Section 125 Of Customs Act Allows Owners Of Goods Option To Pay Fine Instead Of Facing Confiscation, Exercisable Within 120 Days: Delhi HC
The Delhi High Court held that under Section 125 of the Customs Act, 1962, the owners of goods are granted a crucial option to pay a fine in lieu of facing confiscation.
The Court allowed a Petition filed by a foreign national from Turkmenistan who was intercepted with USD 18,500.
However, the Court noted the time-sensitive nature of this option, emphasizing that it must be exercised within a strict window of 120 days from the date of the option.
The Court noted that since the seized goods were foreign currency and the Order-in-Original directed the realization of the redemption fine and penalty from the total amount, with the remaining sum to be released, the Petitioner did not need to exercise any further option.
“Ordinarily the Adjudicating Officer needs to give option to the owner of the goods to pay fine in lieu of the confiscation and if such fine is not paid within a period of 120 days, such option will become void. But the goods seized in the present case are nothing else but foreign currency”, the Bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed.
Advocate Pramod Kant Saxena appeared for the Petitioner and Advocate Anushree Narain appeared for the Respondent.
The Writ Petition was filed to enforce the Adjudication Order-in-Original issued by the Additional Commissioner of Customs. The petitioner, a foreign national from Turkmenistan, was intercepted at T-3, IGI Airport, New Delhi, with USD 18,500. Despite failing to provide evidence for legal possession, the seized currency was deposited with the Central Bank of India. After receiving a Show Cause Notice, the Petitioner sought release, attributing the incident to an unintentional oversight. The subsequent adjudication resulted in the confiscation of the currency but allowed redemption on payment of a fine within three months. The Petitioner, through a Power of Attorney, later sought redemption, leading to the Writ Petition.
The Court noted that Section 125 of the Customs Act, grants discretionary powers for imposing a fine instead of confiscation, and stipulates that the option must be exercised by the owner within 120 days.
In this case, the Bench observed that the Adjudicating Officer was expected to provide the option to pay a fine in place of confiscation. However, since the seized goods were foreign currency, the 120-day period did not apply. The Court noted the Order-in-Original was not contested in this writ petition.
Furthermore, the Bench noted that the seized currency was already in the possession of the respondent, and the Order-in-Original explicitly directed the realization of the redemption fine and penalty from the total amount. The remaining sum was to be released to the petitioner. As the petitioner's request for the release of the seized foreign currency was made in response to the notice, it could be considered an exercise of the option. The Order-in-Original, by specifying the process of realizing the fine and penalty, implied that the petitioner had paid on the day of the order.
Consequently, the Court rejected the respondent's contention that the payment was not made, and the option lapsed, was deemed unsustainable.
Accordingly, the Court allowed the petition, directing the respondent to release the remaining amount after realizing the redemption fine and penalty within two weeks from the date of the order.
Cause Title: Oguljeren Hajyyeva v Commissioner Of Customs (2024:DHC:303-DB)
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