1. This appeal is directed against the judgment of the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as "the Tribunal") dated 31-12-1991 whereby the appeal filed by the appellant against the order dated 10-7-1989 passed by the Additional Collector of Customs, New Delhi was dismissed. By his order dated 10-7-1989 the Additional Collector of Customs had directed confiscation of the goods covered by Bill of Entry No. 104090 dated 24-5-1988 of synthetic rags and serviceable garments absolutely under S.111(d), 111(f), 111(i), 111(l), 111(m), 111(e) as well as under S.119 of the Customs Act, 1962 (hereinafter referred to as " the") and had also imposed a personal penalty of Rs 7 lakhs on the appellant under S.112(b) of the.

2. On 24-5-1988 M/s Arbindo Woollen Mills filed a bill of entry for clearance at Inland Container Depot (ICD), Customs, Pragati Maidan, New Delhi. Along with the said bill of entry the said M/s Arbindo Mills gave a declaration for importing the goods under open general licence saying that they are registered with the authorities in Kanpur as a small scale industry and that their registration has not been cancelled. They also filed the approval of the Textile Commissioner, Kanpur dated 9-5-1988 for the transfer and sale of 64 MT and 145 MT of synthetic rags to the appellants as transferred from one actual user to another in terms of the provisions of S.108 to 111 of the Handbook of Procedure for Import and Export Policy 1988-91. On examination of the bales it was found that the front view rolls of bales were found to be synthetic woollen rags and behind were found bales containing trousers cut into two pieces and serviceable garments including shirts and windcheaters. The number of shirts in all the five containers on examination was found on pro rata basis as 40,460 pieces and the total number of windcheaters was arrived at 20,020 pieces. The Department took the view that these serviceable garments had been concealed amongst mutilated garments and as such the whole consignment was liable to be confiscated under S.119 of the Customs Act. Show cause notices were, therefore, issued to Sanjeev Kumar, Proprietor of M/s Arbindo Woollen Mills as well as to the appellant and one S.P. Goyal. After considering the replies of the said persons to the show cause notices the Additional Collector of Customs passed the order aforementioned. The Additional Collector in the said order has recorded the following finding:

"Evidently, it is clear that Shri S.P. Goyal is the brain behind in fraudulently importing huge quantity of raw material in the name of nonexistent unit and Shri Sanjeev Kumar is his front man and M/s Garg Woollen Mills is the beneficiary in these imports. The non appearance of Shri Ajay Garg, Director of M/s Garg Woollen Mills before the DRI Authorities in spite of summons also indicates guilt on his part. Similarly the appearance of Shri S.P. Goyal before the DRI officials as late as 10-10-1988 in pursuance of the directions given by the Additional Sessions Judge, Ludhiana on his anticipatory bail application dated 6-9-1988 and that too in presence of his advocate is also indicative of his involvement in these nefarious activities."

3. On appeal the Tribunal has agreed with the said finding recorded by the Additional Collector. The Tribunal has found that the permission for transfer of the goods in terms of the import policy granted by the Textile Commissioner had been cancelled. It was further observed that "the present case is the culmination of intelligence received by DRI that ghost units are set up to misuse the OGL facility given to actual users manufacturing shoddy yarn to import rags and serviceable garments which are imported and disposed of in the market". The Tribunal has, therefore, upheld the order regarding confiscation of the goods and imposition of penalty on the appellant.

4. Shri Mahabir Singh, learned counsel for the appellant placed before us a copy of the order dated 24-11-1995 passed by the Tribunal in the appeal filed by S.P. Goyal against the judgment of the Additional Collector wherein the Tribunal has set aside the penalty that was imposed on S.P. Goyal under the order dated 10-7-1989 passed by the Additional Collector. The submission is that since the penalty imposed on S.P. Goyal has been set aside by the Tribunal, the present impugned judgment of the Tribunal upholding the order for imposition of penalty on the appellant and confiscation of goods cannot be sustained and should be set aside. We have perused the order of the Tribunal dated 24-11-1995 and we find that in the said order the Tribunal has distinguished the case of the appellant on the ground that in the impugned order passed in the case of the appellant the Tribunal was evaluating the evidence against the appellant and that the order in respect of the appellant does not apply to the case of S.P. Goyal when the Tribunal has found that the evidence was not sufficient for imposition of penalty against him. Since the Tribunal has itself held that the case of the appellant has to be distinguished from that of S.P. Goyal, the order of the Tribunal dated 24-11-1988 cannot lend any assistance to the case of the appellant.

5. Another contention that was urged by Shri Mahabir Singh was that the Additional Collector, as also the Tribunal, have failed to take into consideration the provisions contained in Section 125 of thewhich prescribes that whenever confiscation of any goods is authorised by the, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under the or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit. We do not find any merit in this contention of Mr Mahabir Singh. Under S.125 a discretion has been conferred on the officer to give the option to pay fine in lieu of confiscation in cases of goods, the importation or exportation whereof is prohibited under the or under any other law for the time being in force but in respect of other goods the officer is obliged to give such an option. In the present case, having regard to the facts and circumstances in which the goods were said to be imported and the patent fraud committed in importing the goods, the Additional Collector has found that the goods had been imported in violation of the provisions of the Import (Control) Order, 1955 read with S.3(1) of the Import and Export (Control) Act, 1947. In the circumstances he considered it appropriate to direct absolute confiscation of the goods which indicates that he did not consider it a fit case for exercise of his discretion to give an option to pay the redemption fine under S.125 of the. The Tribunal also felt that since this was a case in which fraud was involved, the order of the Additional Collector directing absolute confiscation of the goods did not call for any interference. We do not find any reason to take a different view.

6. Placing reliance on the decision of this Court in Collector of Customs v. Swastika Woollen Industries (1990 (47) ELT 216 (SC) Shri Mahabir Singh has lastly submitted that instead of the goods being directed to be confiscated the offer made by the appellant that the goods which have been imported may be further mutilated by the authorities should have been accepted by the authorities. The question as to whether the offer for further mutilation of the goods could have been accepted would arise only in a case where the import is found to be bona fide and the matter only related to the extent of mutilation of the goods which had been imported. The appellant could not claim the benefit of the offer to have the goods to be further mutilated to avoid confiscation in the present case where it was found that there was a fraud in the entire process of import. The decision of this Court in Collector of Customs v. Swastika Woollen Industries (1990 (47) ELT 216 (SC) has, therefore, no application in the facts of the present case.

7. The appeal accordingly fails and is dismissed with costs. The costs are quantified at Rs 10,000.