2011 (11) TMI 210 - AT - Customs

Assessee imported used BMW declaring a low value Car has not been used by him for minimum 1 year before import thereby, violation of licencing restriction documents furnished indicating a price lower than the price admitted by them during the personal hearing - Department held absolute confiscation of vehicle, enhanced the import value and levied penalty on assessee - Held that - It is found that appellant was living in a foreign country for about 3 years and there is no allegation that the vehicle was sought to be imported by somebody else using the name of the appellant on any other similar allegations. Thus, while upholding the confiscation, vehicle ia allowed to be redeemed on payment of redemption fine. It is found that the valuation has been arrived at by Department based on manufacturers price after granting discount and allowing depreciation. Therefore, there is no reason to interfere with the enhancement of value. Further, Since, the vehicle has been imported in violation of licencing restrictions and attempted to be cleared declaring a price lower than even the admitted price, penalty on the appellant is justified.

Summary

Issues:
1. Confiscation of imported vehicle for violation of Import Licensing Notes.
2. Enhancement of the value of the imported vehicle.
3. Imposition of penalties on the appellant.

Issue 1 - Confiscation of Imported Vehicle:
The appellant imported a used BMW car but failed to meet the minimum one-year usage requirement before returning to India, violating licensing restrictions. The original authority ordered absolute confiscation of the vehicle under Section 111(d) of the Customs Act. On appeal, the Commissioner (Appeals) upheld the confiscation but reduced the penalty imposed on the appellant. The Tribunal noted that while the violation was technical in nature, the appellant's eligibility to import a secondhand car was impacted by the failure to meet the usage period requirement. However, considering the appellant's extended stay abroad and lack of fraudulent intent, the Tribunal allowed the vehicle to be redeemed on payment of a fine, offering a more lenient approach.

Issue 2 - Enhancement of the Value:
The appellant declared a significantly lower value for the imported car compared to its actual worth, as evidenced by the high-end model and low declared value. The Tribunal found the declared value to be unreasonably low, especially considering the car's features and condition. The appellant's attempt to justify the low value with documents obtained after the assessment was deemed unreliable. The Tribunal rejected the appellant's claims regarding the auction purchase and discrepancies in pricing information. The valuation was recalculated based on manufacturer information, discounts, depreciation, and additional charges, leading to an enhanced assessable value. The Tribunal upheld the enhancement of value, emphasizing the discrepancy between the declared and actual value.

Issue 3 - Imposition of Penalties:
The Tribunal justified the imposition of penalties on the appellant due to the violation of licensing restrictions and the undervaluation of the imported vehicle. Despite the technical nature of the violation, the Tribunal deemed penalties appropriate, considering the discrepancies in pricing information and the attempt to clear the vehicle at a significantly lower value. The penalty amount was reduced by the Commissioner (Appeals) but was sustained by the Tribunal as not excessive. The Tribunal concluded that penalties were warranted in light of the violations committed by the appellant.

In conclusion, the Tribunal upheld the enhancement of the value, allowed the redemption of the confiscated vehicle on payment of a fine, and sustained the imposed penalty on the appellant, emphasizing compliance with licensing regulations and accurate valuation of imported goods.