ORDER
P.S. Sekhon, Member (T)
1. After hearing both sides and considering the material on record it is found-
a) appellant had purchased a Mitsubishi Pajero car having chases no V-46-402 4851 & engine no 4M 40-AJ-3897 and having registration No. MH-01-R-29 through a broker Shri Vinay Saraf.
b) The car was imported by one Shri K.C. Mathew & cleared on BE no 279 dated 4.9.95 through Mumbai Customs under PN No. 202/(PN)192-97 dated 30.03.94.
c) The car was seized on 30.8.96, by DRI Officers, on the grounds that the said car was liable to confiscation under the provisions of Custom Act 1962. They conducted enquiries and issued a show cause notice on 27.03.98. This notice was issued to S/Shri K.C. Mathew, Vinay Saraf, Afzal Nadir Ali and the appellant herein asking to show cause why the car in question should not be confiscated, why penalty should not be imposed why the value of the car not be enhanced to Rs. 11,41,520/- and why the Bond executed by the appellant in the time of provisional release of the car should not be enforced. The importer i.e. Shri. K.C. Mathew did not care to reply to the notice, while others did.
d) At the personal hearing the proposal to challenge the confiscation of the car was made by Shri Gade. The Commissioner found
“The reason why the matters have come to this pass is that the DRI could successfully establish that the car in question was imported into Indian in contravention of ITC Public Notice No. 202/9297 dated 30.3.94. Import of a motor car into India of 1600 CC Engine capacity, is allowed when it is brought by a passenger returning to India. He should have used the car for atleast one year abroad. According to elusive Mathew, he purchased the car oil 30.4.94 for 80,000 Dirhams at Dubai. The department of ports and customs, Dubai in their letter dated 30.12.95 (30th again) informed Shri C. Rajan, Consul (Economic), Dubai that the said car with the chassis No. V.46-4024851 was imported into Dubai ex-PEN HF, Voyage No. 53 dated 23 3.95. So the car which was imported into Dubai on 23.3.95 could not have been under Shri Mathew’s use since 1994 nor could he have purchased it on 30.4.94 in Dubai. This letter was relied upon by the DRI and the persons concerned were given the copy of the said letter. In addition, the DRI also furnished to the noticees a copy of the delivery order No 30695 dated 24.5.95 of Faiz Hassan Saadi of Dubai duly authenticated by the Consul (Economic), Dubai, indicating that the car with the same chassis number as stated above was to be delivered in port Rashid after the arrival of vessel PEN HF. It looks that the chassis number was written on the delivery order in hand. The car was loaded in KOBE. The country of origin of the car is Japan. This evidence could have been controverted only by Shri Mathew. He did not do so. It is not even known whether he got to see the SCN letter and notices posted to his address returned undelivered. I considered that these documents are goods enough to establish that the car in question was not in the possession of Shri Mathew in 1994 and so could not have been used by him for one year prior to his departure in Aug, 95. In fact, the car itself was imported into Dubai only in March, 95. Nobody could have driven that car in 1994 in Dubai let alone the slippery Mathew. In so far as the contention that procedure under Section 47 excludes all clearances improperly made. In the present case, certain vital facts relating to the car were mis-stated by the importer at the time of clearance. Any order passed under Section 47 in pursuance of such mis-declaration be challenged by the Deptt. without having to have such orders set aside. I hold that the car imported in contravention of ITC provisions is liable to confiscation under Section 111(d) of the Customs Act.
There is this little question of valuation. In view of the various mis-declarations made by the importer, the declared value has to be rejected. For the same reason, even the assessed value needs to be modified. The revised value proposed in the SCN is Rs. 11,41,520/- as against the value of Rs. 6,58,703/- taken for assessment on the basis of mis-declarations made by the importer. The basis on which the value is arrived at was communicated to Shri Gade and others. They did not dispute this basis. I hold that the DRFs contention that the revised value of the impugned car is Rs. 11,41,520/- goes uncontested. The differential duty of Rs. 5,32,004/- is demandable under Section 28 of the Customs Act. The notice also proposes to charge interest under Section 28AA of the Customs Act. It is payable if Shri Gade does not pay the differential duty now demanded within three months of the receipt of this order. Since the year of manufacture is mis-declared, the car is liable to confiscation under Section 111(m) of the Customs Act.
