2015 (12) TMI 657 - AT - Customs

Re-Confiscation of car from purchaser after import - Under invoicing of value of cars - Evasion of duty - Imposition of redemption fine and penalty - Held that - At the time of importation, the car was confiscated and allowed to be redeemed on payment of redemption fine and penalty imposed on the importer and the car was cleared by the importer, Shri Krishan Kant on payment of the penalty. The appellant is the bonafide purchaser of the car in question. - car is reconfiscated which is not permissible in the light of decision of the Hon ble Apex Court in the case of Mohan Meakin Ltd. (1999 (12) TMI 58 - SUPREME COURT OF INDIA) . Therefore, we hold that the confiscation of car is not sustainable, the confiscation of the car is set aside. - Further the appellant is a bona fide purchaser of the car and have no role in importation of car, no penalty is imposable on the appellant. Consequently, penalties imposed on the appellant are set aside. - Decided in favour of assessee.

Summary

Issues:
- Imposition of redemption fine and penalties under Customs Act, 1962
- Confiscation of car due to mis-declaration and evasion of customs duty
- Appellant's claim as a bonafide purchaser and challenge to reconfiscation
- Legal provisions regarding confiscation and redemption of goods
- Applicability of previous court judgments on similar cases

Analysis:
1. The judgment revolves around the appeal against an order imposing a redemption fine of Rs. 10 lakhs and penalties under the Customs Act, 1962. The case involves the misdeclaration of high-end luxury cars by importing them as new cars to evade higher customs duties. The appellant, a bonafide purchaser, faced charges related to the importation of a Toyota Land Cruiser diesel car that was confiscated and subjected to a redemption fine and penalties.

2. The appellant argued that the car was confiscated and redeemed previously, and reconfiscation was impermissible as per legal precedents. Citing the case of Mohan Meakin Ltd., the court held that once goods are allowed to be redeemed, reconfiscation is not justified. The appellant's lack of involvement in the importation process further supported the decision to set aside the penalties imposed on them.

3. The legal provisions under Sections 111(d) and 111(m) of the Customs Act were crucial in determining the confiscation of goods. The court emphasized the obligation of the adjudicating authority to assess the market value of goods before releasing them on payment of redemption fine. Failure to conduct a proper inquiry and subsequent initiation of proceedings against a bona fide purchaser were deemed unjust and unsustainable.

4. The judgment highlighted the importance of upholding the rights of bonafide purchasers and preventing unjust liabilities from being imposed on them. The appellant's innocence in the importation process and the previous redemption of the car led to the decision to allow the appeal and set aside the penalties imposed, ultimately providing consequential relief to the appellant.

By considering the legal provisions, previous court judgments, and the appellant's status as a bonafide purchaser, the court ruled in favor of setting aside the confiscation of the car and the penalties imposed, thereby granting relief to the appellant in this case.