Hitesh Miglani vs Union Of India & Ors.

Nitin Wasudeo Sambre, J.

Heard learned counsel for the respective parties.

The petitioner, who claims to be the owner/importer of Silver jewellery, has preferred this petition seeking directions to the respondents to release the seized silver jewellery on payment of redemption fine and appropriate duty in terms of the statutory mandate under Section 125 of the Customs Act, 1962 (hereinafter referred to as “Act of 1962” or “Customs Act”).

The prayer in the petition is confined only to the aforesaid extent, as the arguments about the sustainability of the order dated 22^nd June, 2021 passed by Government of India, Ministry of Finance (Department of Revenue), on its merits, are not canvassed.

The facts necessary for deciding the present petition are as under:-

a. On 20^th May, 2016, noticee nos.1 and 2 as named in the Show Cause Notice dated 1^st July, 2016, were apprehended while they were attempting to cross the green channel.

b. During enquiry, both the said noticees revealed the name of the petitioner, who was waiting outside the airport. Upon interrogation, the petitioner disclosed the names of noticee nos. 3 to 5, who were travelling on different flights, as well as of noticee no. 7 as another associate, who was also present outside the airport with him. Accordingly, noticee nos. 1 to 5 and 7 were scanned and checked, which led to the seizure of the goods on 21^st May, 2016 under Section 110 of the Act of 1962, by drawing a panchanama.

c. The purity of the seized silver jewellery from the abovementioned noticees was found to be 80% and the gross weight thereof was 98.849 kgs, which at the relevant time was valued at Rs. 31,55,260/-. Accordingly, having regard to the purity and taking the net weight of the silver jewellery to be 95 kgs, the value was determined at Rs. 29,06,522/-.

d. Based on the above, a supplementary panchanama was drawn on 23^rd May, 2016, which led to the issuance of Show Cause Notice dated 1^st July, 2016 by respondent no. 3 to all the noticees.

e. None of the noticees chose to file reply to the said Show Cause Notice, however, the petitioner on the basis of authorization in his favour from all the noticees, appeared for personal hearing and tendered apology stating that he was willing to pay the penalty and applicable duty levied on the aforesaid detained goods for their release.

f. In view of the provisions of Section 111 of the Act of 1962, respondent no. 3 - the Additional Commissioner of Customs vide order dated 7^th March, 2017, directed absolute confiscation of the Silver jewellery and denied the option to redeem the same on payment of redemption fine. However, the electronic items valued at Rs. 2,20,53,542/- were ordered to be redeemed on payment of a redemption fine of Rs. 30,00,000/-. A penalty of Rs. 45,00,000/- under Sections 112 and 114AA of the Act of 1962 was imposed on the petitioner. Further, a penalty of Rs. 1,50,000/- each was imposed on noticee nos. 1 to 5, and a penalty of Rs. 1,00,000/- was imposed on noticee no. 7.

g. Pursuant to the Order-in-Original, the petitioner paid the redemption fine and got the electronic items released.

h. Feeling aggrieved by the denial of the option of redemption in respect of the Silver jewellery, the petitioner preferred an appeal before respondent no. 2 – the Commissioner of Customs (Appeals), who vide order dated 23^rd March, 2018, dismissed the same by observing that the silver articles are “prohibited goods” within the meaning of Section 2(33) of the Act of 1962.

Thereafter, feeling aggrieved by the order of respondent no. 2, the petitioner preferred a revision application before the Department of Revenue under Section 129 DD of the Act of 1962, which was also dismissed on 22^nd June, 2021. As such this petition.

According to learned counsel for the petitioner, the petitioner is an importer of Silver jewellery and Silver is not a prohibited item within the meaning of Section 2(33) of the Act of 1962. It is contended that there is no material on record to infer that silver was a prohibited item at the relevant time when the same was detained. He would further claim that once the respondents were unable to substantiate their contention that silver was a prohibited item on the date when the goods in question were sought to be imported in the country, there was no reason for denying the petitioner the option of redemption under Section 125 of the Customs Act.

