2014 (6) TMI 750 - AT - Customs

Tribunal denies res judicata claim, orders pre-deposit for misdeclaration under TR Scheme

M/s MOTHER'S PRIDE EDUCATION PERSONNA PVT LTD Versus COMMISSIONER OF CUSTOMS

The Tribunal dismissed the company's argument invoking res judicata in taxation matters and directed the company to make a pre-deposit of Rs.5 lakhs ... Waiver of pre-deposit of duty and penalty - import of Toyota Land Cruiser Prada Car - Mis declaration of model of the car as 1996 model, which is actually 2003 - Held that:- Toyota Land Cruiser Prada Car was imported vide Bill of Entry No. 758637, dated 15.02.2005 under Transfer of Residence (TR) Scheme and valuation was determined after allowing trade discount and depreciation on this basis of 1996 manufacture as declared by the importer. Subsequently, DRI officers during investigation found that the said car in 2003 Model as evident from Registration Certificate of the car. Thus, it is a clear case of misdeclaration of year of manufacture of car. Accordingly, in the present proceeding the valuation of car was re-determined and demand of duty was raised and penalty was imposed. We find that earlier a proceeding was initiated in respect of the said car on different context, which has no relevant in the present proceeding - applicant failed to make out a prima facie case for waiver of pre-deposit of the entire amount of duty, interest and penalty - Conditional stay granted. Issues:Application for waiver of pre-deposit of duty and penalty based on misdeclaration of imported car's model year under Transfer of Residence (TR) Scheme.Analysis:The judgment involves multiple applications arising from a common order regarding the waiver of pre-deposit of duty and penalty. The main applicant, a company, sought the waiver of duty amounting to Rs.10,73,535, along with interest and penalty, while the other applicants, who are directors of the company, requested the waiver of penalties amounting to Rs.50,000 each. The crux of the matter lies in the misdeclaration of the model year of a Toyota Land Cruiser Prada Car imported under the TR Scheme. The importer declared the car as a 1996 model, but subsequent investigation revealed it to be a 2003 model, leading to a re-determination of valuation, duty demand, and penalty imposition. The company argued that a previous adjudication order had already dealt with the matter of confiscation and redemption of the car, invoking the principle of res judicata. However, the Tribunal held that res judicata does not apply in taxation matters, dismissing this argument.The Tribunal, after hearing both sides and reviewing the records, established that the importer had misdeclared the model year of the car, resulting in a revised valuation and imposition of duty and penalty. The Revenue's representative highlighted a joint agreement between the original importer and the company for securing a bank loan, indicating the company's involvement. Consequently, the Tribunal found that the company failed to establish a prima facie case for the complete waiver of the duty, interest, and penalty. As a result, the Tribunal directed the company to make a pre-deposit of Rs.5 lakhs within six weeks. Upon compliance with this directive, the balance of the adjudged dues against all applicants would be waived, and recovery stayed pending the appeal's disposal. The deadline for compliance was set for May 15, 2014.In conclusion, the judgment addresses the issues of misdeclaration of the imported car's model year under the TR Scheme, the application for waiver of pre-deposit of duty and penalty, and the invocation of the principle of res judicata in taxation matters. The Tribunal's decision to require a partial pre-deposit by the company while staying the recovery pending appeal reflects a balanced approach considering the circumstances of the case and the legal principles involved.