SANJAY DATTATRAYA ROKHALE Vs. COMMISSIONER OF CUSTOMS (IMPORT)

JUDGEMENT

(1.) BRIEF facts of the case are that based upon a specific intelligence, Directorate of Revenue Intelligence initiated investigation in September, 2008, in to fraudulent imports of high end cars/SUVs. It was collected that one person with name Mr. Rehman Shaikh (Appellant No. 2) was involved in smuggling racket, accordingly, his office and residential premises were searched and incriminating documents were recovered. It was found that he was involved in fraudulent import of 36 vehicles in the name of third parties. The vehicles imported were generally used vehicles and were declared as new vehicles at the time of clearance from the Customs. One of the vehicles so imported was a 'New Audi R8 4.2 coupe'. The said vehicle was imported in the name of Appellant No. 1. Copy of Passport of Appellant No. 1, invoice, Bill of Lading, type Approval Certificate, PAN card etc. were recovered. The Bill of Entry No. 963210 dated 18.8.2008 was filed. The Custom House ordered for first check examination. The value declared in the Bill of Entry for the said vehicle was GBP 42,000/ -. The initial investigation indicated that both the value as also the condition of the vehicle i.e. new instead of old were mis -declared and Appellant No. 1 in whose name the car was imported was not the real owner and he has lent his name for monetary consideration to Appellant No. 2. Appellant Nos. 3, 4, 5 were CHA, persons connected with filing of B/E etc. Based upon the investigation, show cause notice was issued to all the five appellants and the impugned order came to be issued. In the impugned order, the declared value of Rs. 35,53,200/ - was rejected and the car was valued at Rs. 54,95,616/ -. Since the vehicle was found to be old, the benefit of Notification No. dated 1.3.2002 was also denied. Further, the car was confiscated under Sec. 111(d) & Sec. 111(m) of the Customs Act, 1962. No option to redeem the car was extended. Further a penalty of Rs. 3 lakhs each was imposed on the Appellant No. 1 & 2 under Sec. 112(a) and 114AA of the Customs Act, 1962. Further, penalty of Rs. 1 lakh each was imposed on Appellant No. 3 & 4. Further, penalty of Rs. 50,000/ - was imposed on Appellant No. 5. Aggrieved by the said order, the appellants are before us.

(2.) THE main contention of the Appellant No.(1) is that the value has been incorrectly arrived at. According to the appellant, the value should have been determined based upon the price at which the original manufacturer in Germany is exporting similar car to the dealers in India. According to the appellant, the value of such car imported by the dealers is on record and that should have been taken and it is not correct on the part of the adjudicating authority to take value of the contemporary imports and decide the value based upon that. Ld. advocate for the appellant also stated that they have quoted a number of judgments during the adjudication proceedings and one judgment of the Hon'ble Supreme Court in respect of Eicher Tractors Ltd was quoted by them and the Commissioner has distinguished the judgment on the ground that that case pertains to old Customs Valuation Rules and not to the new Customs Valuation Rules. The other contention of the Appellant No. 1 is that the evidence has been collected from M/s.Audi, Mumbai who are the interested party in as much as they are also importing the similar car and selling and hence the evidence given by them can not be relied upon. Another contention of the ld. advocate was that there is no reason to absolutely confiscate the vehicle as the cars are freely importable and only prohibited goods can be confiscated absolutely. According to the ld. advocate the list of prohibited goods is specifically given in the Import Policy and cars are not falling under the said list. He also relied upon the judgement in the case of Yakub Ibrahim Yusuf vs. CC, Mumbai, 2011(263) ELT 685 (Tri -Mumbai) relating to confiscation. The appellant also stated that it is incorrect to consider the import as non bonafide import as the Bill of Entry is filed in his name as the owner of the goods. No other person is claiming the ownership of the car and therefore, there is no reason to doubt the ownership. Ld. advocate also argued that appellant No. 2 was an authorized Customs House Agent earlier and he used to take responsibility to handle customs related activity. When the appellant No. 1 imported the cars, he took the help of the Appellant No. 2 and Appellant No. 2 cannot be held as the owner of the vehicle. Ld. advocate further stated that the department (in the Writ petition No. 2426 of 2012 filed before the Hon'ble Mumbai High Court) stated that disposal order for the said car has been given. Ld. advocate also stated that he did not object to the disposal of the car as the market price taken was on higher side. Ld. advocate further stated that on taking up about the disposal of car under RTI, he has been informed that as per the available records, the car mentioned in the application is not auctioned by the disposal section. Ld. advocate stated that thus the department is taking contrary stand one before the Hon'ble High Court and other in pursuance of the RTI.

(3.) APPELLANT Nos. 3 & 4 have stated that they were working as Customs House Agents and Appellant No. 2 used to give documents and they were only clearing the cars. They had no knowledge that value of such cars has been mis -declared or the condition of the car has been mis -declared and in any case that all such cars have been cleared after first check examination. In view of this, no penalty is imposable under Sec. 112(b) and 114AA of the Customs Act, 1962 on them.