2016 (10) TMI 18 - HC - Customs

Customs settlement decisions upheld by High Court, emphasizing compliance and legal justification

The High Court upheld the decisions of the Customs & Central Excise Settlement Commission in allowing the settlement applications of the Respondent ... Import of car - high end luxury cars - new or used car - Denial of benefit of Notification dated 1st March 2002 as amended - confiscation of car under Section 111 (d) and 111 (m) of the Customs Act, 1962 - demand of differential customs duty and interest under Section 28AA of the Customs Act, 1962 - imposition of penalty under Sections 112, 114A and 114AA of the Customs Act, 1962 Held that: - the car was manufactured in Germany on 12th February 2010 and subsequently sold and shipped to the dealer in the U.K. and thereafter was exported by M/s Continental Motors, U.K. to India on 22nd March 2010. Given the proximity of the date of manufacture of the car and date of its import, it cannot be said the said car ceased to be a new car and became a 'second hand' car at the time of its import. Denial of benefit of notification, confiscation of car , demand of differential duty interest and penalty withheld - petition disposed off - decided in favor of petitioner. Issues:1. Justification of Customs & Central Excise Settlement Commission in allowing settlement application.2. Settlement of customs duty, penalty, and fine in W.P.(C) No. 746/2015.3. Settlement of differential customs duty, penalty, and fine in W.P.(C) No.7779/2015.4. Applicability of Notification No. 21/2002-Cus.Analysis:Issue 1:The primary issue in the writ petitions was whether the Customs & Central Excise Settlement Commission (CCESC) was justified in allowing the settlement application filed by the Respondent, M/s. Better Deal Machineries (P) Ltd. The Directorate of Revenue Intelligence (DRI) and the Commissioner of Customs questioned the validity of granting the benefit of Notification No. 21/2002-Customs dated 1st March 2002 to the Respondent. The High Court examined the facts and legal arguments presented by both parties.Issue 2:In W.P.(C) No. 746/2015, the Court reviewed the order dated 19th June 2014, which settled the customs duty, interest, penalty, and fine for the Respondent. The case involved allegations of undervaluation and wrongful availment of exemption notification. The Court analyzed the details of the case, including the show-cause notice issued, the settlement application filed by the Respondent, and the findings of the CCESC. Ultimately, the Court upheld the impugned order and disposed of the writ petition accordingly.Issue 3:W.P.(C) No.7779/2015 dealt with the order dated 30th March 2015, allowing the settlement application of the Respondent for differential customs duty, penalty, and fine. Similar to the previous case, this matter involved allegations related to import discrepancies and misuse of exemptions. The Court examined the show-cause notice, settlement application, and the report filed by the DRI before the CCESC. After thorough consideration, the Court upheld the impugned order and concluded the writ petition in line with the findings.Issue 4:The applicability of Notification No. 21/2002-Cus was a crucial aspect of both cases. The Court referenced relevant legal precedents and highlighted the interpretation of similar cases by the Supreme Court and other High Courts. The Court analyzed the specifics of the import transactions, registration dates, and compliance with customs regulations to determine whether the benefit of the notification was rightly granted by the CCESC. Based on the factual findings and legal arguments, the Court concluded that the impugned orders were not perverse and did not warrant interference. The Court also affirmed the other directions issued by the CCESC regarding interest, penalty, fine in lieu of confiscation, and immunity from prosecution.In conclusion, the High Court examined the issues comprehensively, considered the facts, legal arguments, and precedents, and delivered a detailed judgment upholding the decisions of the CCESC in allowing the settlement applications and granting the benefits under the relevant customs notification.