2010 (10) TMI 169 - HC - Customs

Question of Law - Ownership of vehicles - Whether on the facts and circumstances of the case and in law, the Tribunal erred in holding that the post importation condition of no sale for a period of 2 years - Initially the order of confiscation and penalty was set aside by the Tribunal - Held that The order of the Tribunal also suffers from nonapplication of mind since the Tribunal has 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. In the totality of the circumstances, the Tribunal ought to have used its common sense that a person working as carpenter/labourer in Dubai could not have owned or imported vehicle, that too from Japan, especially, in the light of his statement recorded under section 108 of the Act; wherein he has clearly admitted that his passport was misused by someone. It was clearly an attempt on the part of the Tribunal to adopt perverse approach. - Question of law framed is answered in favour of the Revenue and against the Assessee

Summary

Issues:
1. Interpretation of the postimportation condition of "no sale for a period of 2 years" stipulated in the Public Notice.
2. Determination of ownership requirement for importing a vehicle under the Customs Act, 1962.

Issue 1: Interpretation of the postimportation condition:
The appeal was filed by the appellantRevenue challenging the Tribunal's decision regarding the interpretation of the postimportation condition of "no sale for a period of 2 years" stipulated in the Public Notice. The Tribunal held that the importer did not need to be the owner of the vehicle during his stay abroad or after importation in India. However, the Court disagreed, emphasizing that the condition implied ownership, as the right to sell the vehicle after two years necessitates the person to be the owner or title holder. The Court supported the Commissioner (Appeals)'s findings that ownership was a crucial requirement, citing the cancellation registration certificate of the vehicle and the statement of the importer as corroborative evidence.

Issue 2: Determination of ownership requirement for importing a vehicle:
The Customs found discrepancies in the importation of a Toyota Cynos car under transfer of residence, leading to a show cause notice and subsequent confiscation of the vehicle. The Commissioner (Appeals) upheld the decision, stating that the importer must be the owner of the vehicle for two years during his stay abroad and two years after importation in India. However, the Tribunal overturned this decision, asserting that ownership proof during the stay abroad was not necessary. The Court criticized the Tribunal's view as perverse, highlighting the importance of ownership for selling the vehicle post two years and the duty payment requirement. The Court quashed the Tribunal's decision, restoring the original orders and ruling in favor of the Revenue.

In conclusion, the judgment clarified the ownership requirement for importing a vehicle under the Customs Act, emphasizing the significance of ownership for selling the vehicle post two years. The Court overturned the Tribunal's decision, reinstating the original orders and directing the Revenue to take custody of the vehicle and recover the fine.