2005 (6) TMI 544 - AT - Customs

Summary

Issues:
1. Misdeclaration of value and confiscation of cars based on correct value and duty rate.
2. Confiscation and penalties imposed on importers for misdeclaration of engine capacity.
3. Role of Shri Sadiq Futehally in misdeclaration and evasion of duty.
4. Applicability of penalties under Section 112 of the Customs Act.

Issue 1: Misdeclaration of value and confiscation of cars based on correct value and duty rate

The judgment pertains to cases involving the import of Audi 80 Cars from M/s. Volkswagen, Germany, where discrepancies were found in the declared engine capacity and purchase price. Investigations revealed that the actual cubic capacity of the engines exceeded the declared capacity. The import policy allowed cars to be imported only by NRIs who had paid for the cars from their earnings abroad. Show cause notices were issued proposing re-assessment of the cars based on their correct value and duty rate. The appeals arose from confiscation orders issued by the Collector of Customs, Nhava Sheva, based on misdeclaration of assessable value. The Tribunal upheld the confiscation and fines imposed on the importers for undervaluation, rejecting claims based on tourist price lists and export price lists. The judgment detailed discrepancies in equipment and pricing, affirming the confiscation and penalties, thereby dismissing the appeal related to Shri Mukesh K. Aggarwal.

Issue 2: Confiscation and penalties imposed on importers for misdeclaration of engine capacity

The judgment addressed cases where importers, including Shri S.K. Jolly, Shri Kadri Aminuddin, and Dr. Y. R. Kher, faced confiscation of Audi 80 cars due to misdeclaration of engine capacity. The Commissioner upheld the valuation based on the export price list but confirmed misdeclaration of engine capacity and trading in CCPs by Shri Sadiq Futehally. The evidence included seized files, statements, and test reports indicating misdeclaration of engine capacity. The judgment highlighted the discrepancies in engine capacity declarations and the role of Shri Futehally in evading duty. The Tribunal upheld the penalties imposed on Shri Futehally, dismissing the appeals against penalties and confiscation, emphasizing the misdeclaration of engine capacity and duty evasion.

Issue 3: Role of Shri Sadiq Futehally in misdeclaration and evasion of duty

Shri Sadiq Futehally was found to have a significant role in misdeclaration and evasion of duty concerning the import of Audi 80 cars. The judgment detailed how Shri Futehally organized and managed the imports, including trading in CCPs and misdeclaration of engine capacity. Evidence such as seized files, statements, and test reports implicated Shri Futehally in orchestrating the evasion of duty through misdeclaration. The Tribunal upheld the penalties imposed on Shri Futehally, emphasizing his key role in the misdeclaration and evasion of duty, leading to the dismissal of his appeals against penalties and confiscation.

Issue 4: Applicability of penalties under Section 112 of the Customs Act

The judgment analyzed the applicability of penalties under Section 112 of the Customs Act in cases involving misdeclaration and evasion of duty. It affirmed the penalties imposed on importers and Shri Futehally for their roles in misdeclaration of engine capacity and evasion of duty. The Tribunal upheld the penalties based on the concerted action between Shri Futehally and M/s. Volkswagen, Germany, in misdeclaring the engine capacity, leading to duty evasion. The judgment cited previous Tribunal orders to support the imposition of penalties under Section 112, ultimately dismissing all appeals and affirming the penalties and confiscation orders.