2017 (8) TMI 144 - AT - Customs

Confiscation - rejection of assessable value - Toyota Land Cruiser Prado - misdeclaration of offended car - smuggling - Appellant s submission is that there can neither be seizure nor confiscation since the car has already been released. Neither the first buyer nor the subsequent buyers were involved in the import alleged to be made in violation of law - Held that - It is admitted fact on record that there was deliberate mis-declaration of year of manufacture as well as chassis number. It is also admitted fact that there was an attempt to get higher rate of depreciation on the imported car under the Transfer of Residence (TR) Rules, 2002 . When the appellants could not come out with clean hands to discard the allegations as well as purchased the offending car imported without any inquiry into the law applicable to such import, they cannot be said to be stranger to the deal. Car imported unlawfully contravening provisions of Customs Act, 1962 become smuggled goods as defined by Section 2(39) thereof. The fraudulent mis-declaration and active as well as conscious involvement not being appreciated, the parties therein got relief. But, in the present case, it is the case of deliberate mis-declaration and commitment of fraud against Customs abusing the benefit of the Transfer of Residence (TR) Rules, 2002 , there shall be no escape from the penal consequence of law by these appellants. Appeal dismissed - decided against appellant.

Summary

Issues involved:
1. Rejection of assessable value of the car and re-determination of value, levying differential duty.
2. Confiscation of the imported vehicle and granting redemption option.
3. Imposition of penalties on individuals under Customs Act.
4. Allegations of mis-declaration and violation of Customs Act provisions.
5. Applicability of Transfer of Residence Rules and subsequent buyers' liability.

Issue 1: Rejection of assessable value and levying differential duty:
The adjudication order involved the rejection of the assessable value of a Toyota Land Cruiser Prado, leading to the re-determination of its value at ?10,15,358 and the imposition of a differential duty of ?8,86,846 under Section 28(1) of the Customs Act, 1962. The duty was demanded from an individual from the date of clearance of the car until the recovery of the differential duty.

Issue 2: Confiscation of the vehicle and redemption option:
The vehicle was confiscated under Sections 111(d), 111(m), and 111(o) of the Customs Act, 1962, due to misdeclaration issues. The importer was granted the option for redemption by paying a fine of ?8,00,000 in lieu of confiscation under Section 125 of the Customs Act, 1962.

Issue 3: Imposition of penalties under Customs Act:
Penalties of ?3,00,000 each were imposed on two individuals under Sections 112(a) and 112(b) of the Customs Act, 1962, for their involvement in the import and subsequent transactions related to the misdeclared vehicle.

Issue 4: Allegations of mis-declaration and violation of Customs Act:
The case involved deliberate mis-declaration of the vehicle's year of manufacture and chassis number to claim higher depreciation. Investigations revealed discrepancies in the vehicle's details, leading to allegations of fraud and violation of Customs Act provisions.

Issue 5: Applicability of Transfer of Residence Rules and subsequent buyers' liability:
The case highlighted the misuse of the Transfer of Residence Rules in importing the vehicle, leading to subsequent buyers' involvement in the alleged violations. The argument was made that subsequent buyers should not face penalties or confiscation consequences as they were bona fide purchasers.

The judgment dismissed the appeals, emphasizing that the deliberate mis-declaration and fraud committed against Customs Act provisions, particularly abusing the Transfer of Residence Rules, warranted the penal consequences imposed. The court held that the subsequent buyers, who did not inquire into the legality of the import, were liable under the law as they contributed to the offense. The decision differentiated this case from previous judgments where fraudulent mis-declaration was not actively involved, affirming the penalties and consequences imposed on the appellants.