Customs Act, 1962 › Chapter XIV — Confiscation of goods and conveyances and imposition of penalties

Section 125. Option to pay fine in lieu of confiscation

Customs Act, 1962

Bare Act

Option to pay fine in lieu of confiscation. —

(1) Whenever confiscation of any goods is authorised 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 where the proceedings are deemed to be concluded under the proviso to sub-section (2) of section 28 or under clause (i) of sub-section (6) of that section in respect of the goods which are not prohibited or restricted, no such fine shall be imposed:

Provided further 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 goods or the person referred to in sub-section (1), shall, in addition, be liable to any duty and charges payable in respect of such goods.

(3) Where the fine imposed under sub-section (1) is not paid within a period of one hundred and twenty days from the date of option given thereunder, such option shall become void, unless an appeal against such order is pending.

Explanation.-For removal of doubts, it is hereby declared that in cases where an order under sub-section (1) has been passed before the date[Omitted]on which the Finance Bill, 2018 receives the assent of the President and no appeal is pending against such order as on that date, the option under said sub-section may be exercised within a period of one hundred and twenty days from the date on which such assent is received.

Judgments on Section 125

Mobis India Module Pvt Ltd vs Commissioner Of Customs -Ii Chennai — CESTAT, 9 Oct 2026. An electric steering lock assembly, whose only function is anti-theft immobilisation of the steering wheel after the vehicle has stopped, is not a part of a steering wheel, steering column or steering box under CTH 8708…
Vishal Oil And Lubricants Co vs The Commissioner Of Customs (Import) — Delhi High Court, 28 Sep 2026. Interest on a duty liability arising from confiscation and redemption under Section 125 can run only from the date that liability is determined in adjudication, not from the date of the original assessment of the Bill…
M/S Ascent Circuits Pvt Ltd vs Bangalore Customs — CESTAT, 4 Sep 2026. Goods that are merely 'restricted' (not prohibited) under the Foreign Trade Policy cannot be absolutely confiscated absent specific recorded reasons, since Section 125 confers a discretion to allow redemption on fine…
Smt.Geetha vs The Union Of India — Madras High Court, 23 Jul 2026. Redemption of confiscated goods under Section 125 of the Customs Act is a discretionary relief and not a matter of right, and goods imported in breach of statutory restrictions (here, Baggage Rules, 2016 conditions on…
S.Thiyagarajan vs Assistant Commissioner Of Customs… — Madras High Court, 16 Jun 2026. Where redemption of seized goods is allowed under Section 125 and the department has disposed of the goods without notice in breach of Section 110(1A) and the 14.02.2006 circular, it must pay the owner the value of the…
M/S. A.P.P. Enterprises vs The Commissioner Of Customs — Madras High Court, 29 Apr 2026. Consistent miscoding of export scheme codes and use of parallel invoices across numerous consignments amounts to wilful suppression within Section 28(4) — not a bonafide clerical mistake — and a DRI clean chit cannot…
Commissioner Of Customs -Commissioner… vs Home Designers And Fabricators Pvt Ltd — CESTAT, 26 Mar 2026. Where imported goods violate import policy or regulatory conditions but are not absolutely prohibited, confiscation under Section 111(d) may be upheld, but absolute confiscation is unsustainable and the adjudicating…
Hitesh Miglani vs Union Of India & Ors — Delhi High Court, 23 Mar 2026. Where seized goods are not 'prohibited goods' under Section 2(33) of the Customs Act, grant of the redemption option under Section 125(1) is obligatory and not discretionary, and a later notification restricting imports…
Mahesh Agarwal Partner vs Cc Sea Ch - Ii — CESTAT, 13 Mar 2026. Where higher-value parallel documents are recovered from the importer's own possession and corroborated by voluntary Section 108 admissions and extra-commercial payments, declared transaction value may be rejected, the…
Mukesh Kumar vs Commissioner Of Customs (Ii), Chennai — CESTAT, 17 Feb 2026. Penalties under sections 112(b) and 114AA of the Customs Act can be imposed only where mens rea or active involvement is established, and retracted statements recorded u/s 108 cannot sustain duty demands unless tested…
Cochin-Cce vs Maliakkal Industral Enterprises — CESTAT, 5 Dec 2025. Goods provisionally cleared on a bond under Section 18 of the Customs Act pursuant to High Court directions, with the prescribed end-use condition complied with, cannot attract confiscation under Section 111(d), penalty…
M/S Xiaomi Technology India Private… vs Commissioner Of Customs Air… — CESTAT, 14 Nov 2025. Royalty and licence fee paid by an importer under agreements with IPR holders, not disclosed to the customs authorities, is includible in the assessable value under Rule 10(1)(c) of the Customs Valuation Rules, 2007,…
Isgec Heavy Engineering Ltd vs Commissioner, Customs (Export)-New… — CESTAT, 16 Oct 2025. The FOB/transaction value of exported goods cannot be modified by any customs officer; re-determination under the Valuation Rules only fixes the assessable value, and drawback payable as a percentage of FOB must be…
A. R. Sulphonates Private Limited vs Union Of India Thr. The Secretary… — Bombay High Court, 9 Apr 2025. The amendment to Section 3(12) of the Customs Tariff Act, 1975 by the Finance (No. 2) Act, 2024 — importing the Customs Act's interest, offence and penalty provisions into IGST levied under Section 3(7) — is prospective…
Rajbir Singh vs Union Of India & Ors. — Delhi High Court, 8 Apr 2025. Where Rule 16 of the Duty Drawback Rules prescribes no period of limitation, the general three-year limitation cannot be presumed to apply by default, especially where there are strong suspicions of fraudulent availment…
Vicky Ramchand Asrani vs Mumbai-Air Port — CESTAT, 19 Dec 2024. Illicit import of gold must be deterred, but not by alienation of possession from its owner — where goods are merely restricted and not truly prohibited, absolute confiscation under section 125 fails and the owner is…
M/S.G.T.India Private Limited vs The Commissioner Of Customs (Exports) — Madras High Court, 13 Nov 2024. Procedural irregularities in complying with the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 cannot defeat an importer's substantial right to drawback where the goods remained in customs custody,…
M/S Navayuga Engineering Co.Ltd vs Union Of India — Supreme Court of India, 23 Jul 2024. When the owner of confiscated goods redeems them on payment of fine under Section 125(1), the liability to duty arising under Section 125(2) must be assessed and determined under Section 28, and interest on delayed…
Ms Kseg India International vs Ce & Cgst Noida — CESTAT, 18 Jul 2024. Enhancement of the value of imported goods based on a DGOV circular, without rejecting the declared value under Rule 12 and applying the Valuation Rules sequentially from Rule 4 onwards, is unsustainable, and goods that…
Frigorifico Allana P Ltd vs Commissioner Of Customs-Nhava Sheva-I — CESTAT, 28 Jun 2024. Breach of conditions appended to a warehouse licence may warrant cancellation of the licence but not penalty under section 117, because imposition of penalty is in the realm of statutory enactment only and regulation 12…

All 76 judgments