Per M.V. Ravindran : These two stay petitions are filed by the appellant directed against the order-in-appeal No. 12/2008 Misc Air (Deptt) dt. 19.2.2008. Since the issue involved in both the applications are identical they are being disposed off by a common order. Since the issue is in a narrow compass the petitions are disposed off and the appeals themselves are taken up for final disposal.

2. The relevant fact that arise for consideration are the appellants herein imported in their baggage "Diana Air Gun S4/T05", the said air guns were declared by the appellants to the authorities. The lower authority ordered for the confiscation of the impugned goods with option to redeem the same on payment of redemption fine and personal penalty and appropriate duty. Appellant herein discharged the duty liability and also paid redemption fine, personal penalty and cleared the said air guns. Revenue took up the matter in appeal to the Ld. Commissioner (Appeals). The Ld. Commissioner (Appeals) while setting aside the orders-in-original held as under:-

"As the appellant have failed to fulfill the conditions laid down in the aforesaid notifications, the impugned goods become 'prohibited goods'. Hence their confiscation is justified. But as the goods have fallen outside the purview of the restricted goods, giving option to redeem the same does not enjoy any legal backing. Hence, the impugned orders are not maintainable. The same are set aside and the appeals are allowed."

(Emphasis Supplied)

3. The Ld. Counsel appearing for the appellants submits that the plain reading of the order of the Ld. Commissioner (Appeal) would indicate that the orders-in-original are set aside only on the ground that option to redeem the prohibited goods does not have legal backing. He draws my attention to the provisions of Section 125 of the Customs Act, 1962 and submits that the adjudicating authority has got legal backing, under these provisions to confiscate the goods to impose redemption fine, and he relies upon the decision of the Tribunal in the case ofGauri Enterprises vs. Commissioner of Customs, Pune 2002 (51) RLT 321 (Tri.Ban.)=2002 (145) ELT 706 (Tri.Bang) and also on the majority decision in the case of Universal Traders vs. Commissioner of Customs (Exports), ACC, Mumbai as reported at 2007 (220) ELT 116 (Tri.Del).

4. The Ld. SDR on the other hand would submit that since the import of air guns are prohibited, the adjudicating authority could not have given the option of clearing the goods on payment of redemption fine. It is the contention that these goods are being to be absolutely confiscated has been imported by the Ld. Commissioner (Appeals).

5. Considered the submissions made by both sides and perused the records. The issue involved in this case is whether the adjudicating authority has the power under the provisions of Customs Act, to offer of redemption fine in lieu of confiscation of prohibited/restricted goods those are confiscated.

6. In order to appreciate the entire issue, the provisions of Section 125 of the Customs Act, 1962 needs to be read, I may read the same:-

"Option to pay fine in lieu of confiscation - (1) Whenever confiscation of any goods is authorized by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods [or, where such owner is not known, the person from whose possession or custody such goods have been seized] an option to pay in lieu of confiscation such fine as the said officer thinks fit"

Provided that, without prejudice to the provisions of the proviso to sub-section (2) of Section 115, such fine shall not exceed the market price of the goods confiscated less in the case of imported goods the duty chargeable thereon.

[2] Where any fine in lieu of confiscation of goods is imposed under sub-section (1), the owner of such good