2017 (12) TMI 616 - AT - Customs

Quantum of redemption fine and penalty - Import of vehicle - Department was of the view that necessary Type Approval Certificate have not been produced and the conditions have not been complied with - Held that - the commissioner has observed that substantial part of the conditions in Sl. No. 2 of ITC (HS) Policy to Chapter 87 has been complied and only the conditions (b) and (c) of the said policy have not been complied. There is no dispute that the vehicle was imported for the personal use of the company Chairman - Taking into consideration all these facts along with the fact that the vehicle has been imported for use of special need person the Commissioner has imposed the redemption fine of 5, 10, 000/- and penalty of 1, 00, 000/- - impugned order upheld - appeal dismissed - decided against Revenue.

Summary

Issues:
- Import of a vehicle not complying with import policy conditions
- Confiscation of the vehicle, fine, and penalty imposed by the original authority
- Appeal by the department regarding the adequacy of fine and penalty

Issue 1: Import of a vehicle not complying with import policy conditions
The case involved the import of a new Swift Kon Tiki 669 TAG Motor Home valued at ?50,95,514.48, which did not meet all the conditions as per the Import Policy Notes to ITC (HS) Classification of Chapter 87. The import should have been under an EPCG scheme with a Type Approval Certificate showing EC compliance for the complete vehicle. The import, in this case, was by a company and not under the EPCG scheme. The department contended that the necessary Type Approval Certificate was not produced, and the conditions were not met.

Issue 2: Confiscation of the vehicle, fine, and penalty imposed by the original authority
After adjudication, the original authority ordered the confiscation of the vehicle with an option to redeem it on payment of a fine of ?5,10,000 and imposed a penalty of ?1,00,000. The department appealed, arguing that the fine and penalty were inadequate considering the market value of the imported goods.

Issue 3: Appeal by the department regarding the adequacy of fine and penalty
The department contended that the importers did not claim exemption under the ITC HS Classification for import items related to vehicles for handicapped persons. The value of the vehicle was well over USD 40,000, imported by a company not under the EPCG scheme, and no Type Approval Certificate showing EC compliance was produced. The department sought an increase in the redemption fine and penalty based on the market value of the goods.

In the final judgment, the tribunal upheld the impugned order by the Commissioner. It was noted that the vehicle was imported for the personal use of the company Chairman, who was physically challenged, and the vehicle was custom-made for his specific needs. Considering these factors and the humanitarian grounds presented by the importers, the tribunal found no grounds to interfere with the redemption fine of ?5,10,000 and penalty of ?1,00,000 imposed by the Commissioner. The appeal by the department was dismissed, and the cross-objection filed by the respondent was disposed of accordingly.