2017 (2) TMI 472 - AT - Customs

Detention of goods - foreign bike - smuggling - detention on the ground that the appellant could not produce any documents evidencing the legal import of the bike - quantum of redemption fine and penalty - Held that - the appellant is liable to pay the duty and redemption fine. The plea of the appellant that he has to be given benefit of the duty already paid vide the bill of entry cannot be accepted for the reason that the description of the bike in the bill of entry is entirely different. There is no evidence to show that the bike described in the RC and seized from the possession of the appellant has suffered any customs duty - the duty of 13, 55, 578/- imposed upon the appellant upheld. The authorities below have imposed a redemption fine of 1, 50, 000/-and penalty of 40, 000/. The appellant having purchased the bike for his own use the Redemption fine is on the higher side. The same is reduced to 75, 000/- - Moreover there is no evidence to prove that the appellant was involved in the illegal import of the bike. He had purchased the bike taking into confidence the RC issued by a public office. The imposition of penalty 40, 000/- is unsustainable and requires to be set aside. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues Involved:
1. Confiscation of the smuggled bike under Section 111 of the Customs Act, 1962.
2. Imposition of penalty under Section 112(b) of the Customs Act, 1962.
3. Liability of the appellant to pay customs duty.
4. Legitimacy of the appellant's claim as an innocent purchaser.
5. Validity of the redemption fine and penalty imposed.

Issue-Wise Detailed Analysis:

1. Confiscation of the Smuggled Bike:
The appellant was found in possession of a foreign bike suspected to be smuggled into India. The bike was seized under Section 110 of the Customs Act, 1962, as the appellant failed to produce valid import documents. The bike was registered in the name of another individual, and the registration certificate did not match the bill of entry details, indicating a violation of the Customs Act, 1962. The original authority ordered the absolute confiscation of the bike under Section 111(d) of the Customs Act, 1962.

2. Imposition of Penalty:
The original authority imposed a penalty of ?40,000 on the appellant under Section 112(b) of the Customs Act, 1962, for being in possession of the smuggled bike. The Commissioner (Appeals) upheld this penalty, noting the appellant's failure to provide valid import documents.

3. Liability to Pay Customs Duty:
The appellant argued that since the bike was registered in India, no duty could be imposed on him as a subsequent purchaser. However, the Tribunal referred to Section 125(2) of the Customs Act, which states that the owner or possessor of confiscated goods is liable to pay any duty and charges payable in respect of the goods. The Tribunal cited the case of Sumant Sood Vs CC, Chennai, where it was held that the person in possession of the vehicle is liable to pay customs duty and redemption fine. The Tribunal upheld the duty of ?13,55,578 imposed on the appellant.

4. Innocent Purchaser Claim:
The appellant claimed to be an innocent bona fide purchaser, having bought the bike after verifying the registration certificate issued by the RTA. However, the Tribunal noted discrepancies in the chassis number and bike model between the registration certificate and the bill of entry. The appellant failed to verify the antecedents of the bike and its previous owners. The Tribunal found that the appellant's claim of being an innocent purchaser could not be accepted, as he did not provide sufficient evidence to support this claim.

5. Redemption Fine and Penalty:
The Tribunal considered the appellant's argument that the redemption fine and penalty were excessive. While upholding the duty of ?13,55,578, the Tribunal reduced the redemption fine from ?1,50,000 to ?75,000, noting that the appellant had purchased the bike for personal use. The Tribunal set aside the penalty of ?40,000, as there was no evidence to prove the appellant's involvement in the illegal import of the bike. The appellant had relied on the registration certificate issued by a public office, which justified the reduction in the redemption fine and the setting aside of the penalty.

Conclusion:
The Tribunal upheld the duty of ?13,55,578 and reduced the redemption fine to ?75,000. The penalty of ?40,000 was set aside. The appeal was partly allowed, providing consequential reliefs to the appellant.