Option to pay fine in lieu of confiscation [Section 125] :
Whenever confiscation of any goods is authorised by this Act, the officer adjudging it
MAY in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and
SHALL in the case of any other goods give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit.
Analysis
Section 125(1) deals with two situations:-
(1) Importation or exportation of prohibited goods and
(2) Importation or exportation of any other goods
(1) Importation or exportation of prohibited goods: In case of importation or exportation of prohibited goods, where the goods were confiscated, the word used is “may”. Hence, in case of prohibited goods, it is at the discretion of the officer to release the confiscated goods.
(2) Importation or exportation of any other goods: In the case of any other goods, which are confiscated, the word used is “shall”. Thus, in case of other goods, the office r is bound to release the goods.
[CCus v. Alfred Menezes 2009 (242) E.L.T. 334 (Bom.)]
| Meaning of redemption fine
On confiscation, goods are vested in the Central Government. Central Government can sell/auction the goods. However, the owner of the goods /the person from whom the goods are seized may be given an option to get the goods back by paying a fine. This fine is known as redemption fine |
Maximum amount of fine: Without prejudice to the provisions of the proviso to sub-section (2) of section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon.
| Maximum amount of redemption fine = MP of the goods confiscated – Duty chargeable |
Liability to pay duty and charges payable on goods does not extinguish: Where any fine in lieu of confiscation of goods is imposed, the owner of such goods or the person referred to in sub-section (1), shall, in addition, be liable to any duty and charges payable in respect of such goods.