2010 (10) TMI 144 - HC - Customs

Confiscation Car import Transfer of Residence - condition that no person entitled to sell the vehicle imported while coming to India for permanent settlement after two years continuous stay abroad pregnant with the condition that such person must be a owner or title holder of the vehicle - right to sell vehicle after expiry of two years contemplates transfer of title arising from the transaction of sale and purchase - Tribunal holding that it was not necessary for the importer to prove his ownership or title to the vehicle during his stay abroad and that he need not be the owner of the vehicle for next two years after importation thereof during stay in India - Tribunal suffers from non-application of mind since the Tribunal directed release of vehicle after collection of duty assessed thereon forgetting the fact that as per the public notice, payment of full duty was a condition precedent and that the duty was duly paid by the importer Order unsustainable

Summary

Issues:
Interpretation of post-importation conditions under the Customs Act, 1962 regarding ownership of imported vehicles.

Analysis:
The case involved an appeal by the Revenue under the Customs Act against an order passed by the Customs Excise and Service Tax Appellate Tribunal. The main issue was whether the post-importation condition of "no sale for a period of 2 years" implied that the importer should be the owner of the vehicle, as stipulated in a Public Notice. The respondent had imported a Toyota Cynos car under transfer of residence, claiming benefits under the Public Notice. However, discrepancies were found in the registration details of the vehicle, leading to a show cause notice being issued by the Customs. The Joint Commissioner of Customs held that the respondent was not entitled to the benefits and ordered confiscation of the vehicle with penalties imposed.

The Commissioner of Customs (Appeals) upheld the order, but the Tribunal allowed the appeal, setting aside the confiscation and penalties. The Tribunal held that it was not necessary for the respondent to prove ownership or possession of the vehicle during his stay abroad, contrary to the findings of the Commissioner. The High Court, upon hearing arguments from both sides, found the Tribunal's decision to be perverse and unsustainable. The Court emphasized that the condition of "no sale for 2 years" implied ownership by the importer, and the Tribunal's view was against public policy and the intent of the Public Notice. The Court also criticized the Tribunal for directing the release of the vehicle without considering the duty payment conditions and the respondent's statement regarding the misuse of his passport.

In conclusion, the High Court allowed the appeal, quashed the Tribunal's order, and restored the original orders for confiscation and penalties. The Court ruled in favor of the Revenue, emphasizing the importance of ownership in meeting the post-importation conditions for imported vehicles under the Customs Act. The Court appreciated the assistance of the Amicus Curiae and directed immediate steps for the custody of the vehicle and recovery of fines.