TaxTMI 
TaxTMI 
2010 (10) TMI 319
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....1(d) & Section 111(m) of the Customs Act, 1962. However, I allow the importer an option to redeem the said vehicle on payment of Rs. 14,00,000/- (Rupees Fourteen lacs only) as redemption fine in lieu of confiscation, under Section 125 of the Customs Act, 1962. The option must be exercised within 30 days of receipt of this order by the importer. (e) I impose a penalty of Rs. 5,00,000/- (Rupees Five lacs only) upon the importer under Section 112(a) of the Customs Act, 1962." 2. The undisputed facts are : The appellant imported one unit of CHRYSLER 300C SEDAN RHD car describing the vehicle to be "New Chrysler - 300C RHD-W/ST ACCESS CH : 1C3H9E3D77Y592775 T.A. No. E11*2001/116*0141*08 dated 11-1-2007 (14-seater)" and declaring its assessable value to be Rs. 35,50,545/- (US$ 69,545) and also declaring its country of origin to be the United States. In the relevant Bill of Entry dated 4-5-2009, which was filed by the appellant for Customs clearance of the goods, the importer claimed classification under CTH 8702 10 19. The vehicle was manufactured by CHRYSLER, USA in August, 2007. It was imported by CHRYSLER, UK in December 2007 or January 2008 and was reg....
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....case: (a) Whether the vehicle imported by the appellant is new or old? (b) Whether it is classifiable under CTH 8702, as claimed by the appellant, or under CTH 8703, as claimed by the Revenue? (c) What should be the assessable value of the goods? (d) Whether the car is liable to confiscation under Section 111 of the Customs Act, and, if so, what should be the quantum of redemption fine? and (e) Whether the appellant is liable to be penalized under Section 112 of the Customs Act, and, if so, to what extent? Whether the vehicle is new or old : 5. The learned counsel for the appellant, reiterating the relevant grounds of the appeal, has submitted that the appellant imported a new vehicle which did not require any licence for importation. In this connection, the learned counsel has claimed support from Import Licence Note (2)(I) under Chapter 87, which defines "new imported vehicle" for purposes of the said Chapter. As per this definition, a new imported vehicle (including all the vehicles other than railway or tramway) for the purposes of Chapter ....
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....tinent to note that the car was manufactured in August, 2007 and was imported into India on 4-5-2009. It would be unconscionable to consider the car on the date of its importation into the country to be a new vehicle. Yet another piece of evidence which clearly indicates the second-hand nature of the vehicle is available at page 106, which is a certificate of the United States dealer who undertook the conversion of the vehicle into Stretched Limousine. It was certified that the total cost of the vehicle was US $ 69,545 inclusive of cost of conversion amounting to US $ 31,000 as per the relevant invoice. From these figures, it would appear that the vehicle underwent substantive changes at a high cost, at the end of the United States dealer who supplied the goods to the appellant. This document is accompanied by another document which specifies the various works done upon the vehicle including upgradation of the air-conditioning system, change of colour, improvement on television/stereo system, improvement on lighting system etc. The car which was black in colour and of a seating capacity of five while in the UK turned out to be a new Limousine of silver gray colour and all substanti....
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....icle was liable to confiscation under Section 111(d) of the Customs Act. The learned Commissioner has also ordered confiscation in terms of Section 111(m) after finding that the value of the vehicle had been misdeclared by the importer with intent to evade payment of appropriate duty. This aspect will be considered in another context later. For the present, we uphold the confiscation of the vehicle. Valuation issue : 8. The importer declared Rs. 35,50,545/- as the assessable value of the car. The adjudicating authority has enhanced the value to Rs. 54,62,939/- on the basis of the value of a contemporaneous import covered by Bill of Entry dated 11-2-09 which pertained to import of a similar CHRYSLER car into India from New Zealand. The learned counsel has argued that the Commissioner's order does not disclose any valid reason to reject the transaction value. There is no evidence of extra payment to the supplier, nor is there any allegation of relationship between the importer and the supplier. Therefore, according to the learned counsel, the transaction value should have been accepted under Section 14 of the Customs Act. In this connection, the learned counsel has relied ....
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..... For these reasons and for the further reason that no valid ground has been disclosed for rejecting the declared value, we are inclined to set aside the enhancement of value done by the learned Commissioner in this case. Apparently, the transaction value would reflect the basis of the assessable value of the goods under Section 14 of the Customs Act, in the absence of evidence against acceptability of that value. In this connection, many of the decisions cited by the learned counsel seem to be supportive of the appellant. 12. Having found no misdeclaration of value by the appellant, there is no reason to hold the goods to be liable to confiscation in terms of Section 111(m) of the Customs Act. Classification : 13. According to the appellant, the car imported by them is classifiable under CTH 8702 as "motor vehicle for the transport of 10 or more persons including the driver." The learned counsel submits that it is not in dispute that the car in the form it was imported had the seating capacity of 12 and therefore it should have been classified under the above heading. It is pointed out that CTH 8703 canvassed by the department is residuary to CTH 8702 and, there....
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....t. Naturally, the manufacturer of the motor vehicle in such a situation would explain that in India, any vehicle, before it is put on the road, is required to get a certificate from ARAI or VRDE. Further, the manufacturer would also explain that each and every vehicle manufactured in India, is required to be registered and get a registration number for plying on the road in India. In such a situation, the Assessing Officer would call for the certificate issued by the organization recognized for this purpose viz., ARAI or VRDE and if the certificate certifies that the vehicle is designed for carrying 10 persons, he would accept the classification claimed by the manufacturer. He may also verify the certificate of registration issued by the concerned transport authorities, if he is satisfied with the certificate issued by the organization required to certify the vehicle before it is put on the road; naturally he would not have to proceed further. This requirement arises, because as explained earlier, there has to be a standard, based on which a vehicle can be said to have been designed for the transport of 10 persons or more. These standards would be either available in standard text ....
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.... by the learned SDR, the ad interim stay granted by the Apex Court is against coercive recovery proceedings of the department and not against the operation of the Tribunal's order. We are, therefore, inclined to follow the view taken by this Bench earlier in the case of Mahindra & Mahindra Ltd. (supra). We think, this view will be quite appropriate in the instant case inasmuch as both sides have fairly submitted that neither the Commissioner nor even this Tribunal has the necessary expertise to determine the designed capacity of a motor vehicle. As held in the case of Mahindra & Mahindra Ltd., the assessing officer can call for a certificate issued by the organization required for this purpose, viz., ARAI Following the view taken by this Bench in Mahindra & Mahindra Ltd.'s case, we would hold that the adjudicating authority could obtain expert opinion from competent agencies/authorities such as ARIA and VRDE on the designed seating capacity of the vehicle and then proceed to determine its classification under the Tariff. The impugned order does not indicate that the learned Commissioner consulted any expert in the matter. One of the main grievances of the appellant is that the Comm....