In addition, learned counsel for the petitioner contends that no reasons whatsoever is recorded in support of the contentions that silver was a prohibited item and the same cannot be permitted to be imported in view of the mandate provided under Section 11 of the Act of 1962, which confers power to prohibit importation or exportation of goods.

In order to substantiate this contention, he has submitted that as per the Export-Import Policy of India prevailing in the year 2016, Chapter 71 of the ITC (HS) Classification, Schedule I, categorized silver jewellery as free at the time of the subject import. Thus, according to him, it cannot be disputed that under the Foreign Trade (Development and Regulation) Act, 1992, the petitioner could have imported silver jewellery. That being so, he would claim that once the silver jewellery can be imported in the country, there was no statutory embargo to treat silver as a banned or prohibited item for the purposes of exercising powers under Section 125 of the Customs Act for providing option of redemption in favour of the petitioner.

Learned counsel for the petitioner would further urge that the respondents in exercise of powers under Section 3 of the Foreign Trade (Development and Regulation) Act, 1992, issued Notification No. 36 dated 18^th December, 2019, whereby the import policy in respect of silver and gold, in any form, was amended and restrictions were imposed on the import of silver. He would claim that such restriction imposed by virtue of a notification issued under Section 3 of the Foreign Trade (Development and Regulation) Act, 1992, is prospective in nature and cannot be made applicable to the facts of the present case, as the goods in question were detained as far back as in the year 2016. As such, he would urge that the decision of the respondents in denying the option of redemption is ex facie illegal. He would, therefore, claim that the respondents ought to have appreciated that, at the relevant time, silver imported by the petitioner was in free category and same was, by amendment through a notification, was restricted qua the import in year 2019.

Drawing support from the judgment of Apex Court in the matter of Asian Food Industries v. Commissioner of Customs, 2006 (204) ELT 8 (SC), it is urged that the meaning of word ‘prohibition’ has to be construed in regard to context in which it is used. According to him, the word ‘prohibition, ‘restriction’ and ‘regulation’ are meant to be applied differently. Further, respondents have erred in recording a finding that the silver goods which were detained, pursuant to the import carried out by the petitioner, becomes prohibited if same are brought in contravention of such restrictions. As such, the contention is that silver was freely importable in year 2016, in jewellery or other form, and cannot be termed as ‘prohibited’ item under the Foreign Trade Policy as was existing. He would further claim that the petitioner is willing to pay redemption fine, penalty and dues as shall be imposed.

As against above, learned counsel for the respondents opposed the prayer of the petitioner. It is claimed by the respondents that what was permitted to be imported was silver jewellery and not silver in the form in which it was seized. According to them, there are concurrent findings against the petitioner, wherein the request for redemption, as statutorily provided under Section 125 of the Act of 1962 was denied.

In the aforesaid background, it is urged that this Court should be very cautious in exercising jurisdiction in favour of the petitioner, particularly, under Article 226 of the Constitution of India. It is further contended that the impugned orders have been passed after due application of mind by the respective authorities, as the remedy of redemption under Section 125 of the Act of 1962 was granted qua the electronic goods, which were valued at eight times more than the value of silver at the relevant time.

Learned counsel would further urge that Court is required to be equally sensitive to the very conduct of the petitioner as in a clandestine manner, the petitioner has sought to import silver illegally in the country.

Learned counsel for the respondents have further sought to rely upon the statements of the petitioner recorded under Section 108 of the Customs Act, 1962 on 20^th May, 2016 as well as 12^th June, 2016. He would claim that the petitioner, during the course of personal hearing has accepted that he has imported the silver illegally. According to the respondents, the issues were duly framed by the first Adjudicating Authority while exercising discretion under Section 125 of the Act of 1962. It is further urged that the combined quantity of goods brought by all the noticees in their baggage, as seized by the respondents and admitted by the petitioner, was substantial in volume and was rightly categorized as “commercial goods.” It is claimed that as violation of Section 77 of the Customs Act was noticed, the goods were lawfully detained and a Show Cause Notice was rightly issued.