The consultant representing Shri Gade made a point during the course of P.H. that the department did not establish that the car was indeed manufactured in 1995. I observe that the invoice and registration paper mad in Dubai are documents which cannot be relied upon. The department could establish that the car was imported into Dubai in March, 1995. The conclusion of the department that the car is made in 1995 cannot be seriously questioned in the light of this evidence. In any case nothing prevented Shri Mathew to contest this, I hold that the car is of 1995 make. His affidavit has no evidentiary value.
The department proposed penalties on all and sundry. In fact the only persons on whom penalties are not proposed are the Traffic constables who may have watched the car plying on the road and Mrs. Nargiz Nadir Ali who complained that her husband was doing nothing
Now under Section 112(b) any person etc who has knowledge of the fact that the goods he is dealing in are smuggled ones can be penalized. Investigations made by DRI do not suggest that S/Shri Nadir Ali, Afzal, Vinay and even Shri Gade have any knowledge that the car, which they were dealing in, was smuggled into the country. Both the consultants forcefully argued on this issue and cited considerable case laws. I agree with their contentions. I conclude that the four persons mentioned above are not liable to any penalty under Section 112(b) of the Customs Act, 1962.
Show Cause Notice proposes penal action under Section 114(A) of the Customs Act on Shri K.C. Mathew, He is one of the persons from whom differential duty is demanded under Section 28 of the Customs Act. He is the person chargeable with the duty and such a charge would have been correctly and fully made had he not suppressed material facts at the time of import. Such a person is liable to penalty under Section 114(a) of the Customs Act even though some other person (Shri Gade) has to discharge the burden of differential duty under Section 125(2) of the Customs Act in the present case as the car is seized from his possession. The total duty short-levied works out to Rs. 5,32,004/-. Penalty equivalent to this amount can be imposed on Shri K.C. Mathew under Section 114(A) of the Customs Act.
Shri Gade deposited Rs. 20 lakhs when the car was released to him. The car itself is not available for confiscation. However, in terms of the bond executed by him the differential duty and fine in lieu of confiscation are to be adjusted.
And ordered confiscation of the car under Section 111(a) & 111(m) & ordered the appellants to pay a fine of Rs. 4 lakhs in lieu of confiscation & also required him to pay duty of Rs. 5,32,004/- under Section 125(r) read with Section 28 of the Customs Act 1962 along with interest under Section 28AA & did not impose any penalty on the appellants and others except on Shri Mathew under Section 114 (A) of the Customs Act 1962.
e.) The appellant contests the valuation. The adjudicator finds that Shri Gade the appellants did not dispute the basis of the valuation which was communicated to the notices. Therefore he holds the valuation of the car to be Rs. 11,41,520/- which goes unaccounted & that was the reason to arrive at a liability to confiscation under Section 111(m). However, this valuation arrived based on the formula applicable for valuation of cars as applicable by taking the imported car being of 1995 model the following submissions were made on behalf of the appellant before the adjudicator, by reply dt June 30, 1998.
“6. Coming to the second allegation that the said car is liable to confiscation under Section 111(m) of the Customs Act, 1962, on the ground that the car is of 1995 Model against 1994 declared in the Bill of Entry, the following submissions may please be appreciated by the Hon’ble Commissioner:-
a) There is no evidence produced in the show cause notice other documentary or by way of statements recorded under Section 108 of Customs Act 1962 in support of the allegation that the car is of 1995 model. The allegation regarding car being of 1994 is vague unspecific and is totally nebulous. There is not even a mention about the car being of 1994 in any paras excepting para 20.8, 21 & 23 (c), which for the purpose of ready reference are being reproduced below:-
Para 20.8
The said car is having capacity 2800 CC, Diesel and the year of manufacture is 1995 as seen from import into Dubai and is not 1994 as declared at the time of import. Import of Car into India under P.N. No. 202/92-97 requires that the car should have been in use of the person importing the car under T.R. for more than one year. The benefit of the said Notification is therefore not available to the said car.
