Chatroom: 'Absolute Confiscation' need not lead only to destruction'

Absolute confiscation vests goods with govt but disposal may include auction, sale or destruction; overvaluation attracts penalties under customs act, while GST export lapses trigger tax liability

In our case, the adjudicating authority has passed an order for absolute confiscation of imported goods. Does that mean these goods have to be destroyed? 

Essentially, absolute confiscation means confiscation without redemption fine option, resulting in the goods vesting in the Central Government. That consequence flows from sections 125 and 126 of the Customs Act, 1962. The officer adjudging confiscation shall take and hold possession of the confiscated goods. The Central Board of Indirect Taxes and Customs (CBIC) has issued a ‘Disposal Manual 2019’, which contemplates, depending on the nature of goods, e-auction/auction-cum-tender for ordinary saleable goods, sale through specified agencies or government bodies in suitable cases, destruction where the goods are unsafe, prohibited for circulation, or otherwise unsuitable for sale, and  special procedures for sensitive categories such as arms, liquor, narcotic drugs, and certain food articles. 

In case of imports, where some overvaluation is noticed and so, no duty is payable, how is the quantum of redemption fine and penalty calculated?  

Any misdeclaration of value renders the goods liable for confiscation under Section 111(m) of the Customs Act, 1962. Section 112(iii) of the said Act says that (relevant extracts) ‘in the case of goods in respect of which the value stated in the entry made under this Act …….. is higher than the value thereof, to a penalty not exceeding the difference between the declared value and the value thereof or five thousand rupees, whichever is the greater. The second proviso to Section 125 of the said Act says that the redemption fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon. 

In Notification 45/2025 dated 24.10.2025, in certain columns duty rates have been mentioned as Nil and Dash (-) What do they exactly mean? 

‘Nil’ means the effective duty rate is ‘nil’. This meaning flows from the text of the opening para of the notification. Dash (-) means no exemption is available. The explanation below each table in the notification explains that normal effective rates will apply in such cases. 

Para 4.55 (v) says that items falling under prohibited categories are not eligible for RoDTEP. If prohibited items cannot be exported at all, what was the need to mention that they are ineligible for RoDTEP? 

The The Directorate General of Foreign Trade (DGFT) can issue authorisations for export of prohibited items. Please see Para 4.19(i) of the Foreign Trade Policy (FTP) which says that ‘export of a prohibited item may be allowed under Advance Authorisation provided it is separately so notified, subject to the conditions given therein’. 

We sent certain goods to a merchant exporter at 0.1 per cent GST. He could not export to the UAE due to the war. What is the consequence for us? 

Para 2 of the notifications 41/2017-IT (rate) and 40/2017-CT (Rate) both dated 23.10.2017 say that the   registered   supplier  shall   not   be   eligible   for   the   above-mentioned exemption if the registered recipient fails to export the said goods within a period of ninety days from the date of issue of tax invoice. 

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