2017 (7) TMI 183 - AT - Customs

Valuation of imported second hand car - violation of the condition of possession of car - Held that - some eligible importers had been persuaded to procure vehicles for resale in India and, thereby, overcome the restrictions that are placed on import of new and second-hand vehicles by Indian residents. The existence of records pertaining to manufacture of vehicles are not easily discredited - There is no reason to doubt the veracity and authenticity of the price certificates issued for the three vehicles. There has been a misdeclaration of the year of manufacture leading to undue benefit in the duty that is to be levied on the vehicles. The invoking of the extended period in section 28 of Customs Act, 1962 cannot be faulted. Penalty u/s 114A of CA - Held that - the ingredients that warrant the invoking of this section is identical to that for invoking the extended period - Consequently, the imposition of penalty under section 114A of Customs Act, 1962 also cannot be faulted. Appeal dismissed - decided against appellant.

Summary

Issues:
Import of motor vehicles under special facility, violation of possession conditions, incorrect declaration of year of manufacture, enhancement of value, duty computation, penalty imposition, procedural fairness, limitation period for proceedings, authenticity of price certificates, imposition of penalty without confiscation, compliance with import policy provisions.

Analysis:

1. Import of Motor Vehicles under Special Facility:
Three appellants imported motor vehicles under a facility for returning non-residents, waiving certain import conditions. However, the vehicles were found to violate possession conditions and have incorrect declarations regarding year of manufacture, leading to enhanced value, duty computation, and penalty imposition.

2. Violation of Possession Conditions and Incorrect Declaration of Year of Manufacture:
The vehicles imported were found to violate the possession condition and have incorrect year of manufacture declarations. This resulted in enhanced value assessment, duty computation under section 28 of Customs Act, 1962, and penalty imposition under section 114A.

3. Procedural Fairness and Limitation Period for Proceedings:
The appellants contested the lack of opportunity for cross-examination regarding the price certificates used for value enhancement. The Tribunal found that the certificates were authentic, and the request for cross-examination was unnecessary. The Tribunal also clarified that the proceedings were not time-barred, as initial proceedings were based on declarations in the bill of entry, and subsequent investigations led to further recovery proceedings.

4. Authenticity of Price Certificates and Penalty Imposition:
The authenticity of the price certificates was upheld by the Tribunal, and penalty imposition under section 114A was justified based on misdeclaration of the year of manufacture, leading to duty evasion.

5. Compliance with Import Policy Provisions:
The Tribunal highlighted concerns regarding compliance with import policy provisions, specifically related to possession requirements and sale restrictions for imported vehicles. It noted discrepancies in the clearance process and emphasized the need for strict adherence to policy regulations.

6. Conclusion:
The Tribunal dismissed the appeals, finding them without merit based on the misdeclarations, duty evasion, and penalty imposition. The judgment was pronounced on 12/06/2017, upholding the decisions of the lower authorities regarding duty computation, penalty imposition, and procedural fairness.