2011 (3) TMI 275 - AT - Customs

Transfer of Residence Rules - Permitted to clear the goods for home consumption - The Hon ble High Court s judgment in Commissioner of Customs (Imports) Vs. Ganji Mallaiah (2010 -TMI - 202210 - BOMBAY HIGH COURT), wherein it was inter alia held to the effect that it was necessary for the importer to prove his ownership or title to the vehicle for the period of his stay abroad - The respondent satisfied the requirement of having to possess the vehicle for not less than one year abroad for the purpose of claiming clearance of the vehicle under TR Rules - The appellant has not made out a formidable case for re-export of the vehicle at this distant point of time - It is yet to be shown as to in what manner the vehicle, if permitted to be cleared for home consumption, would be hazardous to this country - The appellate Commissioner s order allowing clearance of the goods for home consumption is fair and just in the facts

Summary

Issues:
1. Eligibility of the respondent to clear goods for home consumption under Transfer of Residence Rules.
2. Dispute regarding clearance for home consumption versus re-export.
3. Ownership requirement for clearance under TR Rules.
4. Interpretation of relevant Import License Notes.
5. Justification for allowing clearance for home consumption.

Issue 1:
The judgment revolves around the eligibility of the respondent to clear a Motor Bike of German origin for home consumption under the Transfer of Residence Rules. The adjudicating authority had initially denied clearance due to the respondent not fulfilling certain conditions under the Import Licensing Notes to Chapter 87 of the Customs Tariff Schedule. The value of the vehicle was enhanced, and it was confiscated but later allowed for redemption against a fine. The appellate Commissioner's order permitted the importer to clear the goods for home consumption, leading to the Revenue appealing against this decision.

Issue 2:
The main question addressed was whether clearance for home consumption should be granted to the respondent instead of re-exporting the vehicle. The Tribunal found that the respondent had possessed the vehicle for over a year while abroad, meeting a crucial condition under the TR Rules. The appellant argued that ownership over the goods needed to be established, citing a High Court judgment. However, the Tribunal noted that the High Court judgment did not consider the relevant Import License Notes, which the appellant relied on. Ultimately, the Tribunal concluded that the appellant failed to make a strong case for re-export and found the appellate Commissioner's decision to allow clearance for home consumption fair and just in the circumstances.

Issue 3:
The judgment delved into the ownership requirement for clearance under the TR Rules. While the appellant contended that the respondent needed to prove ownership or title to the vehicle during the period abroad, the Tribunal found that the respondent had met the possession requirement of having the vehicle for more than a year abroad. The Tribunal emphasized that the ownership aspect was not a significant hurdle in this case.

Issue 4:
The Tribunal analyzed the interpretation of the relevant Import License Notes, specifically Note 3(1) (a), in determining the eligibility of the respondent for clearance under the TR Rules. By considering the possession period of the vehicle and the lack of a compelling case for re-export, the Tribunal concluded that the respondent satisfied the necessary conditions for clearance for home consumption.

Issue 5:
Regarding the justification for allowing clearance for home consumption, the Tribunal highlighted that there was no apparent hazard posed by permitting the vehicle to be cleared for home consumption. The decision to allow clearance was deemed fair and just based on the factual and circumstantial considerations of the case.

In conclusion, the appeal was dismissed, affirming the appellate Commissioner's order allowing clearance of the goods for home consumption.