2017 (6) TMI 792 - AT - Customs

Redemption of vehicle - import of used Volkswagen Beetle, Model 2004 - case of Revenue is that the impugned order allowing the redemption of the confiscated vehicle on payment of fine of ₹ 2,00,000/- is wrong because the vehicle was imported in violation of the Rules and the Foreign Trade Policy 2009-14 - Held that - the learned Commissioner (Appeals) has given the reasoning for allowing the redemption of the confiscated vehicle on payment of fine and stated that adjudicating authorities are not empowered to impose conditions when granting the option to redeem confiscated goods on payment of fine. Powers have to be exercised strictly in accordance with the letter of the law if the foundation of Rule of Law is to continue to support our polity. In imposing the condition of re-export, the original authority has exceeded the jurisdiction conferred by the statute. I, therefore, set aside the portion of the order relating to re-export of the car as a condition of redemption - the reasoning given by the learned Commissioner is legal and there is no infirmity in it - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Confiscation of imported vehicle under Customs Act, 1962.
2. Redemption of confiscated vehicle on payment of fine.
3. Jurisdiction of adjudicating authorities in imposing conditions for redemption.
4. Quantification of fine for redemption of confiscated goods.
5. Validity of penalty imposed on importer.

Analysis:

Issue 1: Confiscation of imported vehicle under Customs Act, 1962
The case involved the import of a secondhand car declared as used Volkswagen Beetle, which was subjected to Customs examination revealing discrepancies in documentation and import conditions. The original authority held that the importer violated policy provisions governing the import of used/old cars and declared a lower value to evade Customs duty. Consequently, the vehicle was found liable for confiscation under relevant sections of the Customs Act, 1962, and the importer was liable for penalty.

Issue 2: Redemption of confiscated vehicle on payment of fine
The Commissioner of Customs (Appeals) allowed the redemption of the confiscated vehicle for home consumption on payment of a fine of ?2,00,000. The impugned order modified the option for re-export to redemption, considering the market value of the vehicle and the undue benefit derived by the importer. The Tribunal upheld this decision, emphasizing the equitable nature of the fine imposed for redemption.

Issue 3: Jurisdiction of adjudicating authorities in imposing conditions for redemption
The Tribunal noted that the original authority exceeded its jurisdiction by imposing the condition of re-export as a condition of redemption. Referring to Section 125 of the Customs Act, it emphasized that adjudicating authorities are not empowered to impose such conditions when granting the option to redeem confiscated goods on payment of a fine. The Tribunal set aside this portion of the order, highlighting the need to strictly adhere to the law in exercising powers.

Issue 4: Quantification of fine for redemption of confiscated goods
In determining the fine for redemption, the Tribunal considered various decisions and emphasized the need for the fine to be commensurate with the undue benefit derived by the importer. The Tribunal found the original authority's lenient view in quantifying the fine appropriate, considering the market value of the vehicle and the importer's non-compliance with licensing notes.

Issue 5: Validity of penalty imposed on importer
The penalty imposed on the importer was upheld by the Commissioner of Customs (Appeals) and subsequently by the Tribunal. The Tribunal found no infirmity in the legal reasoning provided by the Commissioner and dismissed the appeal of the Revenue, affirming the penalty imposed on the importer.

In conclusion, the Tribunal upheld the impugned order allowing the redemption of the confiscated vehicle on payment of a fine, emphasizing the legal reasoning provided by the Commissioner and the equitable quantification of the fine. The Tribunal also highlighted the need for adjudicating authorities to strictly adhere to the law when granting the option to redeem confiscated goods, without imposing additional conditions beyond the scope of their jurisdiction.