2010 (1) TMI 585 - AT - Customs

Confiscation upheld for non-compliant motorcycle under Customs Act

The court upheld the confiscation of a second-hand motorcycle due to non-compliance with EXIM Policy conditions, leading to the imposition of a redemption ... Respondent had imported a motorcycle gifted to him by his friend - Customs authorities, on first-check examination, found the motorcycle to be reconditioned - imports of second-hand vehicles were governed by the “Licensing Notes” under Notification No. 4 (RE-2001) / 1997-2002 issued by the DGFT - imported vehicle should not be more than three years old - importer should submit a certificate issued by a testing agency (notified by the Central Government) to the effect that the second-hand/used vehicle imported into India had been tested immediately before shipment to India and the vehicle conformed to all the Regulations specified in the Motor Vehicles Act, 1988 and the Rules made there under – Held that: - the conditions cannot be fulfilled by the respondent and, therefore, the direction of the lower appellate authority, contained in the last sentence of the impugned order, is incapable of being carried into effect - only consequence of non-compliance with this direction of the lower appellate authority or, in other words, non-fulfillment of “other terms and conditions of the notification” by the respondent is that the motorcycle will have to be re-exported - the respondent is liable to reexport the motorcycle and the departmental authorities are liable to enable him to do so. The Appellate Commissioner’s order for personal use of the motorcycle by the respondent in India is liable to be set aide. To this extent, this appeal is allowed. Issues:1. Import of second-hand motorcycle and compliance with EXIM Policy conditions.2. Confiscation of the vehicle under Section 111(d) of the Customs Act.3. Imposition of redemption fine and penalty under Section 112(a) of the Act.4. Appeal against the order of confiscation and penalties.5. Compliance with Notification No. 4 (RE-2001)/1997-2002 conditions.6. Dispute over fulfillment of conditions for clearance of the motorcycle.Detailed Analysis:1. The respondent imported a motorcycle gifted by an Australian friend, which was found to be reconditioned upon examination. The Customs authorities invoked the EXIM Policy 2002-07, specifically the 'Licensing Notes' under Notification No. 4 (RE-2001)/1997-2002, setting conditions for importing second-hand vehicles. These conditions included age restrictions and certification requirements from testing agencies. The respondent failed to fulfill many of these conditions, leading to the confiscation of the vehicle under Section 111(d) of the Customs Act.2. The Additional Commissioner of Customs ordered the confiscation of the motorcycle but allowed the option for re-export upon payment of a redemption fine. Additionally, a penalty was imposed under Section 112(a) of the Act. The Commissioner (Appeals) later permitted the clearance of the motorcycle for personal use in India with the payment of appropriate duty, fine, and penalty, without insisting on re-export.3. In the appeal, the department contended that the conditions specified in Notification No. 4 (RE-2001)/1997-2002 were impossible to comply with. The appellant highlighted specific conditions, arguing that non-compliance necessitated re-export. The respondent had paid the imposed fine and penalty but had yet to pay the appropriate Customs duty on the motorcycle.4. The appellate authority's decision was scrutinized, emphasizing that the respondent must fulfill all conditions outlined in the notification. It was noted that certain conditions, related to the pre-shipment state of the vehicle, could not be met at the current stage. As a result, the direction to allow the motorcycle's use in India was deemed unenforceable, leading to the conclusion that re-export was the only viable option due to non-compliance.5. The judgment ultimately allowed the appeal, setting aside the permission for personal use in India and affirming the obligation to re-export the motorcycle. The decision emphasized the necessity of adhering to the conditions stipulated in the notification, highlighting the inability to fulfill certain requirements post-importation, thereby necessitating re-export as the only viable course of action.