It is further urged that silver was allowed to be imported freely in baggage, whereas the same, in bullion form or in jewellery form is permitted to be carried by passengers subject to the fulfilment of certain conditions. According to him, Rule 3(1)(h) of the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993 provides that silver is a prohibited item. According to them, the petitioner has neither satisfied nor fulfilled the definition of an “eligible passenger” as provided in Condition No. 35 of Notification No. 12/2012 dated 17^th March, 2012. As such, it is his contention that the goods were rightly absolutely confiscated, and that the discretion was exercised in a reasonable manner, thereby considering the very object of the statute and the relevant provisions. That being so, dismissal of the petition is sought.

We have considered the rival claims.

The fact remains that the petitioner was served with Show Cause Notice dated 1^st July, 2016. In the said Show Cause Notice, the petitioner was styled as noticee no.6 and the specific allegations against him in the Show Cause Notice reads thus:-

The petitioner, though has not submitted any reply to the Show Cause Notice, attended the hearing and admitted his mistake.

The same led to the seizure of the silver and other articles and accordingly, the impugned order dated 7^th March, 2017 came to be passed, whereby the silver was absolutely confiscated without giving an option of redemption, whereas the other electronic goods were permitted to be redeemed.

While the petitioner is not aggrieved by the order of confiscation, his contention is that, on the date when the goods were imported, there was no statutory embargo to infer that it was a “prohibited good” within the meaning of Section 2(33) of the Customs Act. Therefore, the goods ought to have been redeemable upon payment of an appropriate redemption fine.

In the Order-in-Original, so as to infer that silver is a “prohibited” item, reliance has been placed by respondent no. 3 on the provisions of the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993, the Baggage Rules, 2016, and the Foreign Trade (Development and Regulation) Act, 1992. The relevant observations of the authority who passed the Order-in-Original read as follows:

Respondent no. 3, for the purpose of declaring silver to be a “prohibited” item, has drawn support from the aforesaid provisions merely by referring to them; however, how the item becomes “prohibited” has not been discussed at all in the order passed by respondent no. 3. Rather, respondent no. 3 has proceeded to record that it is not inclined to offer redemption in respect of the seized silver jewellery articles for the reasons that the same was being tried to be cleared from Green Channel without declaring the same before the Custom Authorities. The said authority, in order to substantiate its findings, has further recorded that the Government of India is attempting to discourage the import of gold and silver in commercial quantities so as to safeguard national economic interests.

In the appeal, the respondent no.2 has endorsed the very same views by observing that the goods were sought to be smuggled in violation of provisions of Section 77 of the Customs Act. In such an eventuality, as there was no declaration to the Custom Authorities, the petitioner’s goods cannot be termed as bona fide baggage in terms of Section 77 of the Customs Act read with clause 2.20 of the Foreign Trade Policy 2009-14 and in such an eventuality, the petitioner was held not to qualify as a passenger carrying baggage so as to avail the exemption under Rule 3(1)(h) of the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993.

Apart from the above, though reliance has been placed on Notification No. 12/2012 dated 17th March, 2012 Serial no.322, condition no.35, the same is not at all discussed in detail so as to how it creates an embargo on the petitioner’s right to claim redemption. At this stage, a reference could be made to the said serial no.322 and the corresponding condition no. 35, the same reads as under:

The revisional authority, while dealing with the question of law as to whether Silver jewellery is “prohibited” or not, placed reliance on the judgment passed by the Apex Court in Sheikh Mohd. Omer vs. Collector of Customs, Calcutta & Ors. [1971 AIR SC 293]. According to the revisional authority, a restriction is a form of prohibition and therefore, the silver brought by the petitioner in the form of jewellery is not permitted to be imported freely as baggage. As such, the claim of the petitioner was rejected.

