TaxTMI 
TaxTMI 
2026 (3) TMI 1546
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....porter neither responded to the notices nor came forward to clear the consignment. The vehicle was subsequently examined and referred for valuation, and the Automobile Association of Southern India (AASI), in its report dated 11.03.2021, certified that the vehicle was brand new and unused, having an odometer reading of 8 kilometres, and valued it at Rs.1,12,00,000/-. 2. Based on the said report, the department concluded that the vehicle had been mis-declared as used instead of new in the import documents and that the conditions applicable to the import of new motor vehicles under Chapter 87 of the Import Policy read with the Motor Vehicles Act, 1988 and Central Motor Vehicles Rules, 1989 had not been complied with. A show cause notice was therefore issued proposing confiscation under Section 111(d) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992 and penalty under Section 112(a). The adjudicating authority passed the Order-in-Original No. 84676/2021 dated 02.06.2021 ordering absolute confiscation of the vehicle and imposing a penalty of Rs.22,00,000/-. On appeal, the Commissioner (Appeals) upheld the confiscation but reduc....
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....umption. It was further contended that the adjudicating authority has not provided any cogent reasons for ordering absolute confiscation, particularly when the goods cannot be regarded as prohibited goods per se. According to the respondent, even if there has been non-compliance with certain regulatory requirements, such violations would at best render the goods liable for confiscation with an option for redemption, and not for absolute confiscation. 5.2 The Ld. counsel further argued that absolute confiscation creates a permanent stalemate, since the goods cannot thereafter be cleared either by the importer or otherwise, resulting in continued detention of the container and financial hardship to the custodian and the shipping line. It was submitted that the shipping line has already requested release of the container which has remained under detention for several years. The respondent also contended that ownership under Section 2(26) of the Customs Act is a fluid concept, and the mere mention of the respondent's name in the Import General Manifest cannot automatically fasten ownership for the purpose of confiscation and penalty. It was further argued that the valuation adopted ....
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....adjudicating authority had been reduced. Subsequently, the department filed a Miscellaneous Application seeking withdrawal of the appeal in view of the Government litigation policy. The Tribunal allowed the withdrawal of the appeal. 8.3 However, prior to the withdrawal of the appeal, the respondent had already filed cross-objections under Section 129A(4) of the Customs Act, 1962 challenging the order of the Commissioner (Appeals) insofar as it upheld the absolute confiscation of the vehicle. The respondent has therefore sought adjudication on the legality of the order of absolute confiscation. 8.4 Section 129A (4) of the Customs Act provides that a respondent, though he may not have filed an appeal, may file cross-objections against any part of the order appealed against and such cross-objections shall be disposed of by the Tribunal as if they were an appeal presented within the time specified. Thus, the statutory scheme clearly contemplates that cross-objections may be treated as an independent proceeding once they are filed. The legal position is well settled that the withdrawal or dismissal of the main appeal does not automatically render the cross-objections infructuous w....
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....kilometres. Based on the said report, the department concluded that the vehicle had been mis-declared as used instead of new and that the conditions prescribed under Chapter 87 of the Import Policy read with the Motor Vehicles Act, 1988 and the Central Motor Vehicles Rules, 1989 had not been complied with. On this basis, the adjudicating authority ordered absolute confiscation of the vehicle under Section 111(d) of the Customs Act, 1962. 9.3 The principal contention raised by the respondent is that even if the goods are liable for confiscation, the adjudicating authority ought to have granted an option for redemption under Section 125 of the Customs Act instead of ordering absolute confiscation. It therefore becomes necessary to examine the legal principles governing confiscation and redemption under the Customs Act. 9.4 The Hon'ble Supreme Court in Union of India vs Sampat Raj Dugar - 1992 (58) ELT 163 (SC) held that confiscation of imported goods does not automatically justify denial of redemption and that an option to redeem the goods should ordinarily be granted unless the goods are absolutely prohibited. Similarly, in Commissioner of Customs vs Atul Automations Pvt. Ltd.....
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....n option to redeem the vehicle on payment of appropriate redemption fine and applicable duties. 10.1 In view of the foregoing discussion, we hold that the cross-objections filed by the respondent are maintainable notwithstanding the withdrawal of the departmental appeal in view of the Government Litigation Policy relating to monetary limits, as the cross-objections raise independent issues concerning the legality of the order of absolute confiscation. On merits, we find that although the imported vehicle, declared as a used vehicle, has been found to be brand new and imported without complying with the conditions prescribed under Chapter 87 of the Import Policy read with the Motor Vehicles Act, 1988 and the Central Motor Vehicles Rules, 1989, thereby rendering it liable for confiscation under Section 111(d) of the Customs Act, 1962, but the goods cannot be regarded as goods whose import is absolutely prohibited. 10.2 In such circumstances, and in the absence of any exceptional reasons recorded for denying redemption, the order of absolute confiscation cannot be sustained. Accordingly, while upholding the finding that the vehicle is liable for confiscation under Section 111(d)....