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Therefore, in the words of Hon’ble Supreme Court in Jagdish Cancer &
Research Center v. Commissioner of Customs [2001 (132) E.L.T. 257 (S.C.).],
“where an order is passed for payment of customs duty along with an order of
imposition of fine in lieu of confiscation of goods, it shall only be referable to
sub-section (2) of Section 125 of the Customs Act, 1962. It would not attract
Section 28(1) of the Customs Act which covers cases of duty not levied, short
levied or erroneously refunded etc.”
Here, for imported goods, it must be noted that under Section 125 of the
Customs Act, 1962, duty does not become payable on payment of fine in
lieu of confiscation, but, has to be paid only before seeking an order for
clearance of goods [Commissioner of Customs (IMC), ACC, Sahar v. Wock-
harft Hospital & Heart Inst., 2006 (200) E.L.T. 15 at pp. 27-28 (Bom.)].
(6) Order of Confiscation could be passed even if the confiscable goods
had left the country [M.G. Abrol v. M/s. Shantilal Chhotalal & Co. -
1966 SCR (1) 284]. However, from the decisions in the undernoted
cases [Chinku Exports v. CC., Calcutta, 1999 (112) E.L.T. 400 (Tribu-
nal), Prudential Pharmaceuticals Ltd. v. CC, Chennai, 2001 (136) E.L.T.
1057 (Tri.-Chennai), Shiwalaya Spinning & Weaving Mills (P) Ltd.,
2002 (146) E.L.T. 610] the position which emerges (with respect to
redemption fine) is that redemption fine cannot be imposed on
goods which are not available for confiscation.
(7) Section 125 of the Customs Act, 1962, is equally applicable to the
goods to be exported as well as goods to be imported. Therefore, it
cannot be claimed that once permission is given as to the re-export
of the imported goods liable for confiscation, redemption fine can-
not be asked on such imported goods. The position on this issue has
been resolved by the Hon’ble CESTAT in A.K. Jewellers v. Commis-
sioner of Customs, Mumbai [2003 (155) E.L.T. 585 at pp.587-588 (Tri.-
Mum)], wherein Hon’ble Tribunal held that -
“when an adjudicating authority after ordering confiscation of im-
ported goods permits their re-export, he is in effect first ordering
redemption of goods on payment of fine and thereafter permitting
them to be re-exported. Each of these two actions is independent
and is permitted by law. An order whereby both are combined,
therefore, is not contrary to law”.
Section 130 of the CGST
Relevant provisions of Section 130 of the CGST which deals with option
to pay fine in lieu of confiscation have been reproduced below :
“Section 130 - Confiscation of Goods or Conveyance and Levy of Penalty.
(2) Whenever confiscation of any goods or conveyance is authorised by this
Act, the officer adjudging it shall give to the owner of the goods an option to
pay in lieu of confiscation, such fine as the said officer thinks fit :
Provided that such fine leviable shall not exceed the market value of the
goods confiscated, less the tax chargeable thereon :
Provided further that the aggregate of such fine and penalty leviable shall not
be less than the amount of penalty leviable under sub-section (1) of Section
129 :

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