Per S.S. Kang :

The following issue is referred to the Larger Bench:-

"Whether while passing an order under Section 125 of the Customs Act, the authorities can direct confiscation of goods and payment of fine in lieu of confiscation together with a direction to re-export the goods."

2. The referring Bench noticed the conflict of views expressed in the decisions of the Tribunal in the case of M/s. Goodyear India Ltd. vs. Collector of Customs - Final Order No. A/32/90-NRB dated 27.12.90, Padia Sales Corporations vs. Collector of Customs - 1992 (61) ELT 90, Skantrons (P) Ltd. vs Collector of Customs 1994 (70) ELT 635 and HCL Hewlett Packard Ltd. vs. Collector of Customs - 1997 (92) ELT 367.

3. Heard both the sides.

4. The contention of the appellants is that the adjudicating authority has no jurisdiction to confiscate the goods and impose redemption fine in lieu of confiscation while permitting the importer to re-export the goods. The appellants mainly relied upon the decision of the Hon'ble Supreme Court in Siemens Limited vs Collector of Customs - 1999 (113) ELT 776. The contention of the appellants is that the Hon'ble Supreme Court while allowing re-export of the goods held that redemption fine in lieu of confiscation is not justifiable. In this case, the adjudicating authority confiscated the goods and allowed to redeem the goods on payment of redemption fine of Rs. 6,00,000/- and appropriate duty of customs if the importer desires to avail to keep it in India. The adjudicating authority also gave an option to the importer to re-export the goods within three months and in such case, no duty will be chargeable.

5. The portion whereby the adjudicating authority allowed re-export of the goods without payment of duty was not challenged by the Revenue. The goods were re-exported during the period as extended by the Court. In such a situation, the Hon'ble Supreme Court held that importer is not liable for redemption fine. Hence, the issue before the Hon'ble Supreme Court was different from the issue under consideration.

6. The appellants also relied upon the decision of the Hon'ble Bombay High Court in the case of Pacific International Traders vs. Union of India, reported in 2002 (142) ELT 544, in support of their plea. In this case the importer abandoned the goods and no bill of entry was filed by the importer. In such a situation, the Hon'ble High Court held that the customs department was not justified in detaining the goods abandoned by the exporter and the goods were allowed to be re-exported at the request of the exporter of the goods. The appellants also relied upon the decision of the Madras High Court in the case of Sankar Pandi vs Union of India & Another - 2002 (49) RLT 130. We find that in this case, the importer made a request to re-export the goods and the goods were allowed to re-export on payment of redemption fine. The appellants challenged the order before the Hon'ble Madras High Court. Hon'ble Madras High Court after taking into consideration the facts and circumstances of the case, reduced the penalty and ordered that on payment of penalty, the petitioner is allowed to re-export the goods. We find that this decision also does not advance the case of the appellants on the issue under consideration.

7. The appellants relied upon the following decisions in support of their arguments :

(i) M/s. Padia Sales Corporation vs. Collector of Customs reported in 1992 (61) ELT 90;

(ii) M/s. Sub Gems vs. C.C.E., reported in 2000 (40) RLT 1087 (CEGAT)=2000 (121) ELT 426;

(iii) M/s. G.V. International & Anr. Vs. C.C.E. reported in 2000 (39) RLT 272; and

(iv) Alukkas Exporters vs. C.C.E. reported in 2002 (48) RLT 311.

8. The contention of the Revenue is that the provisions of Section 125 of the Customs Act are independent provisions which empowers the customs authority to impose fine in lieu of confiscation in respect of the importation or exportation of the prohibited goods. The prohibition of importation or exportation of the goods me