The option to pay a fine in lieu of confiscation under Section 125 of the Customs Act, 1962, must be offered to the owner of the goods before ordering confiscation.

The petitioner is aggrieved by the order of the first respondent dated 28th October 1981 in and by which he has confirmed an order of confiscation of cloves valued at Rs. 47, 000 for violation of Section 111(d) of the Customs Act, 1962 (hereinafter called the 'Act'), and also levy of personal penalty of Rs. 2500 under Section 112 of the Act.

2.Brief facts relating to this writ petition may now be noted. On 7th May 1973, the officers of the Central Excise department raided the premises bearing Nos. 104 and 126 South street, Madras 23, and seized 245 kgs. and 249 kgs. of cloves belonging to the petitioner on entertaining a reasonable belief that the said cloves have been illegally imported into India. For the show cause notice dated 7th August 1973 issued to the petitioner, a reply was sent on 18th October 1973, stating that the cloves were purchased from one Kusal Ray who in turn purchased the same in the auction held by the Central Excise department at Nagapattinam under Customs Receipt No. 90, dated 20th July 1964. In the same reply, it was further stated that the statement already given by the petitioner at the time of inspection should not be relied upon as it was taken under threat and coercion and, therefore, not voluntary. The petitioner, in the reply notice took a stand that the department has to discharge the burden by adducing evidence by discovering the origin of the cloves, time, mode and manner of smuggling. The petitioner further denied certain factual aspects such as the cloves seized in bags contained moisture and sea-sand particles sticking on them. The petitioner was given a personal hearing through counsel. The Deputy Collector of Central Excise, was not prepared to accept the contentions raised on behalf of the petitioner in the reply to the show cause notice as well as the arguments raised at the time of personal hearing. Consequently, by order dated 23rd December 1974, the Deputy Collector of Central Excise ordered confiscation of 474 kgs. of cloves and imposed a personal penalty of Rs. 5, 000/-. Aggrieved by the order of the Deputy Collector, an appeal was preferred to the Appellate Collector of Customs who by order dated 3rd April 1980, confirmed the order of confiscation and reduced the personal penalty to Rs. 2, 500/-and in other respects rejected the appeal. A further revision to the first respondent also was not successful. Hence the present writ petition.

3.Mr. Madanchand Chopda, learned counsel for the petitioner, placing reliance on a judgment of Nainar Sundaram J. reported inAbunackerv. Secretary, Government of India, 1981-2-MLJ 405 submitted that the impugned order cannot be sustained in law. According to the learned counsel, in addition to the confiscation and levy of personal penalty, the department prosecuted the petitioner in criminal court and the petitioner was acquitted on merits by the Criminal Court. The order of acquittal was further confirmed on appeal by the Department by this Court in Cr. Ap 860 of 1978. The learned counsel relied on the finding given by this Court in the said criminal appeal to the effect that 'There isprima facieevidence that the cloves were purchased from the auction purchaser in an open auction. In the light of the acquittal on the same facts, the order of confiscation and levy of personal penalty cannot be sustained as held by this Court in the judgment reported in 1981-2-MLJ 405 (cited supra), is the contention of the learned counsel for the petitioner. He also contended that the petitioner was not given a fair and full opportunity to defend the case. In any event, according to the learned counsel for the petitioner, the option to pay fine in lieu of confiscation which is available under Section 125 of the Act was not offered to the petitioner and, therefore, the order is vitiated on that ground.

4.Mr. T. Somasundaram, learned counsel appearing for the respondents, fairly submitted that it is true that the judgment of Nainar Sundaram J. clearly suppor