Import of V/W No. 401-2-6836 (1969) by Mr. Jabbar through Hussainiwala check post on 9-7-1969 under Carnet No. 639658 - Customs - F. No. 575/11/82-LEII

Import of V/W No. 401-2-6836 (1969) by Mr. Jabbar through Hussainiwala check post on 9-7-1969 under Carnet No. 639658 F. No. 575/11/82-LEII Dated 16-5-1988 Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Customs - Import of V/W No. 401-2-6836 (1969) by Mr. Jabbar through Hussainiwala Check Post on 9-7-1969 under Carnet No. 639658 - C/R. Please refer to CCE, Chandigarh's letter C. No. VIII (HQRS) 18/4/Cus./82/701, dated 27-1-1982 on the above subject. 2. The Law Ministry's opinion on this subject, dated 24-3-1988 is attached. You may take necessary action in the case on the basis of Law Ministry's advice, which has been accepted by the Board. Notes in the Ministry of Law Justice Department of Legal Affaris Advice (b) Section The reference concerns realization of customs duty from the Federation of Indian Automobile Association in terms of the Agreement made on 27-4-1977 between the Federation and the Government, on failure of the condition relating to re-exportation of a vehicle covered by the Customs Convention on the temporary importation of private road vehicles, when the vehicle is absolutely confiscated under Section 122 read with Section 111(o) of the Customs Act, 1962 and the amount received after its auction falls short of the customs duty leviable thereon on importation. In this connection, are also relevant the provisions of Clause 11(l)(m) of the Imports (Control) Order, 1955. 2. The question was first considered by this Department, vide our U.O. note No. 21495/84(B), dated 11-4-1984, and it was opined that the Federation was bound to make payment towards the customs duty as its obligation did not end by confiscation of the vehicle. 3. The point seems to have been confused in further reference made to this Department. The cause of confusion appears to be the assumption of the administrative Department that "in cases where the goods are absolutely confiscated, the question of payment of duty does not arise", vide their U.O. note No. 575/II/82-LC.II, dated 8-1-1966. 4. The Supreme Court in the case of Union of India v. M/s Security and Finance (P ) Ltd. - AIR 1975 SC 2288, as regards the dichotomy of import duty chargeable under Section 20 and the penal complex set out in Sections 182, 183 and 184. In the light of the provisions of the Customs Act, 1962, import/export duty is an obligation cast by Section 12, it is a tax, not a penalty; it is an innocent levy once exigible event occurs; it is not a punitive import for a contravention of the law; confiscation, penalty and fine provided for under the Act are of the species of punishment for violation of the scheme of prohibition and control. The importation attracts duty which any importer, licit or illicit, has to pay the moment customs barrier is crossed. Import duty has to be paid inevitably by the importer. Confiscation or fine in lieu thereof is an infliction on the offender or circle of offenders falling within the Act. Sometimes, the burden in both the cases, falls on the same person. At other times, they may fall on different persons. In some cases, the importer as well as the confiscatee may be identified and so the duty and the penalty may be imposed validly. In other cases, it may be difficult to get at the actual person who imported or was concerned in offence of importation contrary to the prohibition or restriction clamped down by the law. In that event only confiscation, alternatively, fine, may be imposed. 5. In short, the obligation under Section 12 of the Customs Act, 1962 is independent of the liability under various provisions relating to the punitive scheme of the Act. Whether the goods concerned have been ordered to be released on payment of fine in lieu of confiscation under Section 125(l) or an absolute confiscation thereof has been ordered does not make any difference as regards payment of the customs duty leviable under section 12 by the importer concerned. 6. In the instant case, the Federation is liable under the agreement to pay the customs duty leviable but for the exemption, as if the vehicle has been imported by it. 7. Accordingly, we reiterate our earlier opinion quoted above. Department of Revenue Sd/- Ministry of Law Justice, (B.A. Agrawal) Deptt. of Legal Affairs; Deputy Legal Adviser Advice (B) Section 24-3-1988 U.O. No. 20650/88, 25-3-1988