Under following circumstances, fine could be paid in lieu of confiscation of goods or conveyance:
the officer adjudging the matter shall give to the owner of the goods an option to pay a fine in lieu of confiscation. The fine shall not exceed the market value of the goods confiscated, less the tax chargeable thereon
where owner of goods is not known, such option could be given to the person from whose possession or custody such goods have been seized; The aggregate of such fine and penalty leviable shall not be less than the amount of penalty of 100% of the tax (if paid by owner) or 50% of the value of goods less tax (where it is paid by person other than owner in terms of Section 129(1))
In case where conveyance is confiscated, and such conveyance is used for the carriage of the goods or passengers for hire, the owner of the conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine equal to the tax payable on the goods being transported thereon.
Where any fine in lieu of confiscation of goods or conveyance is imposed, the person (owner or other person) shall be liable to pay any tax and charges
payable in respect of such goods in addition to the fine
(ICAI FAQ PUBLICATIONS 06-09-2017 Confiscation of goods and/or conveyances and levy of penalty: FAQ NO. 21)