2006 (7) TMI 373 - AT - Customs

Summary

Issues:
Import of second-hand capital goods, Confiscation of imported car, Valuation of the car

Import of Second-Hand Capital Goods:
The appellant, a registered tour operator, imported a used car and sought clearance under the Policy for second-hand capital goods. The appellant intended to surrender Special Import Licence (SIL) equivalent to 5 times the CIF value of the car. However, Customs authorities objected, stating that cars cannot be imported as second-hand capital goods without a specific license. The appellant argued that a car falls under the definition of machinery, which is covered under capital goods in the Import Policy. The objection was upheld, leading to confiscation of the car under Section 111(d) of the Customs Act and imposition of a penalty. The appellant was permitted to redeem the car on payment of a fine.

Confiscation of Imported Car:
The Customs authorities rejected the declared value of the car and determined it at a higher value based on the List Price of the manufacturer, trade discount, and depreciation. The appellant appealed against the confiscation of the car and the enhanced valuation. The Tribunal found no merit in the appellant's contentions, stating that while the Import Policy allows for the import of second-hand capital goods in general, specific restrictions apply to the import of vehicles by travel agents and tour operators. Import of motor vehicles is subject to limitations, and only certain categories are eligible within specified value limits. The Tribunal upheld the confiscation and valuation, as the import of motor vehicles is restricted, and the valuation was done in accordance with Customs practices.

Valuation of the Car:
The Tribunal, after hearing both sides and reviewing the records, affirmed that the import of motor vehicles is restricted under the Import Policy. The specific paragraphs in the Policy highlight restrictions on the import of vehicles by designated entities within defined value thresholds. The Tribunal concluded that the restriction on importing motor vehicles cannot be bypassed by general provisions related to machinery imports. The Tribunal upheld the valuation conducted by the revenue authorities, which included depreciation, as per Customs practices. The penalty on the appellant was reduced considering the circumstances, but the confiscation and valuation were upheld, confirming the impugned order.

In conclusion, the Tribunal dismissed the appeal regarding confiscation and valuation of the imported car, emphasizing the restrictions on importing motor vehicles and the valuation methodology followed by the Customs authorities. The penalty imposed on the appellant was reduced, but the overall decision regarding the confiscation and valuation was upheld.