(1) If any goods are seized under section 76, the Commissioner may, by an order in writing, impose upon the transporter, carrier or transporting agent or any other person from whom such goods are seized or the owner of such goods, where particulars of the owner of such goods are available, or where there is no claimant of such goods at the time of such seizure, any person who subsequently establishes his claim of ownership or possession of such goods, after giving such transporter, carrier or transporting agent or person or owner, as the case may be, a reasonable opportunity of being heard, a penalty of an amount calculated on the basis of the percentage as specified in column (3) of the Table below, on the fair market value of such goods in respect of the nature of the seized goods as specified in column (2), against the corresponding serial number in column (1), of the said Table:-

Provided that where the Commissioner is satisfied that the seizure of goods has been made for any contravention due to clerical error in the form as may be prescribed under section 73, or section 81, as the case may be, furnished at the time of interception or search under section 74, except any material discrepancy in the description of goods or the quantity or weight or the value disclosed in such form, he may authorise imposition of penalty for an amount equivalent to five per centum of the fair market value of the seized goods or rupees twenty-five thousand, whichever is lower:

Provided further that where no form as may be prescribed under section 73, or section 81, as the case may be, is furnished even at the time of imposition of penalty under this section, the Commissioner may demand for payment of security for an amount equivalent to the amount of tax calculated on the basis of the rate of tax as specified under sub-section (2) of section 16, in respect of the sale of such goods on the fair market value of the seized taxable goods as may be determined by him in accordance with the rules made under this Act, notwithstanding the fact that no sale of such goods may be made or no tax may be payable subsequently on the sale of such goods:

Provided also that for the purpose of imposition of penalty for contravention of section 81, the provisions of this sub-section shall, mutatis mutandis, apply:

Provided also that the provisions of this section shall be applicable in respect of any penalty imposed on or after the 1st day of April, 2012, irrespective of the date of seizure under section 76.

(2) A penalty imposed under sub-section (1) shall be paid by the transporter, carrier or transporting agent or the person or the owner of goods, as the case may be, into an appropriate Government Treasury, by such date as may be specified by the Commissioner in a notice to be issued for this purpose, and the date so specified shall not be earlier than fifteen days from the date of the notice:

Provided that the Commissioner may, upon application made by that transporter, carrier or transporting agent or the person or the owner of goods, as the case may be, for reasons to be recorded in writing, extend the date of payment of the penalty for such period as he may think fit.

(3) The goods seized under section 76 shall be released in the prescribed manner on payment of the penalty imposed under subsection (1) along with submission of proof of payment of security, if any, demanded under sub-section (1).

(4) If the penalty is not paid by the date specified in the notice issued under sub-section (2), the Commissioner may, in such manner and subject to such restrictions and conditions as may be prescribed, sell the goods so seized under section 76 in open auction and remit the sale proceeds thereof to a Government Treasury.

(5) Notwithstanding anything contained in sub-section (3),-

(a) the person to whom the Commissioner has, under sub-section (4) of section 3, delegated his power for revision under section 86, pending disposal of an application for revision against an order for imposition of penalty referred to in sub-section (1), or

(b) the Commissioner, where there is no application for revision under section 86,

may, for reasons to be recorded in writing, direct release of the goods seized under section 76 on such terms and conditions as he may deem fit.

(6) Notwithstanding anything contained in sub-section (4), the Commissioner may, subject to such rules as may be made under this Act, where the goods seized under section 76 are-

(a) of perishable nature, or

(b) required to be used by a specified date,

sell such goods in open auction after the expiry of such period as he may consider fit and proper, if he is of opinion that such goods may become unusable or unusable on detention, or destroy such goods if the said goods become unusable before the sale in open auction actually takes place.

(7) The proceeds of sale of the goods referred to in sub-section (4) or sub-section (6) shall be applied in the prescribed manner for payment in the following order of priority:-

(a) first, for incidental charges, if any, relating to auction sale of such goods;

(b) secondly, for expenses, if any, for storage of such goods;

(c) thirdly, for penalty imposed under sub-section (1);

and the balance of the proceeds of sale, if any, shall be paid to the owner of the goods or, if his particulars are not available, to the persons from whom such goods were seized under section 76, upon application within one year from the date of sale or within such further period as may be allowed by the Commissioner for cause shown to his satisfaction.