TaxTMI 
TaxTMI 
2013 (8) TMI 273
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....on 21-3-2012 and was registered as SA (C) 95/2012. Disclosures of the applicant : 1.1 The applicant has imported one brand new car 'Toyota Land Cruiser Diesel-V' having chassis no. JTMHV05JX04012820, from M/s. Pride City General Trading L.L.C., Dubai. An Invoice No. PJ43083 dated 14-2-2008 for US $ 57050 was issued for the said car by the said foreign supplier. The said vehicle was cleared from Customs at JNCH, Nhava Sheva vide Bill of Entry No. 874251 dated 17-6-2008 at a declared value of Rs. 24,58,855/- (CIF) and an assessable value of Rs. 24,83,443.55. The Customs duty assessed was Rs. 28,28,265.60. 1.2 At the time of assessment of the said car, the Appraising Officer pointed out that the new vehicle should be imported from the country of manufacture as stipulated in Importing Licensing Note (2)(II)(iv) of Chapter 87, which condition has not been complied with. In the instant case, the said car was manufactured in Japan and the same was imported from New Zealand. The Appraising Officer also pointed out that as per Licensing Note 7, Type Approval Certificate shall be from the country of origin. In the present case, the Type Approval Certificate has not been issued by an....
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.... the said car. 1.5 The applicant has submitted that based on the above facts she prays to settle the issue and grant immunity from prosecution for any offence under this Act and also either wholly or in part from imposition of any penalty and fine under the Customs Act, 1962. Application allowed to be proceeded with : 2.1 A notice dated 27-3-2012 under Section 127C(1) of the Customs Act, 1962 was issued to the applicant asking her as to why her application should be allowed to be proceeded with. 2.2 The following discrepancies were notified to applicant through the said notice dated 27-3-2012 issued to her under Section 127C(1) of the Customs Act, 1962 : i. The case in respect of impugned car has been adjudicated once by the Commissioner of Customs (Imp.), JNCH, Nhava Sheva. Therefore, the present application appears to be non-entertainable in view of the definition of a "case" as given in Section 127A(b) of the Customs Act, 1962. ii. As per the Seizure Memorandum dated 19-12-2008 the said car is detained under Section 110 of the Customs Act, 1962. It does not say that the goods are seized under reasonable belief that the same are liable to confiscation. Seizure a....
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....e Customs Act, 1962 and penalty of Rs. 2,00,000/- under Section 112(a) of the Customs Act, 1962 for redeeming the said car. The said penalty of Rs. 6,00,000/- and fine of Rs. 2,00,000/- was paid vide a TR-6 challan. Thus, the said case was independent of the present case and was only on the procedural non-compliance. The present application is with reference to the undervaluation of the car and the same was initiated after six months i.e. on 19-12-2008 from importation of the car (imported on 17-6-2008). Thus, it is not the case that the adjudication has already been completed and the applicant is approaching the Hon'ble Settlement Commission in respect of the case which has already been reached to the logical conclusion. ii. The applicant has invited attention to para 3 of the Seizure Memorandum, which clearly mentions that "there is reason to believe that the aforesaid Toyota Land Cruiser is liable to confiscation under the Customs Act, 1962. The Supratnama dated 19th December, 2008 also clearly states that "I have on this day received from Mrs. Vimmi Vaid, Intelligence Officer, DRI, Mumbai Zonal Unit, seized vehicle namely one white coloured Toyota Land Cruiser bearing regist....
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....pplicant only has approached the Settlement Commission for settlement of her case. 4.2 In the SCN the differential duty has been worked out to be Rs. 51,69,709/- as against an admitted additional duty liability of Rs. 25,82,531/-. The difference between the demanded differential duty and the admitted additional duty liability is on account of different rates of Basic Customs duty adopted by the DRI and the applicant. The DRI has considered the car as a 'Second-Hand' car attracting BCD of 100% whereas the applicant has considered the car as 'New' attracting BCD of 60% (as per Notification No. 21/2002-Cus., dated 1-3-2002). 4.3 As per the SCN dated 12-6-2012, based on intelligence that certain Mumbai based operators were engaged in the fraudulent import of high end cars/SUVs, investigations were taken up by the DRI, Mumbai Zonal Unit. During investigations, action was initiated against one person by name Shri Kailash Palany who was engaged in the business of import and trading of such vehicles. His residential premises were searched on 20-10-2008 and certain incriminating documents were taken over under Panchnama dated 20-10-2008. Scrutiny of the said documents revealed that Sh....
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.... of interest paid u/s 46(4) of the Customs Act, 1962]. The said fine and penalty was paid for violation of Import Licensing Notes to Chapter 87, in respect of 'Type Approval Certificate' vide Adjudication Order in F. No. S/26-Cus-50/08 V B (S/10-Adj-502/08 V B) dated 4-7-2008 of the jurisdictional Commissioner. On 18-11-2008, Shri Jagdish Kadam on behalf of the applicant paid Rs. 25,82,531/- towards differential duty liability. Subsequently, the applicant vide her letter dated 4-2-2009 paid Rs. 1,58,136/- on account of interest on delayed payment of differential duty. 4.7 In her statement dated 19-12-2008, the applicant stated that the said car was registered with the RTO authorities under registration no. MH-12-EW-8100. She also stated that the entire negotiation for import of the said car was done by her relative Shri Jagdish Kadam. The said car was seized under Seizure Memorandum F. No. DRI/MZU/B/lnv-07/2008-09 dated 19-12-2008 from the possession of the applicant on the reasonable belief that the same was liable to confiscation under the provisions of the Customs Act, 1962. The same was handed over back to the applicant for safe custody under Supratnama dated 19-12-2008. ....