From the foregoing, in our opinion, the following principal issues arise for consideration:

Whether the imported subject silver goods are liable for confiscation under Section 111 of the Customs Act, 1962?

Whether the subject goods fall under the category of “prohibited goods” as defined under Section 2(33) of the Customs Act, making them liable for absolute confiscation and thereby rendering the goods ineligible for redemption under Section 125 of the Customs Act.

Whether the absolute confiscation was justified or whether redemption under Section 125 was mandatory.

It is not in dispute that the petitioner has accepted the procedural irregularity in the import of the goods and has conveyed his willingness to pay the customs duty and redemption fine, as may be leviable.

The sole question that falls for consideration is whether the seized silver jewellery can be regarded as “prohibited goods” and, consequently, whether the authorities were justified in denying the option of redemption under Section 125 of the Customs Act.

It is pertinent to extract the relevant observation from the Order-in-Original dated 7^th March, 2017, the Order-in-Appeal dated 23^rd March, 2018, and the Impugned Revisional Order dated 22^nd June, 2021, which state the reasons for the absolute confiscation of the subject goods.

The respondents’ contentions are acceptable inasmuch as the goods were imported in contravention of Section 7 of the Foreign Trade (Development and Regulation) Act, 1992 (‘FTA, 1992’), which mandates that no import can be made except under an Importer-exporter code number. The consequences of contravention of Section 7 are provided in Section 11 of the FTA, 1992, which states that the contravention of any provision of this Act, subject to such conditions and requirements as may be prescribed, shall render the goods liable to confiscation by the Adjudication Authority. Further, it states that the goods may be released by the Authority in such manner, and subject to such conditions, as may be prescribed, on payment of the redemption charges equivalent to the market value of the goods or conveyance, as the case may be.

The interplay of Section 7 and Section 11 of FTA, 1992, leads to the legal conclusion that the goods imported in contravention of Section 7 of the FTA, 1992 rendered such goods liable to confiscation upon which same can be released on payment of the redemption charges, subject to the prescribed conditions.

It is acceptable that the subject goods were not eligible for exemption under Rule 3(1)(h) of the Foreign Trade (Exemption from Application of Rules in Certain cases) Order, 1993 (‘FTO, 1993’) which provides exemption to the person as passenger baggage to the extent admissible under the Baggage Rules. This simply connotes that the subject goods did not fulfill the condition as set out in Rule 3(1)(h) which means that the subject goods were not eligible for exemption from the Foreign Trade (Regulation) Rules, 1993 (‘FTR, 1993’).

Section 11 of the FTR, 1993 mandates that on the importation of any goods, whether dutiable or not, the owner of such goods shall state the value, quality, and description of such goods to the best of his knowledge and belief. Section 17 of the FTR, 1993, provides that any contravention of any condition would make the goods liable for confiscation and that the same may be permitted for redemption upon payment of the redemption charges.

Hence, the interplay of the aforesaid provisions also leads to this limited conclusion that the subject goods were liable for confiscation and the same may be permitted for redemption upon payment of the charges as shall be leviable in accordance with law.

It is urged by the respondents that what was permitted to be imported was silver jewellery and not silver in the form in which it was seized. From the perusal of the evidence on record, specifically the Appraisement Report dated 23^rd May, 2016, the description of subject goods has been ascertained as “Jewellery seized vide panchnama dated 21.05.2016”. This contention of the respondents that the seized goods were not in the form of jewellery is thus untenable in view of the Appraisement Report dated 21^st May, 2016. Even assuming that the subject seized goods were not in the form of jewellery, the ITC HS Import policy applicable during the relevant period, which would be the ITC HS 2012 Import Policy (Schedule-I) in Chapter 71, categorized Silver, in unwrought or in semi-manufactured forms or in powder form, as freely importable subject to RBI guidelines. Further, articles of silver jewellery were categorized as freely importable and were not subject to any guidelines.

