2008 (8) TMI 226 - AT - Customs

Confiscation of cars on ground that cars were imported for misutilizing the EPCG Scheme appellant plea is that confiscation was on the basis of anticipation that the said cars would be misutilized cars were brought under valid EPCG licence issued by the DGFT, for use in rent-a-cab service - cars, covered by a valid licence lying with the Customs Department and no Bill of Entry was filed and the goods were not assessed under Exemption Notification - confiscation is not acceptable

Summary

Issues:
Confiscation of imported cars under the Export Promotion Capital Goods (EPCG) Scheme for alleged misuse and violation of licence conditions.

Analysis:
The case involved the confiscation of six cars imported under a valid licence issued by the DGFT under the EPCG Scheme. The appellants had earlier imported 31 cars under the same licence, out of which 25 were released, and the remaining six were confiscated by the Customs authorities. The seizure and subsequent confiscation were based on the suspicion of misutilization of the EPCG Scheme, as observed in the adjudication order. The appellants argued against the confiscation, stating that it was done on the basis of anticipation and cited relevant case laws to support their contention.

The Revenue, represented by the DR, supported the confiscation, highlighting the misuse of the EPCG licence in relation to the earlier imported cars. The Adjudicating Authority justified the confiscation to prevent further misuse of the licence, drawing parallels with a Supreme Court decision in a similar case.

Upon review, the Tribunal found that the six cars were still with the Customs authorities, uncleared, and not assessed under the Exemption Notification. The cars were imported under a valid EPCG licence for specific use, subject to fulfilling export obligations. The Tribunal noted that the goods were not cleared under the EPCG Scheme and, therefore, the importer should not be penalized for non-fulfillment of obligations under the scheme. The Tribunal also referenced a CBEC Circular to support its decision.

The Tribunal distinguished the present case from the precedent cited by the Adjudicating Authority, emphasizing that the appellants had complied with the proceedings related to the seizure of the earlier cars and had even approached the Settlement Commission for resolution. Citing relevant Supreme Court judgments, the Tribunal concluded that the confiscation of the six cars, covered by a valid licence at the time of import, was unjustified. The Tribunal set aside the impugned order, allowing both appeals with consequential relief.

In summary, the Tribunal overturned the confiscation of the six imported cars, emphasizing the validity of the licence at the time of import and the lack of grounds for penal action against the importer. The decision was based on a thorough analysis of the facts, legal provisions, and relevant case laws, ultimately providing relief to the appellants.