1999 (11) TMI 173 - AT - Customs

Summary

Issues:
1. Duty evasion and confiscation of imported vehicle
2. Assessment of assessable value and Customs Duty
3. Misdeclaration of engine capacity and manipulation allegations
4. Validity of Show Cause Notice and imposition of penalty

Issue 1: Duty evasion and confiscation of imported vehicle

The appellant, an NRI, imported an Audi 80 car from Volks Wagen and paid duty as per the invoice. Subsequently, Customs authorities initiated proceedings due to suspicions of duty evasion by importers of Volks Wagen vehicles. The Collector of Customs found the assessable value of the car to be higher than declared, resulting in a short levy of Customs Duty. The Collector also ordered confiscation of the vehicle with an option for redemption on payment of a fine. Additionally, a personal penalty was imposed on the appellant under the Customs Act. The appellant challenged this order in Appeal No. C/399/93-A.

Issue 2: Assessment of assessable value and Customs Duty

The Collector assessed the assessable value of the imported car higher than declared due to engine capacity above 1600 CC. This resulted in a short levy of Customs Duty, which the appellant was directed to pay. The Collector also ordered confiscation of the vehicle with a redemption option and imposed a personal penalty under the Customs Act. The correctness of this assessment and imposition of duty and penalty was challenged by the appellant in the appeal.

Issue 3: Misdeclaration of engine capacity and manipulation allegations

The Customs authorities suspected misdeclaration of engine capacity in Audi 80 vehicles imported without proper duty payment. The manufacturer clarified that the vehicle imported by the appellant had an engine capacity of 1595 CC, as per the invoice. The adjudicating authority found no collusion between importers and the manufacturer regarding engine capacity manipulation. It was concluded that the action against the appellant was misguided, as there was no evidence to prove engine capacity misdeclaration.

Issue 4: Validity of Show Cause Notice and imposition of penalty

The Show Cause Notice issued to the appellant was found to be time-barred as there was no misdeclaration or suppression according to the Collector's findings. The absence of misdeclaration meant no differential duty could be claimed, leading to the dismissal of the penalty imposition by the Revenue. The Tribunal allowed the appeal, setting aside the order related to the imported car by the appellant. The Revenue's appeal was dismissed, with the Tribunal criticizing it as a waste of public time and energy.

This judgment from the Appellate Tribunal CEGAT, New Delhi, involved issues of duty evasion, assessment of assessable value, misdeclaration of engine capacity, and the validity of the Show Cause Notice and penalty imposition. The Tribunal found in favor of the appellant, setting aside the order related to the imported car and dismissing the Revenue's appeal.