Carnet temporary import exemption: tribunal finds no paid employment or gainful occupation; confiscation and penalties set aside

Carnet temporary import exemption was considered in light of whether the importer engaged in 'paid employment' or 'gainful occupation'; tribunal interpreted those terms narrowly, finding no evidence of employment or compensated business activity during the visit and noting ongoing foreign residency. Because ineligibility is intended to prevent prohibited activity while using the notification and allegations outside the import period were irrelevant, the confiscation lacked legal authority. Consequently the tribunal set aside the confiscation of the vehicle and the consequential fine and penalties imposed under the customs regime, allowing the appeal.

---

---

Issues: Whether confiscation of a vehicle and consequent fine and penalties under the Customs Act, 1962 were legally sustainable when the vehicle was imported under a valid CPD carnet and there was no evidence of the importer taking up paid employment or gainful occupation during the temporary visit, thereby affecting eligibility under Notification No. 296/76-Cus dated 2nd August 1976.

Analysis: The exemption for temporary importation against a carnet is intended for residents ordinarily resident outside the country and is not barred to citizens who meet the residency condition. The proceedings record neither an allegation nor evidence that the importer took up paid employment or engaged in gainful occupation during the particular temporary visit; ownership of business entities and receipt of returns without evidence of active management or remuneration for specific services during the visit do not, by themselves, establish disqualifying gainful occupation. The vehicle remained in customs custody and was not used. Ineligibility under the notification must be founded on activity during the particular visit and not on unrelated past or future business dealings. Confiscation under Section 111 and consequential fines and penalties require legal authority which is absent where the exemption legitimately applies.

Conclusion: Confiscation of the vehicle under Section 111 of the Customs Act, 1962 and the consequent fine and penalties under Sections 112 and 125 are set aside; the appeal is allowed in favour of the importer.

---