2015 (3) TMI 1082 - AT - Customs

Confiscation of car - car had been imported in violation of the provisions of Public Notice No. 3PN/1997-02 dated 31.3.1997 - Misdeclaration of manufacturer - Undervaluation - Held that - It is a settled matter that the duty cannot be jointly demanded from the appellant as well as Shri Sudhakar Bhoja. In any case duty can only be demanded from the importer in terms of Section 28AB of the Customs Act as held by the Hon ble High Court of Bombay in the case of VXL India Ltd. which decision was affirmed by the Hon ble Supreme Court. Further, it has been held by the Karnataka High Court in the case of Five Star Shipping Co. Ltd. that redemption fine cannot be demanded from the purchaser of the car even if the car is undervalued. It is the original importer who is to pay the difference of the duty. - appellant was a bona fide purchaser whose only interest was to possess a car. The contravention of Public Notice No. 3PN/1997-02 is not established. We fail to understand how the Commissioner invoked the restriction of no sale for two years from the date of importation whereas the Public Notice clearly stipulates that the importer is free to sell the car in the open market after his return to India without any restriction. In the circumstances of the case, we find no reason to doubt the bona fide of the appellant. - Decided in favour of assessee.

Summary

Issues:
1. Appeal against confiscation of car and imposition of fines and penalties under Customs Act.
2. Succession in interest for appeal proceedings.
3. Confiscation of car due to alleged violations.
4. Joint demand of duty from multiple persons.
5. Liability of duty and redemption fine on actual importer.
6. Penalty on purchaser for lack of awareness.
7. Adjudication of penalties by Commissioner.
8. Bona fide purchase and contravention of Public Notice.

Analysis:
1. The appellant appealed against the order of confiscation of a car by the Commissioner of Customs, which imposed a redemption fine, differential duty, and penalties under the Customs Act. The appellant sought to continue the appeal proceedings after the demise of the original applicant, which was allowed by the Tribunal after the successor filed an application under Rule 22 of the CESTAT (Procedure) Rules, providing necessary documents.

2. The case involved the purchase of a Toyota Car in 1999, which was later seized by DRI Officers citing violations related to importation and undervaluation. The appellant claimed innocence, stating the transaction was conducted through another individual. The show cause notice led to confiscation, redemption fine, additional duty demand, and penalties on the original importer and others.

3. The Tribunal heard arguments from both sides, with the appellant's counsel contending that duty should only be demanded from the actual importer, citing legal precedents. The counsel also argued against the redemption fine and penalties on the purchaser, emphasizing lack of awareness regarding the car's details and import restrictions.

4. The Tribunal agreed with the appellant's contentions, stating that duty cannot be jointly demanded from multiple parties, and must be levied on the importer as per Customs Act provisions and relevant court decisions. Redemption fine was deemed payable by the original importer, not the purchaser, as established by legal precedents cited during the proceedings.

5. The Tribunal found the appellant to be a bona fide purchaser, highlighting the absence of evidence supporting contravention of importation restrictions. It was noted that the Commissioner's invocation of a two-year sale restriction was unfounded, as per the Public Notice guidelines permitting open market sale post-importation. Consequently, the Tribunal set aside the duty demand, redemption fine, and penalties imposed on the appellant, allowing the appeal with any necessary consequential relief.