2005 (5) TMI 507 - AT - Customs

Summary

Issues Involved:
1. Confiscation of the car under Section 111(d) and Section 111(m) of the Customs Act, 1962.
2. Valuation of the car and the differential duty demand.
3. Penalty imposition under Section 112(b) and Section 114(A) of the Customs Act, 1962.

Detailed Analysis:

1. Confiscation of the Car:
- Section 111(d): The car was imported in contravention of ITC Public Notice No. 202/92-97, dated 30-3-94. The Commissioner concluded that the car could not have been in Shri Mathew's possession since 1994 as it was imported into Dubai only in March 1995. Therefore, the car was liable for confiscation under Section 111(d) of the Customs Act for violating the ITC provisions.
- Section 111(m): The Commissioner initially held that the car was of 1995 make based on documentary evidence and thus liable for confiscation under Section 111(m) for misdeclaration. However, the appellant contested this, arguing the evidence was insufficient to prove the car was a 1995 model. The adjudicator found the submissions valid, and the car was determined to be of 1994 make based on physical examination and acceptance by Appraisers. Thus, the confiscation under Section 111(m) was not upheld.

2. Valuation and Differential Duty:
- The declared value of the car was rejected due to misdeclarations by the importer. The revised value proposed in the Show Cause Notice (SCN) was Rs. 11,41,520/-, which went uncontested by the appellants. Consequently, the differential duty of Rs. 5,32,004/- was demanded under Section 28 of the Customs Act, along with interest under Section 28AA. The appellant contested the valuation, but the adjudicator found the basis for valuation communicated to the notices was not disputed, thus upholding the revised valuation.
- However, since the car was determined to be of 1994 make, the order of valuation enhancement, duty demand, and interest based on the assumption of a 1995 model could not survive. The adjudicator set aside the valuation enhancement and related duty and interest demands.

3. Penalty Imposition:
- Section 112(b): The Commissioner found that the investigations did not suggest that S/Shri Nadir Ali, Afzal, Vinay, and Shri Gade had any knowledge that the car was smuggled. Therefore, no penalties were imposed on these individuals under Section 112(b) of the Customs Act.
- Section 114(A): The SCN proposed penal action under Section 114(A) on Shri K.C. Mathew, who was liable for differential duty due to suppression of material facts at the time of import. The Commissioner imposed a penalty equivalent to the short-levied duty amount of Rs. 5,32,004/- on Shri Mathew under Section 114(A).

Conclusion:
- The appeal was allowed, setting aside the order of enhancement of valuation, duty demand, interest demand, and confiscation under Section 111(m). Confiscation under Section 111(d) was upheld, but the redemption fine was reduced to Rs. 15,000/- based on similar precedents. The car was ordered to be released to the appellant upon payment of the reduced fine.