2009 (5) TMI 473 - HC - Customs

Confiscation of car- Misdeclaration of value- Respondent imported a custom made Ferrari car from Singapore on a declared value of US 70000. The marine insurance value of the car was US 107395. In view of the difference, the department investigated the matter. It is seen that assessment is on a value of UK Stg PDS 80,07,659. The respondent filed appeal to the Commissioner of Customs (Appeals) who dismissed the same. The department on conclusion of investigation ordered confiscation of the vehicle and released it on payment of redemption fine of Rs. 7.5 lakhs and personal fine of Rs. 2.5 lakhs. Against the order of Commissioner (Customs), the respondent filed appeal before the Tribunal which was heard along with the appeal filed by the respondent against assessment of duty at higher amount. The Tribunal though confirmed the valuation adopted by the department for the purpose of levy of duty, cancelled the confiscation order for the reason that there is no misdeclaration of value justifying confiscation under Section 111(d) and 111(m) of the Customs Act. The department filed this appeal against the order of the Tribunal cancelling confiscation order and release on payment of redemption fine for the reason that there is misdeclaration of value. Held that-Respondent has not produced evidence for the payment of even the invoice value. Tribunal s order reversed and confiscation order upheld. However, redemption fine reduced and personal penalty set-aside.

Issues: Misdeclaration of value in import, confiscation order, release on redemption fine, assessment of duty at a higher amount.

Misdeclaration of value in import: The respondent imported a custom made Ferrari car from Singapore at a declared value of US $70,000, while the marine insurance value was US $107,395. The department confirmed that the car was sold to the supplier in Singapore for US $107,395. The Tribunal confirmed the valuation adopted by the department for levy of duty but canceled the confiscation order, stating there was no misdeclaration of value justifying confiscation. The appellant argued misdeclaration was evident as the car was sold to the importer in Singapore at a higher price than what the respondent paid. The court found the time lag between manufacturer's supply and the import to be indicative that the car was not unsold in Singapore, supporting the misdeclaration claim. The court reversed the Tribunal's decision, upholding the confiscation order due to the lack of evidence proving the respondent's claims of discount and unsold status in Singapore.

Confiscation order and release on redemption fine: The department had ordered confiscation of the vehicle, which was released on payment of a redemption fine of Rs. 7.5 lakhs and a personal fine of Rs. 2.5 lakhs. The Tribunal canceled the confiscation order due to lack of evidence proving misdeclaration. The court reversed the Tribunal's decision, upholding the confiscation order and release on redemption fine. However, in consideration of the assessment being on a higher value and duty paid on estimated value, the court modified the confiscation order by canceling the personal penalty and reducing the redemption fine to Rs. 6 lakhs.

Assessment of duty at a higher amount: The assessment was done on a value of UK Stg PDS 80,07,659, and the respondent filed an appeal against the assessment of duty at a higher amount. The Tribunal confirmed the valuation but canceled the confiscation order. The court upheld the assessment of duty at a higher amount, emphasizing the lack of evidence supporting the respondent's claims of discount and unsold status in Singapore, leading to the modification of the confiscation order and reduction of the redemption fine.

← Previous Next →