2022 (6) TMI 59 - AT - Customs

Violation of policy conditions - import of used car - prohibited or restricted goods or not - rejection of declared value - redetermination of assessable value - whether the imported car is liable for absolute confiscation or should be allowed the option for redemption? - levy of penalty - HELD THAT - In present case the declared value has been rejected and the value of the car imported has been enhanced based on the findings recorded by the Chartered Engineer without application of mind by the adjudicating authority. The declared value could be rejected only if the importer fails to furnish any documents evidencing the actual transaction value. It is rather surprising that the Revenue has placed reliance on the chartered engineer report when the Revenue is also not disputing the fact that the car was a used car and hence contents of the report of the chartered engineer is highly imaginary and lacks credence which has to be ignored - Chartered Engineer certificate can be a ground for rejection of the declared value and enhancement of the same, but the same needs to be considered along with the submissions made by the appellant by the adjudicating authority. The order of adjudicating authority should be based on proper appreciation of all the facts and submissions. Hence for this purpose the matter needs to be remanded back to the adjudicating authority for redetermination of the value of the imported goods. The car which was imported, the importation of the same was not prohibited. It is not the case of the revenue that there was any prohibition insofar as the importation of the car was concerned at any point of time and admittedly, the only violation, if at all, was the non-usage of the said car for a period of one year abroad, before importation. That ipso facto cannot make the car liable for absolute confiscation - the appellant admits that there are certain violation of the policy restrictions for which the car should have been confiscated but allowed for redemption against a redemption fine in terms of Section 125 of the Customs Act, 1962. This also needs to be examined by the concerned adjudicating authority and as far as possible the importer should be given the option to redeem. Since the matter is remanded back to the original authority, he should re-determine the liability to penalty and quantum of penalty in remand proceedings - appeal allowed by way of remand.

Summary

Issues:
1. Rejection of declared assessable value of imported car
2. Confiscation of imported car
3. Imposition of penalty on the importer

Analysis:

Issue 1: Rejection of declared assessable value
The appellant imported a used RHD car and declared its value at Rs. 6,63,322.85. However, the revenue rejected this value and re-determined it at Rs. 9,57,672 based on a Chartered Engineer's valuation. The Tribunal observed that the Revenue's reliance on the engineer's report was misplaced as it did not consider crucial documents proving the actual transaction value. The Tribunal emphasized that the adjudicating authority should have considered all facts and submissions before rejecting the declared value. Therefore, the matter was remanded back for a proper redetermination of the imported car's value.

Issue 2: Confiscation of imported car
Although the imported car did not face any prohibition for importation, the appellant violated a policy condition by not using the car for a year abroad before importation. The Tribunal noted that this violation did not warrant absolute confiscation of the car. Instead, the appellant should be given the option for redemption against a redemption fine as per Section 125 of the Customs Act, 1962. The Tribunal directed the adjudicating authority to re-examine this aspect and consider allowing the importer the opportunity to redeem the car.

Issue 3: Imposition of penalty
As the matter was remanded for reconsideration, the Tribunal instructed the adjudicating authority to reassess the liability to penalty and determine the quantum of penalty in the remand proceedings. The Tribunal set aside the impugned order and directed the matter to be finalized within three months from the receipt of the order, considering the car was imported for personal use and was confiscated by the revenue.

In conclusion, the Tribunal's decision focused on the incorrect rejection of the declared value, the inappropriate confiscation of the imported car, and the need for a reassessment of the penalty. The matter was remanded back for a thorough reconsideration in line with the observations made by the Tribunal.