2024 (2) TMI 1270 - AT - Customs

Import of brand new vehicle or not - Valuation of the car - Vehicle imported 2013 Nissan Petrol Car Upper Grade ASR SPEC (13-999) - benefit of Notification No. 21/2002 - not produced type approval / COP certificate by the listed agency country of manufacture - confiscation - HELD THTA - On perusal of records, it is seen that the report given on first check of the imported car, is that the car is new. The reading is only 121 Kms. The department though alleges that the car has been used has not produced any evidence to show that the car has been registered for the purpose of use. The registration, if in UAE is only to comply with technical formalities of the said country and not for using the vehicle on road. Following the case of Lorenzo Bestonro 2013 (11) TMI 387 - CESTAT MUMBAI and Noshire Moody 2012 (5) TMI 386 - BOMBAY HIGH COURT it was held that when registration is for the purpose of complying formalities it cannot be said that the car is used one. Thus, we are of the considered opinion that the allegation that the car is not new cannot be accepted. The appellant has produced copy of the GSO conformity certificate. The importer has opted to purchase the vehicle through the dealer in UAE. The vehicle also is said to have been registered in UAE. In such circumstances, merely because the said certificate shows the vehicle as right hand drive, which is the model used in India, it cannot be said that the appellant has not complied with policy conditions. In the present case, there is no evidence suggesting undervaluation especially when the value of the goods could be easily verified from website. The adjudicating authority has taken the view that since the vehicle imported is of right hand drive and the vehicles used in UAE are of left hand drive, the value cannot be accepted. We cannot endorse the said view. Further, the value of the goods imported into Australia cannot be taken as a comparable value for redetermining the assessable value of the goods since the value differs on the basis of destination of shipment also. Thus, we find that the order passed by Commissioner (Appeals) allowing the benefit of exemption Notification No.21/2002-Cus. as well as setting aside the order of confiscation of the goods is legal and proper. The enhancement of value was also found to be not justified. The impugned order does not call for any interference. The Department appeal is dismissed.

Summary

Issues Involved:
1. Whether the imported vehicle qualifies as a "new vehicle" under the relevant import regulations.
2. Whether the valuation of the imported vehicle was correctly determined by the adjudicating authority.

Summary of Judgment:

Issue 1: Qualification as a New Vehicle
The primary contention was whether the imported '2013 Nissan Petrol Car Upper Grade ASR SPEC (13-999)' could be considered a new vehicle. The adjudicating authority had initially held that the vehicle was not new, citing its prior sale and registration in UAE. However, the Commissioner (Appeals) observed that the vehicle, though sold by the manufacturer in Japan to a dealer in Dubai, had not been used or registered for use, thus qualifying it as new. The Tribunal upheld this view, noting the vehicle's minimal mileage (121 km) and referencing previous decisions (Lorenzo Bestonso Vs CC, Abbas Kurma Puthoor Vs. CC) which clarified that registration for export purposes does not equate to use. Consequently, the Tribunal ruled that the vehicle was new and eligible for the benefits under Notification No. 21/2002.

Issue 2: Valuation of the Imported Vehicle
The adjudicating authority had rejected the declared transaction value of AED 2,15,000 (CIF) and re-determined the assessable value to Rs. 53,50,433/-, based on a comparison with a model from an Australian website. The Commissioner (Appeals) found this method unsustainable, emphasizing that valuation should be based on comparable evidence specific to the same model and region. The Tribunal concurred, citing the absence of contemporaneous imports and the lack of evidence for undervaluation. It was noted that the adjudicating authority failed to provide sufficient reasons for rejecting the transaction value, which should be the basis for assessable value under Section 14 of the Customs Act, 1962. The Tribunal referenced precedents (COLLECTOR OF CUSTOMS Vs NIPPON BEARING PVT LTD, BASAND INDUSTRIES Vs COLLECTOR) to support the necessity of clear reasons for rejecting transaction values. Consequently, the Tribunal upheld the decision of the Commissioner (Appeals) to accept the declared value and dismissed the department's appeal.

Conclusion:
The Tribunal found the Commissioner (Appeals)' order to be legal and proper, allowing the benefit of the exemption Notification No. 21/2002-Cus and setting aside the order of confiscation and enhancement of the vehicle's value. The department's appeal was dismissed.