VipIn Enterprises Vs. Commissioner of Customs, Kandla

1. in the impugned order, the commissioner has directed payment of duty in accordance with the value he has determined of the imported goods, imposed a penalty of rs. 40 lakhs under section 112 of the act "as an alternative for fine in lieu of confiscation of goods" which he holds liable to confiscation under clause (m) of section 111 of the act, which had already been released, and another penalty of rs. 5 lakhs under section 112 on the importer.2. the contention of the counsel for the appellant that sum of rs. 10 lakhs has been recovered (rs. 5 lakhs by adjustment to bank guarantee by the importer, rs. 5 lakhs deposited by the importer) is not disputed. the penalty of 5 lakhs specifically imposed on the importer has already been paid. we are not abe to understand the legal basis for penalty as a substitute for fine in lieu of confiscation, which is what rs. 40 lakhs appears to be. the question of fixing redemption fine would arise if the goods have been ordered to be confiscated by virtue of provisions of section 125 of the act. penalty on the importer or any other person is imposable in terms of section 112 of the act irrespective of whether the goods are available for confiscation or not. we are however of the prima facie view that such penalty is not a substitute for redemption fine which is provided in section 125 of the act. the commissioner himself is clear that he has specifically imposed this penalty "in lieu of confiscation"; it is also further clear from the fact that he has imposed separate penalty on the importer. his action in trying to substitute penalty for redemption fine is prima facie unacceptable in law.3. accordingly, we waive deposit of the remained of this penalty and stay its recovery.