The New Delhi bench of the Central Excise, Customs and Service Tax Appellate Tribunal (CESTAT) has held that the confiscating officer, under section 125 of the Customs Act, 1962 has the absolute discretion to either impose fine in lieu of confiscation or to order the absolute confiscation.
The appellant is an importer who had imported the cosmetic products through its CHA firm M/s. R.P. Cargo Handling Services at the declared value of Rs.2288502.77. the adjudicating authority, however, rejected the said value and accepted the re-determined assessable value of Rs.25,45,129/- and the goods were ordered to be confiscated. However, the option was given to the importer to redeem the goods but those having clearance value of Rs.2455289.94 on the payment of redemption fine of Rs. one lakh. However, the goods having a value of Rs.89829/- were ordered for absolute confiscation on the ground that they were not declared in the CDSCO Registration Certificate. The appellant challenged the said order before the authorities and the Tribunal.
Judicial Member Ms. Rachna Gupta, while considering the technicality attached to the CDSCO Certificates, i.e., the certificate being issued by Central Drugs Standard Control Organization observed that all cosmetic products that are imported for sale in India need to be registered with the Licensing Authority, as is defined under Rule 21 of Drugs and Cosmetic Act which regulate the import of cosmetic to ensure safety, quality and performance.
“For this purpose that the CDSCO Certificates are issued by the afore-mentioned organization in terms of the provisions of Cosmetic Rules, 1945, which stands amended with Cosmetic Rules, 2020. The certificate is issued by the Central Licensing Authority for registration of cosmetics manufactured for import into India and use in India. This particular perusal makes it abundantly clear that the goods which are not mentioned in CDSCO Certificate are the restricted goods,” the Tribunal said.
Upholding the order of the adjudicating authority, the Tribunal held that “No doubt section 125 of the Customs Act gives the importer an option to pay fine in lieu of confiscation but the word used in the provision is “may’, hence, the intention of the statute is apparently clear that the discretion lies with the Confiscating Officer to either impose fine in lieu of confiscation or to order the absolute confiscation.”
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