2010 (7) TMI 353 - AT - Customs

Car import transfer of residence Post import conditions - car was confiscated at the time of its import for violation of Condition enumerated in serial (a) of Clause of Condition No. 3 that the importer was not having the possession of the car for one year abroad before coming to India - condition of post import that the vehicle shall not be sold for two years not applicable on the importer - penalties are imposed it means that the respondents are not availing of the TR concessions which enable them to import the car without obtaining licence - conditions of No Sale need not insisted upon

Summary

Issues:
Imposition of penalties under Section 112(b) of the Customs Act, 1962 on multiple possessors of a car imported under the Transfer of Residence scheme for violation of conditions, including the 'no sale' condition within two years of import.

Analysis:

1. Violation of Import Conditions:
The case involved penalties imposed on appellants for dealing with a car imported under the Transfer of Residence scheme within two years of its import, violating the 'no sale' condition. The car was initially imported by an individual who did not possess it for the required period abroad. The subsequent possessors, including the appellants, were alleged to have knowingly taken possession of the car within two years of import, breaching the EXIM Policy.

2. Appellants' Defense:
The appellants argued that they were not aware of the 'no sale' condition as the car was confiscated and redeemed upon initial import for a different violation. They contended that since they were not availing Transfer of Residence concessions, the penalties for violating the 'no sale' condition were unjustified. They relied on a precedent where penalties were not imposed when TR concessions were not availed.

3. Revenue's Position:
The Revenue contended that the 'no sale' condition applied as per the Import Licensing Note, and the penalties were rightly imposed on the appellants for knowingly dealing with the car within two years of import. They argued against the applicability of the precedent cited by the appellants, asserting that the interpretation of law in that case was incorrect.

4. Tribunal's Decision:
After examining the Import Licensing Note and relevant provisions, the Tribunal found that the penalties on the appellants were unwarranted. The Tribunal agreed with the precedent cited by the appellants, stating that since the importer had already paid fines and penalties for the initial violation, the 'no sale' condition did not apply to subsequent possessors. Therefore, the impugned order imposing penalties was set aside, and all appeals were allowed.

In conclusion, the Tribunal ruled in favor of the appellants, holding that the penalties for violating the 'no sale' condition within two years of import were not justified in this case. The decision was based on the interpretation of the Import Licensing Note and the precedent where penalties were not imposed when TR concessions were not availed.