TMI Blog2006 (6) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... ided that, where the goods are confiscated with an option to redeem the goods by imposing fine in lieu of confiscation, then on imposition of fine in lieu of confiscation the duty and charges payable have to be paid by the owner of such goods. Thus, we do not find any merit in the argument of the petitioner that the judgment delivered in the case of Wockhardt Hospital needs reconsideration. Since the issues raised in this appeal are squarely covered by the judgment delivered in the case of Wockhardt Hospital (Customs Appeal No. 22 of 2004) [ 2006 (4) TMI 137 - BOMBAY HIGH COURT] , we answer the questions raised in this appeal by holding that in the facts and circumstances of the customs authorities are justified in seeking to recover duty f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pments ) valued at Rs. 8,24,78,366/- and the customs duty payable thereon was Rs. 11,52,06,608/-. However, the assessee obtained clearance of the hospital equipments without payment of duty by availing benefit of exemption Notification No. 64/88 Cus. dated 1st March, 1988. Under the said exemption notification issued by the Central Government, the hospital equipments were exempt from payment of customs duty if the import was approved by the Government of India in the Ministry of Health Family Welfare or by the Directorate General of Health Services to the Government of India and the said notification further stipulated that the hospital equipments cleared under the said notification without payment of duty shall be used for treatment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT by its order dated 1st July, 2003 referred the matter to the President for constituting a Larger Bench. Thereafter, a Larger Bench, of CESTAT heard the matter and by its judgment and order dated 8th April, 2005 directed that the matter be placed before the President to constitute a five member Bench. Accordingly, the matter was heard by a five member Bench constituted by the President of the CESTAT. By its decision dated 3rd October, 2005 [2005 (188) E.L.T. 374 (Tri.-LB), the five member Bench of CESTAT held that when post importation conditions in an exemption notification are not fulfilled, the department has the power to recover the escaped duty in terms of Section 12 of the Customs Act, 1962. Challenging the aforesaid decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id in addition to the fine in lieu of confiscation. According to Mr. Bharucha this literal interpretation of Section 125(2) has not been followed in the case of Wockhardt Hospital and, therefore, the decision in that case needs reconsideration. Lastly Mr. Bharucha submitted that the findings recorded in paras 41 and 43 of the judgment in the case of Wockhardt Hospital are mutually contradictory. In para 41 of the said judgment, it is stated that the duty payable on the confiscated goods has to be paid on imposition of fine in lieu of confiscation and it is immaterial whether such option is exercised or not . However, in para 43 of the said judgment it is stated that where the imported goods are confiscated before an order for clearance is m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in lieu of confiscation. Accordingly, on proper construction of the statute, we have held in the case of Wockhardt Hospital that where the confiscated goods are allowed to be redeemed, then on imposition of fine in lieu of confiscation under Section 125(1), the duty and charges payable on such goods have to be paid under Section 125(2), irrespective of the payment of fine in lieu of confiscation. 9. In the case of Wockhardt Hospital it was argued that the above literal interpretation of Section 125(2) would result in absurd situation. While rejecting the above argument, we have noted in para 43 of the judgment in the case of Wockhardt Hospital that the word payable in Section 125(2) avoids any such absurd situation. The word payable in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Act. In such cases, the duty on the confiscated goods become payable only when clearance of the confiscated goods is sought by exercising the option given under Section 125(1). Therefore, the legislature has appropriately used the word payable in Section 125(2) so that the duty which becomes due and payable on confiscation, has to be paid on imposition of fine in lieu of confiscation and in all other cases duty and charges have to be paid as and when they become due and payable. 11. As in the case of Wockhardt Hospital in the present case also the goods were cleared for home consumption under Section 47 of the Customs Act without payment of duty subject to fulfilment of the conditions set out in the exemption notification. As in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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