2007 (3) TMI 125 - AT - Customs

Valuation of used imported car - Valuation after rejection of transaction value is not acceptable where department failed to prove that invoices produced by the importer have been forged or the assessee has paid more money than indicated in the invoices

Summary

Issues:
1. Violation of ITC Policy regarding possession period for imported car.
2. Valuation of the imported car for customs purposes.

Analysis:
1. Violation of ITC Policy:
The appellant imported a Toyota Soarer Car declared as a 2003 model without complying with the requirement of possessing the car for at least one year prior to import, as per the ITC Policy. The customs officers found that the car was used but reconditioned with certain replacements and modifications. The Original Authority held the car liable for confiscation under Section 111(d) of the Customs Act, 1962. The appellant contested the decision, arguing that the transaction value should not be rejected without valid reasons. The Tribunal upheld the confiscation due to the violation of the possession condition.

2. Valuation of the Imported Car:
Regarding the valuation of the imported car, the appellant presented an invoice from Cougar Motors FZCO indicating a transaction value of US $20,500 for a 2003 model car. The Revenue did not provide grounds for rejecting the transaction value, and there was no evidence of forgery. The Tribunal referred to various legal precedents, including Eicher Tractors Ltd. v. CC, which emphasized accepting the actual price paid unless specific exceptions apply. The Tribunal found no justification for rejecting the transaction value and directed assessment based on the declared value with adjustments as per the law.

3. Penalties and Fines:
The appellant raised concerns about the penalties imposed, arguing that the import was for personal use without profit motive. The Tribunal reduced the redemption fine to Rs. 1,00,000 and the penalty to Rs. 50,000. However, demurrage issues were not addressed in the appeal, and the appellant was advised to seek remedies through appropriate channels. The Tribunal allowed the appeal with the revised fines and penalties, emphasizing compliance with the valuation rules and the possession conditions under the ITC Policy.

In conclusion, the Tribunal upheld the confiscation of the imported car due to the violation of the possession period requirement under the ITC Policy. However, it directed the valuation assessment based on the declared transaction value, emphasizing the importance of following legal precedents in customs valuation matters. The penalties and fines were reduced, and the appellant was advised to address demurrage concerns separately through appropriate authorities.