Chapter 11 of the Foreign Trade Policy enumerates the definition of “Free”, as appearing in the context of the import/export policy, for items as goods which do not need any ‘Authorisation’/ License or permission for being imported into the country or exported out.

In the present case, the respondents have not presented any notification issued under Section 11 of the Customs Act or any provision under the FTA, 1992 declaring silver jewellery to be a prohibited item. Reliance has been placed on the Notification No. 36 dated 18^th December, 2019, whereby the import policy in respect of silver, in any form, was amended and restrictions were imposed on the import of silver. The import policy of silver, in any form, was thereby changed from “Free” to “Restricted”. The Revised Policy Condition mandated that the import of silver would be allowed only through nominated agencies as notified by RBI and DGFT. It is to be noted that no such restriction was in place before the aforesaid Notification, i.e., prior to year 2019 and silver could be freely imported subject to RBI conditions. The Notification cannot be said to be applicable retrospectively, in absence of express provision to that effect. Thus, the same is not applicable to the subject goods which were seized much prior to the date of the Notification.

Even under the subsequent policy regime, silver was not categorized as a prohibited item. The distinction is material, since restricted goods remain importable subject to conditions or licences, whereas prohibited goods are goods whose import is altogether barred. Silver has never been shown to fall in the latter category.

The provisions relating to free clearance under the Baggage Rules, 2016 do not alter this position. Rules 3, 4 and 6 prescribe the categories of articles that may be cleared without payment of customs duty under the general baggage allowance and transfer-of-residence concessions. Each of these provisions expressly excludes articles listed in Annexure I, which includes silver except in the form of ornaments. Upon a bare perusal of the Appraisal Report, it can be noted that the subject silver goods were in the form of jewellery, which would ordinarily fall within the ambit of ornaments. However, the subject goods do not fulfill the requirement under Rule 3 as the value of the goods was above fifty thousand rupees.

It can be answered in the affirmative that the subject silver goods are excluded from the bona fide import as illustrated in the Baggage Rules, 2016, thus, the subject silver goods would not qualify as an item allowed import as passenger baggage, but the same would not automatically make such goods prohibited. Non-qualification from import as passenger baggage under Baggage Rules, 2016 merely means that such goods would not be eligible for clearance free of duty, which makes such goods “dutiable”, not “prohibited”.

The respondents in the present case vide the Order-in-Original, the Order-in-Appeal and the Impugned Revisional Order reiterated that silver is not allowed to be imported freely in baggage. Further, it was held that the import of the subject goods was not in fulfilment of the conditions set out under various provisions of law, such as Section 7 of the FTA, 1992 and Rule 3(1)(h) of the FTO, 1993. It was also found that the Noticees did not fulfil the definition of “eligible passenger” as given in Condition 35 of the Notification No. 12/2012 dated 17^th March, 2012.

The respondents placed reliance on Commissioner of Customs (AIR) Chennai-I v. Samynathan Murugesan, 2009 (247) E.L.T. (Mad.), wherein the imported gold was held to be prohibited goods, as the respondent was not considered an eligible passenger as per the Exemption Notification no. 31/2003.

It is to be noted that Notification No. 12/2012 is an exemption notification granting concessional customs duty on specified goods, including silver, subject to fulfillment of certain conditions. It does not impose any prohibition on the import of silver goods, and the conditions mentioned therein along with the definition of “eligible passenger” are limited to the scope of claiming the concessional duty so mentioned. Thus, it is not a prohibitory notification.

Consequently, silver cannot be counted within the duty-free allowances available to passengers and must be declared and cleared on payment of the applicable customs duty. The exclusion of silver from the scope of free clearance only means that no duty exemption is available under the Baggage Rules. It does not amount to a statutory prohibition on import. Accordingly, silver was a freely importable commodity, subject to declaration and payment of the prescribed duty, and its non-eligibility for duty-free clearance cannot by itself render it “prohibited goods” within the meaning of Section 2(33) of the Customs Act.

