2008 (4) TMI 662 - AT - Customs

Summary

Issues:
1. Demand of duty and penalty against the appellant.
2. Penalty against the Managing Director of the company.
3. Non-fulfilment of actual user condition for import of a Mercedes Benz Car under EPCG license.
4. Grounds of non-registration of the vehicle as a tourist taxi.
5. Challenge regarding the imposition of the condition by the licensing authority.
6. Clearance of the vehicle against the production of a bank guarantee.
7. Payment of duty under Customs Notification No. 97/2004.
8. Waiver of predeposit and stay of recovery for penalties and balance duty amount.

Analysis:
The appeal before the Appellate Tribunal CESTAT, CHENNAI revolves around the demand of duty amounting to over Rs. 28.00 lakhs and a penalty of Rs. 2.00 lakhs against the appellant, in addition to a penalty of Rs. 1.00 lakh against the Managing Director of the company. The case pertains to the import of a Mercedes Benz Car by the assessee under an EPCG license dated 23-12-2005, cleared for home consumption under Customs Notification No. 97/2004 dated 17-9-2004. The issue of non-fulfilment of the actual user condition and non-registration of the vehicle as a tourist taxi are central to the dispute.

Upon examining the records and hearing arguments from both sides, the Tribunal notes the grounds on which duty was demanded, including the alleged non-fulfilment of the actual user condition and non-registration as a tourist taxi. The appellants contend that the registration of the motor vehicle as a tourist taxi was not a requirement under the relevant Foreign Trade Policy and was unlawfully imposed by the licensing authority. This contention forms a significant part of the challenge presented in the case.

The Tribunal observes that the so-called 'illegal condition' imposed by the licensing authority was not contested by the party before the competent authority under the Foreign Trade (Development and Regulations) Act, 1992. However, it is noted that the clearance of the vehicle was permitted upon the production of a bank guarantee amounting to Rs. 40.00 lakhs, with an additional duty payment of Rs. 2.00 lakhs under Customs Notification No. 97/2004 dated 17-9-2004. Considering the adjudged dues to be less than the bank guarantee amount, the Tribunal decides on the waiver of predeposit and a stay of recovery concerning the penalties and the remaining duty amount.

In conclusion, the Tribunal's decision provides relief to the appellants by waiving the predeposit requirement and staying the recovery process for penalties and the balance duty amount, based on the circumstances and findings of the case.