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...., Dubai; (c) Upon arrival of the vehicle at Nhava Sheva, a Bill of Entry No. 874251 dated 17-6-2008 was filed by M/s. Tulip International (CHA No. 11/1395), classifying the vehicle under TI 87032491 (Chapter 87 of the Customs Tariff, 2008-2009) for clearance of the said vehicle in the name of the applicant; (d) The value of the vehicle was declared as USD 57050 CIF (equivalent to Rs. 22,66,597/-) on the basis of Invoice No. PJ43083 dated 14-2-2008 stated to have been issued by M/s. Pride City General Trading LLC, Dubai; (e) The vehicle was allowed clearance on payment of duty amounting to Rs. 28,28,372/-, fine and penalty (Rs. 8,00,000) for a total amount of Rs. 36,30,697/- assessed on the basis of the declared description and value mentioned in the above stated invoice. The import duty assessed as above was paid under TR-6 Challan No. 98502145 dated 30-6-2008. (f) The duty was paid under Demand Draft No. 855691 dated 27-6- 2008 respectively of Bank of Maharashtra and cash of Rs. 2325/-. 4.11 Based on the investigations, the DRI rejected the declared value as the same could not be con....
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....ser RHD (Chassis No. JTMHV05JX04012820), under Bill of Entry No. 874251 dated 17-6-2008, should not be rejected under the provisions of Section 14(1) of Customs Act, 1962, read with the provisions of Rule 12 of Customs Valuation Rules, 2007; (ii) The impugned vehicle should not be held as 'Second-Hand or Used Vehicle' in terms of Import Licensing Notes (1)(I) under Chapter 87 of ITC (HS) classification of Export and Import items; (iii) The value of the said vehicle for the purpose of Section 14(1) of Customs Act, 1962, read with the provisions of Rule 3 of Customs Valuation Rules, 2007 should not be redetermined on the basis of transaction value of Rs. 47,41,000/- CIF, as aforesaid; (iv) The benefit of Notification No. 21/2002-Cus., dated 1-3-2002 (S.N. 344) should not be denied while assessing the duty leviable on the impugned vehicle on the basis of above ascertained/re-determined value of Rs. 47,41,000/- CIF; (v) The differential duty amounting to Rs. 51,69,709/- leviable on the said vehicle on the basis of the re-determined value of Rs. 47,41,000/- CIF (assessable value of Rs. 47,88,410/- CIF) should not be demanded under the provisions of Section 28(1) of the Custo....
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....fer invoice of the car from Japan to New Zealand. (ii) Date of shipment of the car along with the Bill of Lading from Japan to New Zealand. (iii) Registration certificate, if any, issued in respect of the impugned car at Japan or at New Zealand. The representative of the jurisdictional Commissioner promised to get the said information and submit the same to the Commission within 30 days. 5.3 The representative of the jurisdictional Commissioner also said that there is no dispute regarding valuation of the car because the applicant has accepted the value determined by the Investigating Officers. He requested that a chance for hearing may also be granted to him if such a change of hearing is afforded to the applicant. Accordingly, a record of proceedings for the hearing was issued to all the concerned parties. Submissions of DRI, Mumbai : 6.1 Vide letter F. No. DRI/MZU/B/lnv-07/08-09/S.P., dated 5-7-2012, the ADG, DRI submitted that the issues involved in the Special Bench Order dated 9-5-2011, in light of which applications filed by S/Shri Ashish Purvankara and Noshir Mody were decided by the Hon'ble Settlement Commission, were examined in d....
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....cant to supplier of the car, it was stated by the ld. Advocate that the said amount is yet to be paid. The ld. Advocate finally said that the applicant has made true and complete disclosure of facts as well as Additional duty liability. The case may accordingly be settled. He left grant of immunities from fine, penalty and prosecution to the discretion of the Bench. 7.3 The ld. representative of the jurisdictional Commissioner, Shri D.J. Mehta, S.I.O, DRI stated that the payment of undeclared additional value of Rs. 22,00,000/- has been confirmed in the statement of Shri Kailash Palany. Regarding the grant of exemption under Notification No. 21/02, dated 1-3-2002, the ld. representative stated that the impugned vehicle was sold by the manufacturer to New Zealand dealer and thus the ownership has changed and therefore, exemption under aforesaid Notification cannot be granted in view of definition of the word 'New' in the Oxford dictionary. He, therefore stressed that exemption under aforesaid Notification should not be granted to the applicant and the entire amount of duty demanded in the Show Cause Notice, amounting to Rs. 51,69,709/- along with the applicable interest should be....
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....vehicle and deny it the benefit of Notification No. 21/2002-Cus. (Serial No. 344), dated 1-3-2002 (as a new vehicle) may not appear logical. A similar matter relating to requirement of registration of new vehicles prior to export in some countries and its effect on the admissibility of Notification No. 21/2002-Cus. (Serial No. 344), dated 1-3-2002 was examined by the C.B.E.&C. and a clarification issued vide M.F. D.R. Circular No. 1/2005-Cus., dated 11-1-2005. It was clarified that in such situation mere registration will not take away the benefit of Notification and proximity of the relevant dates e.g. date of registration of the car, date of its export, etc., should be examined to ascertain whether the vehicle imported was second-hand/used. Following the above clarification in the instant case it will be seen that a vehicle which was exported within three months of its manufacture by the O.E.M. cannot be considered as "second-hand"/"used" prior to its importation into India. 8.5 It is further observed that a similar matter was also examined by the Settlement Commission Special Bench vide order No. 01/CUS/2011 dated 9-5-2011 in the case of Shri Ashish Purvankara and Shri Noishi....