2003 (1) TMI 600 - AT - Customs

Confiscation and penalty - Car - Search and seizure - Redemption fine not imposable when goods not liable to confiscation

Summary

Issues Involved:
1. Legality of the importation of the Mercedes Benz car by Dr. Pillai.
2. Validity of the statements and retractions made by Dr. Pillai and her husband.
3. Involvement and liability of Alex C. Joseph in the importation process.
4. Confiscation of the car and imposition of penalties under the Customs Act, 1962.

Detailed Analysis:

1. Legality of the Importation of the Mercedes Benz Car by Dr. Pillai:
The primary issue revolves around whether Dr. Pillai legally imported the Mercedes Benz car under the Transfer of Residence benefit per the Baggage Rules. The Commissioner concluded that the car was not owned or possessed by Dr. Pillai for the required period and was imported using false documents, thus violating the Import Trade Control Public Notice and the Customs Act. However, Dr. Pillai provided documents indicating the car was sent to the UK for repairs and had been in use for over a year before importation. The tribunal found these documents credible and concluded that the importation did not contravene the ITC Public Notice, thus negating the grounds for confiscation under Section 111(d) and (m) of the Customs Act.

2. Validity of the Statements and Retractions:
Dr. Pillai's statement under Section 108 of the Customs Act, which admitted to not owning the car, was pivotal. The Commissioner dismissed her retraction, considering the statement was made at her residence, implying it was voluntary. However, the tribunal noted the lack of corroboration, particularly the absence of a statement from the alleged intermediary, Mohan. The tribunal found the retraction plausible and the initial statement insufficient to establish the entire truth, thus undermining the basis for the car's confiscation and penalties.

3. Involvement and Liability of Alex C. Joseph:
The Commissioner identified Alex C. Joseph as the mastermind behind the illegal importation, based on Dr. Pillai's and her husband's statements and the recovery of Dr. Pillai's passport photocopy from Alex's sister's residence. The tribunal, however, questioned the credibility of the evidence, particularly the circumstances of the midnight search and the lack of a statement from Alex. The tribunal concluded that advising on the import did not inherently imply liability for confiscation or penalties under the Customs Act.

4. Confiscation of the Car and Imposition of Penalties:
The Commissioner ordered the car's confiscation under Sections 111(d) and 111(m) of the Customs Act, with an option for redemption on payment of a fine, and imposed a penalty on Dr. Pillai and Alex. The tribunal overturned these orders, finding no substantive evidence of misdeclaration or violation of the ITC Public Notice. Consequently, the tribunal ruled that neither the car was liable for confiscation nor were Dr. Pillai and Alex liable for penalties under Section 112(a) of the Customs Act.

Conclusion:
The tribunal set aside the Commissioner's orders, allowing the appeals by Dr. Pillai and Alex. The tribunal's decision was based on the credibility of the documents provided by Dr. Pillai, the questionable validity of the statements and retractions, and the insufficient evidence against Alex C. Joseph. The tribunal concluded that the importation complied with the ITC Public Notice and the Customs Act, negating the grounds for confiscation and penalties.