURE AT BOMBAY] is not warranted on the interpretation of Section 125(2) of the Act. Argument raised in case [2001 (8) TMI 113 - SUPREME COURT OF INDIA] predicated on Section 28(1) of the Customs Act and plea was that notice was not issued by the “competent officer” and was also beyond the time prescribed under Section 28(1). In that context, the Court dealt with the provisions of Section 125(1) as well as 125(2) and observed that order of payment of duty under Section 125(2) would be an integral part of the proceedings relating to confiscation and consequential orders thereon. This order, however, must be pursuant to a show cause notice and adjudication. The court was not dealing with the question as to whether sub-section (2) of Section 125 would be applicable even when option to pay fine in lieu of confiscation is not exercised. - Decided in favour of assessee.
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