The subject goods in the present case were not subject to any prohibition under the Customs Act or any other law. Even if the contention of the Respondents is accepted that the silver was not in the form of jewellery, it would still be freely importable subject to the RBI guidelines. In the Impugned Orders, no such RBI guidelines have been referred to.

It has been observed in the Order-in-Original that the government, in order to safeguard the national economic interest, is trying to discourage the import of Gold and Silver, in commercial quantity, and that the release of such goods would not assist in the enforcement of the regulations. Section 11 of the Act empowers the Central Government to prohibit either absolutely or subject to such conditions as may be specified in the notification, the import or export of goods of any specified description. To justify the observations made in all the three orders viz. Order-in-Original, order passed by the Appellate Authority and also the order of Revisional Authority, it was expected of them to rely on the provision of policy or the parent statute or any regulation to justify their observation that silver was a prohibited item. Rather, it is from the contention of the petitioner, particularly, from the notification of 2019, it is established that it was not a prohibited item.

It is a settled legal position that a statutory body must act within the framework of the statute and cannot travel beyond the statute. In the case of Shridhar C. Shetty (Deceased) Through Legal Representatives v. Additional Collector and Competent Authority and Others, (2020) 9 SCC 537, the court held:

The respondent authorities are statutory authorities constituted under the Customs Act, 1962. Being creatures of the statute, they are bound to exercise only such powers as are expressly conferred upon them by the Act and cannot travel beyond the statutory framework.

The respondents placed reliance on the case of Om Prakash Bhatia v. Commissioner of Customs, Delhi, 2003 (155) ELT (SC), wherein it has been held that if there is any prohibition of import or export of goods under the Customs Act, 1962 or any other law for the time being in force, the goods would be considered to be prohibited goods. This prohibition would also operate on such goods, the import or export of which is subject to certain prescribed conditions, if the conditions are not fulfilled. The fact remains that silver at the time was freely importable and was not subject to any restrictions or any prescribed condition whatsoever, except for the statutory mandates discussed above, non-compliance of which has been limited to confiscation. The ratio in the matter of Om Prakash (cited supra) will be hardly applicable to the case in hand as is claimed by the respondents, particularly, when they are unable to demonstrate before this Court that there exists a statutory restriction or otherwise on the import of silver goods, on the date when the same were detained.

For a determination of whether the subject goods are prohibited goods, we need to consider whether the goods fall under the definition of Section 2(33), which states that any prohibition under the Customs Act, or any other law for the time being would render the goods prohibited. In view of above, we have no hesitation to hold that the subject goods were not prohibited under the Customs Act or the law as was existing in 2016 particularly when the respondents have failed to demonstrate that the goods were prohibited on the date of its import from any of the statutory provision. The second part of the definition includes goods that were subject to any conditions or regulations and the breach of the same resulted in such goods being covered under the ambit of prohibited goods.

It has already been established that as per the ITC HS Policy, 2012, silver goods were not “restricted” or “prohibited”. They were freely importable at the time and were simply subject to RBI guidelines. It was only subsequently, in 2019, that the import policy relating to silver was amended to permit the import of silver only through nominated agencies notified by the RBI and DGFT. In the Impugned Orders, no such RBI guidelines have been referred to.

Section 125(1) of the Customs Act draws a clear distinction between “prohibited goods” and “goods other than prohibited goods”. In the case of prohibited goods, the adjudicating authority may, in its discretion, grant an option to redeem the goods on payment of fine. In the case of goods other than prohibited goods, the statute mandates that such an option of redemption shall be given. Thus, once it is found that the goods are not “prohibited goods” within the meaning of Section 2(33), the grant of redemption is not discretionary but obligatory.

It can be thus concluded from the observations above that the non-compliance with the aforementioned sections merely made the goods ineligible for free clearance of duty and liable to confiscation. The Impugned Orders do not state, in any manner, how the goods become liable to absolute confiscation with no option of redemption. The correlation established between the said sections in the Impugned Orders to hold that the goods were prohibited goods and liable for absolute confiscation seems to be insufficient.

