9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (2) TMI 1527 - AT - CustomsAbsolute confiscation of the goods imported - used motor vehicle - levy of penalty - entitlement to the benefit of Transfer of Residence (T.R.) under the Customs Act 1962 for the importation of a used motor vehicle - principles of natural justice - HELD THAT - The fact remains that indisputably the appellant has been unable to evidence that the appellant has fulfilled the conditions of the T.R. as was conceded before the lower adjudicating authority; and indisputably the appellant is therefore also unable to evidence compliance of the conditions of ITC (Hs) Schedule I- import policy appended to chapter 87 that are required to be adhered while importing a passenger vehicle a restricted item. However that does not translate into a power to the customs authorities to give re-export as the sole option upon imposing a redemption fine as if compelling a re-export. It is seen that a division bench of this Tribunal has held in the decision in HBL Power Systems Ltd v.CC Vishakapatnam 2018 (7) TMI 793 - CESTAT HYDERABAD where it was held that not only Section 125 but no Section of the Customs Act 1962 gives any officer the power to compel anyone to import or export or re-export. This Section also does not give the Adjudicating Authority the right to give a conditional redemption saying you can redeem only if you agree to re-export . It is seen that for violation of the import policy with respect to car imports a division bench of this Tribunal has held that absolute confiscation is not warranted in its decision in J. S. Gujral v Commissioner of Customs Chennai 2016 (3) TMI 607 - CESTAT CHENNAI . Therefore this Tribunal is of the view that the order of confiscation and imposition of penalty in the appellant s case cannot be faulted. However confining the option only to re-export on payment of redemption fine is opposed to the decisions aforementioned and is decidedly untenable - this Tribunal is of the view that the appellant is required to be extended the option to redeem the vehicle on payment of redemption fine. The order of confiscation with an option to re-export on payment of redemption fine is hereby modified into an order of confiscation with an option of redemption of the vehicle. Given the facts and circumstances of this case the penalty imposed under Section 112(a) is also reduced to Rs.1, 00, 000/- Conclusion - i) For restricted goods absolute confiscation is not justified; redemption should be allowed on payment of applicable fines and duties. ii) Section 125 of the Customs Act does not empower authorities to impose conditions like re-export for redemption. iii) The penalty imposed under Section 112(a) should be proportionate to the violation and circumstances. iv) The adjudicating authority must adhere to principles of natural justice and cannot ignore appellate directions. The matter is remanded to the adjudicating authority for re-determination of duties and redemption fine with instructions to consider issuing a waiver for detention and demurrage charges - appeal disposed off by way of remand.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Entitlement to Transfer of Residence (T.R.) Benefits: The legal framework revolves around the conditions stipulated under the Customs Act, 1962, and the relevant import policy conditions for availing T.R. benefits. The appellant claimed eligibility under T.R. for importing a used vehicle. However, the appellant failed to provide necessary documentation, such as proof of continuous stay abroad for two years, which is a prerequisite for T.R. benefits. The appellant admitted to losing his passport and could not substantiate the claim of continuous stay abroad. The court found that the appellant did not meet the conditions for T.R. benefits, as confirmed by the travel history obtained from the Foreigners Regional Registration Office (FRRO), which indicated non-compliance with the continuous stay requirement. Therefore, the appellant was not entitled to T.R. benefits. 2. Absolute Confiscation without Redemption Option: The adjudicating authority initially ordered absolute confiscation of the vehicle due to non-compliance with import policy conditions. The appellant contested this decision, arguing that absolute confiscation was too harsh, especially since the vehicle was not prohibited for import but merely restricted. The court referred to precedents, including the decision in HBL Power Systems Ltd v. CC, Vishakapatnam, which clarified that for restricted goods, absolute confiscation is not warranted, and redemption should be allowed on payment of applicable duties and fines. The court found that the adjudicating authority's decision to deny redemption was contrary to established legal principles. 3. Imposition of Penalty under Section 112(a): The adjudicating authority imposed a penalty of Rs. 5,00,000 under Section 112(a) for the violation of import policy conditions. The appellant argued that the penalty was excessive and that the adjudicating authority failed to exercise discretion judiciously. The court noted that while the penalty was within the authority's discretion, the circumstances of the case, including the appellant's admission of non-compliance and the prolonged litigation, warranted a reduction in the penalty amount. The penalty was thus reduced to Rs. 1,00,000. 4. Conditional Redemption for Re-export: The adjudicating authority allowed redemption of the vehicle only for re-export, which the appellant contested as an onerous condition. The court examined Section 125 of the Customs Act, which provides that redemption should be allowed except for prohibited goods. The court found that compelling re-export as a condition for redemption was beyond the statutory mandate and contrary to judicial precedents. The court referred to Amba Lal v. Union of India and other relevant cases, concluding that the adjudicating authority cannot impose conditions like re-export for redemption. The court modified the order to allow redemption without the re-export condition. SIGNIFICANT HOLDINGS The court established several key principles:
The final determination was that the vehicle's confiscation was upheld, but the option for redemption was modified to allow the appellant to redeem the vehicle on payment of a reduced penalty and applicable duties, without the condition of re-export. The matter was remanded to the adjudicating authority for re-determination of duties and redemption fine, with instructions to consider issuing a waiver for detention and demurrage charges.
|
