Legal principle

Section 125(1) of the Customs Act, 1962, employing the word 'may', confers a discretion rather than an absolute or vested right to redemption of confiscated goods—especially prohibited goods—and Article 226 cannot be used to bypass statutory appellate remedies lost by a litigant's own delay in fiscal matters.

Court decision

The Delhi High Court dismissed the writ petition with no order as to costs, holding that Section 125(1) confers a discretion—not an absolute or vested right—to allow redemption (particularly for prohibited goods), that the Order-in-Original contained detailed reasons with no perversity, jurisdictional error or natural-justice violation, and that the petitioner's delay and conduct disentitled it to any relief under Article 226.

Facts

M/s Bhagwan Corporation, a proprietorship importer of boiled betel nuts from Indonesia, filed two Bills of Entry at ICD Patparganj in October–December 2020 declaring the goods under CTH 2106 90 30 (total assessable value ₹1,13,17,725). CRCL test reports found the samples to be whole areca nuts failing the moisture standard, and a Risk Management Centre report flagged widespread misclassification of areca nuts to circumvent Minimum Import Price (MIP) conditions. The Additional Commissioner, by Order-in-Original dated 24.09.2021, reclassified the goods under CTH 0802 80 10, absolutely confiscated them under Sections 111(d) and 111(m) without any Section 125 redemption option, and imposed a ₹30,00,000 penalty under Section 112(a)(i). The petitioner's appeal was dismissed solely on limitation (a 156-day delay) by Order-in-Appeal dated 17.01.2024, after which it filed the present writ petition confined to the denial of the redemption option.

Key provisions

• Section 125, Customs Act, 1962 — Option to pay fine in lieu of confiscation
• Section 112(a)(i), Customs Act, 1962 — Penalty for improper importation of goods
• Section 111(m), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 3(2), The Foreign Trade (Development and Regulation) Act, 1992 — Powers to make provisions relating to imports and exports.
• Section 128, Customs Act, 1962 — Appeal to Commissioner (Appeals)
• Section 11, Customs Act, 1962 — Power to prohibit importation or exportation of goods
• Section 49, Customs Act, 1962 — Storage of imported goods in warehouse pending clearance or removal
• Section 6(3), The Foreign Trade (Development and Regulation) Act, 1992 — Appointment of Director General and his functions.
• Section 153(3), Customs Act, 1962 —  Modes for service of notice order etc
• Section 122A, Customs Act, 1962 — Adjudication Procedure
• Section 46, Customs Act, 1962 — Entry of goods on importation