No Vested Right To Redeem Confiscated Prohibited Goods Under Customs Act: Delhi High Court

The Delhi High Court has recently held that redemption of confiscated goods under Section 125 of the Customs Act, 1962 is not a vested or automatic right, particularly where the goods are prohibited for import.

Dismissing the writ petition filed by an importer challenging the absolute confiscation of areca nuts, the division bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul observed,

“Section 125(1) of the Customs Act employs the expression “may”, thereby conferring discretion upon the adjudicating authority to grant, or deny redemption, particularly in cases involving prohibited goods. The statute does not create an absolute or vested right to redemption.”

For context Petitioner had imported areca nuts in violation of the Minimum Import Price (MIP) condition, rendering the goods prohibited under the prevailing import policy. The customs authorities had ordered absolute confiscation, declining the option of redemption on payment of fine.

Petitioner argued that denial of the statutory option of redemption under Section 125 is arbitrary and contrary to law.

Dismissing the challenge, the High Court noted that the adjudicating authority had recorded detailed reasons for treating the goods as prohibited and for denying redemption.

It added, “The Customs Act, 1962 is a fiscal statute. This Court is of the view that fiscal statutes must be construed strictly…The Customs Act provides specific appellate mechanisms for challenging penalty quantification and confiscation, and writ jurisdiction cannot be converted into a surrogate appellate forum to bypass the statutory provisions, legislative intent and objective of prohibiting import of certain goods.”

As such, the Court dismissed the trader's plea.

For Petitioner: Advocates Pradeep Jain, Sambhav Jain and Pranav Raj Singh

For Respondent: Advocates Gibran Naushad, Senior Standing Counsel with Advocates Harsh Singhal and Suraj Shekhar Singh