2010 (2) TMI 1025 - AT - Customs

Absolute Confiscation - import of car - actual importer - Absolute confiscation has been ordered on the ground that appellant is not the owner of the car as he could not afford such a costly vehicle but merely lent his name for importation of the car. Held that - In the absence of any stipulation in the Import Policy regarding financial condition of the importer it is not for the adjudicating authority to question the financial wherewithal of the importer. The absolute confiscation is therefore not warranted in the present case and we accordingly set it aside. The order of absolute confiscation is converted into an order of confiscation with an option of redemption of the vehicle. The quantum of fine and penalty imposed should be re-determined by the adjudicating authority within a period of 3 months from the receipt of this order and on extending a reasonable opportunity to the importer of being heard. Appeal allowed.

Summary

Issues:
Violation of Licensing Note 2(II)(a)(iv) to Chapter 87 of the ITC (HS) Classification of Export and Import by importing a new vehicle from a country other than the manufacturer.
Non-compliance with the conditions stipulated in Licensing Note 2(ii)(C) regarding testing and certification of new vehicles at the time of importation.
Questioning the financial status of the importer as a basis for absolute confiscation.

Analysis:
The Commissioner of Customs ordered absolute confiscation of a brand new Hummer H2 motor car imported by the appellant under the provisions of the Customs Act, 1962 due to violations of Licensing Note 2(II)(a)(iv) and non-compliance with Licensing Note 2(ii)(C). The car was imported from Thailand instead of the USA, where it was manufactured, and the importer failed to produce the required Type Approval Certificate. The confiscation was also based on the assumption that the appellant, a machine operator in Sharjah, could not afford such an expensive vehicle and merely lent his name for importation.

During the hearing, the importer acknowledged the violations but requested the release of the car upon payment of a fine, arguing that the importer's financial status should not be a determining factor. The opposing view highlighted concerns about potential illicit activities like Hawala transactions and money laundering involving importers used as fronts for vehicle importation.

The Tribunal considered the absence of any requirement in the Import Policy regarding the importer's financial capacity and concluded that absolute confiscation was unwarranted. The order was modified to allow confiscation with an option for redemption of the vehicle. The Tribunal directed the re-determination of the fine and penalty within three months, providing the importer with a fair opportunity to present their case.

Ultimately, the appeal was allowed, and the order of absolute confiscation was overturned in favor of a confiscation order with redemption options, subject to a reassessment of fines and penalties by the adjudicating authority.