A clear distinction is made between ‘prohibited goods’ and ‘other goods’. As has rightly been pointed out, the latter part of Section 125 of The Customs Act, 1962 obligates release of confiscated goods (i.e., other than ‘prohibited goods’) against redemption fine. But, the earlier part of this provision makes no such compulsion as regards ‘prohibited goods’; and it is left to the discretion of the Adjudicating Authority that it may give an option for payment of fine in lieu of confiscation. It is innate in this provision, if the Adjudicating Authority does not choose to give such an option, result would be of absolute confiscation.
The quest has to be to find what is proper. When exercising discretion conferred by Section 125, one has to ensure such exercise is in furtherance of accomplishment of the purpose underlying conferment of such power. The purpose behind leaving such discretion with the Adjudicating Authority in relation to ‘prohibited goods’ is, obviously, to ensure all pros and cons shall be weighed before taking a final decision for release or absolute confiscation of goods.
The principles relating to exercise of discretion are expounded in various decisions. When it comes to discretion, the exercise thereof has to be guided by law; has to be according to rules of reason and justice; and has to be based on relevant considerations. The requirements of reasonableness, rationality, impartiality, fairness and equity are inherent in any exercise of discretion. It is a critical and solemn exercise, to be undertaken cautiously.
– Hon’ble Justice Dinesh Maheshwari, Union of India v. M/s. Raj Grow Impex LLP, [Civil Appeal Nos. 2217-2218 of 2021].