Import policy for motor cars prevails over general second-hand capital goods permission; confiscation and valuation were upheld, penalty reduced.

Import of a second-hand motor car by a tour operator was held impermissible because the import policy treated motor cars as restricted goods and the specific entitlement regime for tourism entities prevailed over the general permission for second-hand capital goods. The confiscation was therefore upheld. Reassessment of the declared value was also sustained because customs valued the car by reference to the manufacturer's list price after trade discount and depreciation, a method accepted as consistent with customs practice. The penalty, however, was moderated in light of the facts and circumstances and reduced to a lower amount.

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Issues: (i) Whether import of a second-hand motor car by a tour operator was permissible under the import policy governing second-hand capital goods and restricted goods; (ii) Whether the reassessment of the declared value of the imported car was justified; (iii) Whether the penalty required interference.

Issue (i): Whether import of a second-hand motor car by a tour operator was permissible under the import policy governing second-hand capital goods and restricted goods.

Analysis: The import policy treated motor cars as restricted goods. Though the policy generally allowed import of second-hand capital goods, the specific provisions governing travel agents, tour operators and similar tourism entities regulated import of motor vehicles within prescribed entitlement limits. A specific restriction could not be overridden by invoking a general provision relating to machinery or capital goods. The confiscation therefore rested on the policy restriction applicable to motor vehicles.

Conclusion: The import was not permissible under the relevant import policy, and the confiscation was upheld.

Issue (ii): Whether the reassessment of the declared value of the imported car was justified.

Analysis: The declared value was rejected and the value was determined by reference to the manufacturer's list price, after allowing trade discount and depreciation. The valuation method adopted was consistent with customs practice for such goods, and no basis was made out for interference with the enhanced valuation.

Conclusion: The enhanced valuation was upheld.

Issue (iii): Whether the penalty required interference.

Analysis: Although confiscation and valuation were sustained, the facts and circumstances justified moderation of the penalty. The penalty was therefore reduced to a lower amount while maintaining the rest of the order.

Conclusion: The penalty was reduced.

Final Conclusion: The order of confiscation and reassessment of value was sustained, but the penalty was scaled down, resulting in only limited relief to the importer.

Ratio Decidendi: A specific restriction on import of motor vehicles cannot be defeated by relying on a general permission for import of second-hand capital goods, and customs valuation based on accepted depreciation principles will not be interfered with absent legal infirmity.

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