2015 (4) TMI 1198 - AT - Customs

Whether the learned Commissioner (Appeals) have rightly confirmed the Order-in-Original wherein Toyota Alphard vehicle imported vide Bill of Lading dated 01/08/2008, having invoice value of ₹ 6,82,560/- was confiscated under Section 111 (d) of the Customs Act, 1962, absolutely and further penalty was imposed on the appellant - M/s Zubair Ahmed ₹ 50,000/under Section 112(a) of the Customs Act, 1962 along with penalty of ₹ 50,000, on one, Shri Rehman Shaikh also under Section 112(a) the Customs Act, 1962? Held that - the appellant-Shri Jubair Ahmed was only a name lender for monetary consideration. He was the employee of the said Shri Rehman Shaikh. Under the facts and circumstances that the appellant was a person of small means having monthly income of about ₹ 20,000/ only, and evidently all steps for import, etc. were taken by the said Shri Rehman Shaikh. The said Shri Rehman Shaikh is held to be the actual importer. Further, it is evident from the finding of the courts below that the said Shri Rehman Shaikh has resorted to mis-declaration by importing a used vehicle in the guise of a new vehicle. Accordingly, in view of the violation of the provisions of Section 7 of Foreign Trade Development Regulations Act, 1992 read with Rule 2(c), & 12 of Foreign Trade (Regulations) Rules, 1993 and Para 2.12 of the Foreign Trade Policy and also taken notice of the contumacious fraud committed by the said Shri Rehman Shaikh by importing a prohibited vehicle (second hand vehicle and/or used vehicle), the absolute confiscation of the vehicle in question is upheld. - Since the importer have been made in contravention of the import value policy and licensing note, the impugned vehicle clearly falls within the category of prohibited goods as defined under Section 2(33) of the Customs Act, 1962 and as such was liable to confiscation under Section 111 (d) of the Customs Act, 1962 and liable to be absolutely confiscated under the provisions of Section 125 of the Customs Act, 1962 Appeal dismissed - decided against appellant.

Issues Involved:
1. Confiscation of the imported Toyota Alphard vehicle under Section 111(d) of the Customs Act, 1962.
2. Imposition of penalties under Section 112(a) of the Customs Act, 1962 on M/s Zubair Ahmed and Shri Rehman Shaikh.
3. Allegations of fraudulent import practices and mis-declaration.
4. Legal standing and involvement of the appellant M/s Zubair Ahmed.
5. Applicability of Section 125 of the Customs Act, 1962 regarding the option to redeem confiscated goods.

Detailed Analysis:

1. Confiscation of the Imported Toyota Alphard Vehicle:
The primary issue was whether the confiscation of the Toyota Alphard vehicle imported by M/s Zubair Ahmed was justified under Section 111(d) of the Customs Act, 1962. The vehicle, imported via Bill of Lading dated 01/08/2008, was found to be in violation of the import policy as it was over three years old from the date of manufacture, which contravenes the conditions stipulated in the import licensing notes. The vehicle was seized as it was believed to be liable for confiscation under the Customs Act, 1962.

2. Imposition of Penalties:
Penalties of Rs. 50,000 each were imposed on M/s Zubair Ahmed and Shri Rehman Shaikh under Section 112(a) of the Customs Act, 1962. The penalties were based on the involvement of both parties in the importation of the vehicle, which was done in violation of the import policy and through fraudulent means.

3. Allegations of Fraudulent Import Practices and Mis-Declaration:
The investigation revealed that Shri Rehman Shaikh was involved in fraudulent import practices, including mis-declaration of vehicle conditions to evade higher duties. The modus operandi involved declaring old vehicles as new to benefit from lower duties and mis-declaring high-end vehicles as low-end ones. The Toyota Alphard was imported as a used vehicle but was declared otherwise to avoid the higher duty applicable to used cars.

4. Legal Standing and Involvement of M/s Zubair Ahmed:
M/s Zubair Ahmed was found to be a name lender for monetary consideration and not the actual importer of the vehicle. Zubair Ahmed's involvement was limited to providing his documents to Shri Rehman Shaikh, who orchestrated the import. The tribunal held that Zubair Ahmed was a person of small means and was only used as a front by Shri Rehman Shaikh, who was the actual importer.

5. Applicability of Section 125 of the Customs Act, 1962:
The appellant argued that as per Section 125 of the Customs Act, 1962, they should have been given the option to redeem the vehicle on payment of a fine. However, the tribunal upheld the absolute confiscation of the vehicle, noting that the import was in violation of the import policy and constituted prohibited goods under Section 2(33) of the Customs Act, 1962. The tribunal referenced previous rulings, including the case of Harinder Singh, to support the decision that the vehicle was liable for absolute confiscation without an option for redemption.

Conclusion:
The tribunal dismissed the appeal, upholding the confiscation of the Toyota Alphard vehicle and the penalties imposed on M/s Zubair Ahmed and Shri Rehman Shaikh. The judgment emphasized the fraudulent nature of the import and the mis-declaration practices employed, affirming the actions taken under the Customs Act, 1962. The tribunal found no merit in the appellant's arguments and confirmed the lower authorities' orders.

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