The main legal point established in the judgment is that redemption fine under Section 125 of the Customs Act cannot be imposed when the goods were not available for confiscation and were cleared without the execution of any bond/undertaking by the assessee.

Rakesh Kumar Garg, J.

1. Brief facts of the appeal are that M/s. Raja Impex (P) Ltd, B-33, Industrial Estate, Ludhiana (hereinafter referred to as the respondent/assessee) filed bill of Entry No. 001546 dated 4-12-2004 for clearance of 500 set of used 15#29; coloured computer monitors (hereinafter referred to as the impugned goods) valued at US$ 5 per piece under sub-heading 84716030 of the 1st Schedule of the Custom Tariff Act, 1975 (hereinafter referred to as #28;CA Act#29;). At the material time the import of the impugned goods was restricted as per Para 2.33 of Foreign Trade Procedure (2002-07) Relevant para is reproduced :-

#29;Import of second hand computer and laptop are restricted for import. The import of refurbished/reconditioned spares will be allowed on production of Chartered Engineer certificate that such spares have a residual life not less than 80% of the life of the original spares.#29;

2. The import under this sub para would be subject to the condition that the goods shall not be used for any commercial purpose, is non transferable and complies with all the terms and conditions of relevant Customs Rules and Regulations.

3. The respondent/assessee vide its letter dated 8-12-2004 stated that they were not manufacturers and they had imported the impugned goods for trading purposes. To ascertain the value of the goods, the department collected data and the CIF value of the similar goods was found to be US$ 15 per piece. Therefore, there was mis- declaration of value and the assessable value of the goods was arrived at Rs. 3,42,769/- and the duty was calculated as Rs. 95,811/-. Since the goods imported were in contravention to para 2.33 of Foreign Trade Procedure (2002-07), the respondents issued show cause notice vide C. No. VIII/CUS/CFS/OWPL/BE/1546/04/565-A dated 31-3-2005 as to why the goods imported in violation of the policy should not be confiscated under Section 111 of the Customs Act, 1962 (hereinafter referred to as the Act) and penalty should not be imposed under Section 112 of the Act.

4. The respondent firm filed the reply to the show cause notice on 5-5-2005. After giving the opportunity of hearing to the respondent firm, the Adjudicating Authority vide order (original) No. 31/JC/CFS/ILDH/06 dated 25- 5-2006 confiscated 500 sets of 15 used coloured monitors for computers valued at Rs. 3,42,769/-. Since the goods were already released, a fine of Rs. 60,000/- in lieu of confiscation along with penalty of Rs. 30,000/- was imposed upon the respondent firm.

5. The assessee filed appeal against the order-in-original with the Commissioner (Appeals) Central Excise Jalandhar, who vide OIA No. 30/CUS/APPL/LDH/2006 dated 28-8-2006 set aside the redemption fine imposed upon the appellant department relying on the judgment of Hon#25;ble Supreme Court in the case of M/s. Weston Components Ltd . . Commissioner of Customs, New Delhi reported in -2000 (115) E.L.T. 278 (S.C.) and reduced penalty from Rs. 30,000/- to Rs. 10,000/-.

6. Aggrieved against the said order, the department preferred appeal before the CESTAT praying for upholding the order dated 28-8-2006, who vide its order dated 25-5-2007 dismissed the appeal of the revenue relying upon the judgment of the Hon#25;ble Supreme Court in the case of M/s. Weston Components Ltd . v. Commissioner of Customs, (supra) and Tribunal in the case of Ramkhazana Electronic v. CC reported in 2003 (156) E.L.T. 122.

7. Still not satisfied with the order of the Tribunal, the department has filed the instant appeal challenging impugned order passed by the appellate authority and the Tribunal.

8. In the present appeal, the department has sought to raise the following substantial questions of law :-

#29;1. Whether redemption fine under Section 125 of the Customs Act, 1962 can be imposed even if goods are neither available for confiscation nor cleared on undertaking/bond? 2 Whether the respondent firm has imported the goods in violation of the provisions of Para 2.33 read w