The respondents have placed reliance on the case of Sheikh Mohd. Omer to contend that “any prohibition” means all types of prohibition, and thus restriction is one type of prohibition, which has been brought out by the Order-in-Original that the silver jewellery is not allowed to be imported freely in baggage and therefore, was a prohibited item. This contention has been dealt with above, wherein it has been observed that the subject silver goods were erroneously treated as not being freely importable. The said contention is contrary to the applicable ITC HS Import Policy, 2012, which clearly stipulated that silver was freely importable, subject only to RBI guidelines. Thus, there was no express prohibition or restriction applicable, hence the holding in Sheikh Mohd. Omer is not applicable in the present case.

Thus, the subject silver goods cannot be termed as “prohibited goods” and the discretion to allow redemption does not lie with the Adjudicating authority. The petitioner is entitled to the statutory option of redemption under Section 125 upon payment of redemption fine, duty, and other charges as may be determined in accordance with law.

In relation to the matter of penalty imposed vide the Order-in-Original, the reason of imposing a high penalty on the petitioner has been stated to be in consideration of the mens rea, i.e., the intent of smuggling and evasion of duty and the actus reus of crossing the Green Channel and non-declaration of the seized goods. The Petitioner was ordered to pay a penalty of Rs. 45,00,000/- under Section 112 and 114AA of the Customs Act, 1962. The penalty had been imposed in respect of the contraband totally valued at Rs. 2,49,60,094/-. The imposition of penalty was upheld in the Appellate Order and the Impugned Revisional Order.

The contravention of the provisions of the Act stands established and the imposition of penalty cannot be faulted altogether. Once this Court is of the view that the goods which were detained in the case in hand are not prohibited under the import policy, we have no hesitation to hold that subject goods are liable for redemption.

The Act, particularly, Section 125, provides for redemption and such procedure for redemption pre-supposes hearing to be granted.

As such, we permit the petitioner to appear before the respondent on 15^th June, 2026 and the respondents are directed to decide the redemption fine that has to be imposed in exercise of the power under Section 125, as the impugned orders are not providing relief to that extent in favour of the petitioner.

The respondents are directed to decide the said redemption fine, in accordance with the provisions of Section 125, within a period of six weeks from the date of appearance of the petitioner.

Such redemption fine imposed by the respondent once communicated in writing to the petitioner, the petitioner must pay the same within the statutory period prescribed, i.e., one hundred and twenty days from the date of option, along with outstanding duty and penalty.

The exercise of powers by this Court under Article 226 in the matter of granting benefit of redemption is having regard to the reasons recorded in the foregoing para viz. silver at the relevant time was not a prohibited item to mean that its import was not completely and blanketly banned. Once we have held that it was not a banned item, same can be subjected to reasonable restriction, i.e., the payment of redemption fine.

The subject silver goods, did not fall under the category of ‘prohibited goods’ or ‘restricted goods’, at the time of their import. The subject goods were freely importable at the time, and only subsequently, in 2019, vide Notification No. 36 dated 18^th December, 2019, the status of import of silver was amended from ‘free’ to ‘restricted’. In accordance with the reasons recorded herein, the subject silver goods cannot be said to be ‘prohibited goods’, and the same could not have been made liable for absolute confiscation. In the case of “goods other than prohibited goods”, it is obligatory to grant the option of redemption to the petitioner and the authority could not have exercised its discretion for the same.

The writ petition, as such, stands allowed in above terms.

In response to the Court’s query, the petitioner has volunteered that he shall deposit a cost of Rs. 25,00,000/- in this Court, particularly, having regard to his conduct as reflected in the factual matrix. Let the aforesaid cost be deposited in this Court, in any case, by 15^th July, 2026.

For the purpose of apportionment of said cost, we direct the Registry to place this matter before the Court once the cost is deposited.

Pending application, if any, also stand disposed of.

A copy of this Judgment be uploaded on the website of this Court.