2014 (3) TMI 424 - AT - Customs

Determination of Redemption fine and penalty - Import of vehicles / motor cycle - country of manufacture / origin - violation of licensing notes of Chapter 87 of Schedule 1 of the Foreign Trade (Development and Regulation) Act, 1992 - According to revenue goods were of Japanese origin, but imported from United State of America (USA). - Held that - there is nothing wrong in the finding that the goods were liable to confiscation under section 111 (d) of the Customs Act, 1962. The redemption fine and penalty imposed by the adjudicating authority also appear to be very low as compared to the assessable value of the prohibited goods. - In such a situation, it is only proper that this matter is adjudicated afresh by the adjudicating authority. Matter is remanded to adjudicating authority for a fresh decision - Decided partly in favor of assessee.

Summary

Issues:
1. Confiscation of imported goods under the Customs Act, 1962 due to non-compliance with licensing notes.
2. Power of the Commissioner (Appeals) to remand a case and enhance penalties without issuing a show cause notice.
3. Determination of country of origin and compliance with COP certificate requirements for imported motor vehicles.

Analysis:
1. The appellant imported motor cycles declaring a value of Rs. 12,40,493/- but faced confiscation under section 111(d) of the Customs Act, 1962 as the goods did not conform to licensing notes. The goods were considered to be of Japanese origin but imported from the USA, violating provisions of the Motor Vehicles Act and Central Motor Vehicles Rules. The adjudicating authority imposed a fine of Rs. 50,000/- and a penalty of Rs. 12,000/-, which the appellant contested.

2. The Commissioner (Appeals) remanded the case for enhanced penalties without issuing a show cause notice, leading to the appellant's challenge. The appellant argued that the Commissioner (Appeals) lacked the authority to remand the matter and increase penalties without proper procedure. The issue of the Commissioner's power to remand cases and enhance penalties without notice was a key contention in the appeal.

3. The dispute over the country of origin and compliance with COP certificate requirements arose as the appellant claimed the motor cycles were assembled in the USA, not mis-declaring the country of origin. The appellant presented a certificate of compliance issued by the manufacturer to support their claim. The Revenue argued that the country of assembly does not determine the country of origin and emphasized the importance of complying with COP certificate requirements, suggesting avoiding imports from countries without designated authorities for such certificates.

4. The Tribunal found the goods liable for confiscation under section 111(d) and deemed the penalties imposed insufficient compared to the value of the goods, warranting a fresh adjudication by the authority. While noting the Commissioner (Appeals) lacked the power to remand, the Tribunal exercised its authority to remand the matter for a fresh decision by the adjudicating authority after issuing a show cause notice and providing a hearing opportunity to the appellant. The appeal was disposed of accordingly.