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3. Facts of the Customs Appeal:

(i) The respondent in this appeal of the department imported an old/used vessel along with 193.685 MTs of Remnant Oil on Board (ROB) comprising 87.345 MTs of Fuel Oil, 98 MTs of Diesel Oil and 8.3 MTs of Lube Oil, for breaking / scrapping. They filed a Bill of Entry on 31/05/2002 for clearance of the goods totally valued at over Rs. 4.7 crores (CIF). The ship with spares and other machinery / accessories were assessed under CTH 8908.00 and the ROB was assessed under CTH 2710.90 as declared by the importer. Upon payment of the duty assessed, the vessel was allowed out of customs charge and permission for scrapping it was granted. Later on, a tanker-lorry carrying ROB from the above ship was detained by the customs authorities and representative samples of Fuel Oil and Diesel Oil were drawn in the presence of the importer's representative and CHA. The test report on the sample of Diesel Oil matched the importer's declaration. But the test report on the sample of Fuel Oil stated that, in view of its composition (Ash content of 1.1% by weight, Sediment of 1.1% by weight and Water content of 33.3% by weight), it could be considered as "off specification material / waste oil". The explanation given by the party vis-`-vis the test report on what was declared by them as Fuel Oil did not convince the customs authorities. After recording statements of the importer's authorized signatory and conducting allied enquiries, the department issued a show-cause notice to them proposing inter alia to confiscate 87.345 MTs of what was declared as fuel oil, under Section 111(d) and (m) of the Customs Act, 1962. This and other proposals were contested. In their written submissions, the importer contended inter alia that, as the Bill of Entry had been assessed and out-of-charge given under Section 47 of the Customs Act, it was not open to the department to issue show-cause notice for confiscation of the goods under Section 124 of the Act. These and other arguments were repelled by the adjudicating authority, which ordered confiscation of the goods under Section 111(d) and (m) of the Customs Act and also imposed a fine of Rs. 1 lakh under Section 125 of the Act in lieu of confiscation. The adjudicating authority also imposed a penalty on the importer under Section 112(a) of the Act. Against the order of adjudication, the party preferred appeal to the Commissioner (Appeals) and the latter set aside the confiscation of the goods after observing that it was far- fetched on the part of the original authority to hold that the importer had misdeclared waste oil as fuel oil. The appellate authority, further, reduced the quantum of penalty. Hence the Revenue's appeal.

4. Heard both sides.

5. The learned counsel for the respondent in the Customs Appeal submitted that the issue had already been settled in the case of Commissioner of Customs, Amritsar vs. Raja Impex (P) Ltd. 2008 (229) ELT 185 (P&H). The respondent in that case had imported a consignment of used computer monitors valued at US $ 5 per piece and they filed a Bill of Entry for its clearance. The department, on the basis of certain data collected by them, found the declared value to be very low. According to them, the CIF value should be US $ 15 per piece. On this basis, it was alleged that the importer had misdeclared the value of the goods. The show-cause notice containing this allegation proposed to confiscate the goods under Section 111 of the Customs Act as also to impose penalty on the importer under Section 112 of the Act. After hearing the party, the adjudicating authority confiscated the goods and also imposed a fine of Rs.60,000/- in lieu of confiscation. It also imposed a penalty on the importer. The party preferred appeal to the Commissioner (Appeals) and the latter set aside the redemption fine in view of the Supreme Court's judgment in Weston Components Ltd. vs. Commissioner of Customs, New Delhi 2000 (115) ELT 278 (SC) and reduced the quantum of penalty. Aggrieved by the appellate Commissioner's decision, the department went in appeal, which was dismissed by the Tribunal. The department approached the High Court in appeal against the Tribunal's decision. One of the questions of law raised in that appeal was whether redemption fine under Section 125 of the Act could be imposed where the goods were neither available for confiscation nor cleared under bond / undertaking. The Hon'ble High Court, after considering the apex Court's judgment in Weston Components case (supra), held that any redemption fine could not be imposed in the absence of the goods which had already been released by the customs authorities to the importer without execution of any bond / undertaking by the latter. Conversely, it was held that, where the goods were released under bond / undertaking, they could be confiscated as if the goods were available and consequently redemption fine in lieu of confiscation could also be imposed.