Para 21
It appears that the said car Mitsubishi Pajero having chassis No. V-46-4024851 and Engine No. 4M 40AJ 3897 and valued at Rs. 11,41,520/-being a Model of 1995 imported in the name of Shri K.C. Mathew is liable for confiscation under Section 111(d) of the Customs Act, 1962, read with Foreign Trade (Development and Regulations) Act, 1962 also under Section 111(m) of the Customs Act, 1962, as the material particulars for the age of the car possession and use of the car abroad for more than one year by Shri K.C. Mathew, have been mis-stated for the purpose of clearance of the car to the Customs.
Para 23 (c)
Should not be assessed to value of Rs. 11,41,250/- being a car of 1995 as against value of Rs. 6,58,703/- assessed at the time of Customs clearance based on declaration regarding the year of manufacture of car as 1994 and differential duty of Rs. 532,004/- along with interest, should not be demanded under Section 28 and Section 28 AA respectively of the Customs Act, 1962.
b) The allegation is based on the conclusion that the said car was imported into Dubai in the year 1995 and hence is of Model 1995. This is an assumption. Even if it is admitted for the sake of argument that the said car was imported into Dubai in the year 1995, it cannot be concluded that the car is of 1995 Model as it will amount to a conclusion that all the cars imported in the year 1995 into Dubai will be of 1994 Model and the cars manufactured in earlier years cannot be exported into Dubai.
c) Without prejudice to what has been stated above, the allegation is being based on a photocopy of the Bill No. 2075117 dtd. 28.5.95 and in view of my submissions made in para 5 above, the bill No. 2075117 dtd. 28.5.95 does not have any evidential value and thus nothing can be proved with the help of the Bill No. 2075117.
7. The car is proposed to be assessed at a value of Rs. 11,41,520/- on the grounds that the sold car is of 1995 model and in view of my submissions, the allegation regarding car being of 1995 model remains unnroved, and hence the assessment of the car at a price of Rs. 11,41,520/-also does not survive.
The impugned order is silent on these vital contentions raised. The order of valuation enhancement and liability to confiscation under Section 11(m) and recovery of duty and interest therefore cannot survive, as car can not be conclusively held to be of 1995 model/make
f) the car cannot be conclusively determined to be of 1995 model would be confirmed by the following submissions made-
The show cause notice refers to Bill No. 2075117 dtd. 28.5,95 and arrives at a conclusion that the said car arrived in Dubai on 23.5.95. The scrutiny of this said Bill No. 2075117 reveals as under:-
“The description of the goods in the bill No. 2075117 dtd. 28.5.95 is ‘602 cartons used Auto Parts and Tyres’. In the said column there are some hand written markings which appear to be VHP -402 4851, V44-454 2889 LN -……(document is not legible).”
Thus the Ld Commissioner may appreciate that the description of the goods given as 602 cartons containing used Auto Parts and Tyres goes as to prove that this documents is not having any relevance with the car which is the subject matter of the present proceedings. Thus the same should be discarded straightaway and no reliance can be placed on such a documents where even the description of the goods does not tally with the present import.
Without prejudice to what has been stated above, it may please be appreciated by the Hon’ble Commissioner that the Bill No. 2075117 dtd. 28.5.95 otherwise is not admissible as an evidence in view of the judgment of the Hon’ble Supreme Court of India in the matter of Collector of Customs, Bombay v. East Punjab Traders, 1997 (89) ELT 11(SC).
On which the adjudicator has not arrived at any finding. We would find these submissions to confirm the over view that the car cannot be proved to be made/manufacture or of 1995 model to upset the valuation as arrived in the BE at the time of clearances.
(g) The fact of import of the car with chasis no V-46-4024851 imported in to Dubai on after 23.3.95 as per letter of Shri. C. Rajan Counsel (Economic) Dubai would only lead to establish that the said car may not be in use of Shri Mathew since 1994, even if he had purchased by payment of 80,000 Dirham in 30.4.94. The Public Notice 20/92-97 dated 30.3.94 prescribes “a use” and not mere purchase/ownership which may be constructive or real while ‘use’ would be of a nature resulting from more than a constructive possession. In any case, Mathew has by not replying to the show cause notice not cared to prove a real possession to prove ‘use’ out side Dubai. The confiscation under Section 111(d) therefore has to be upheld for violation of PN on that behalf.
(g) Since the confiscation under Section ratio 111(d) is to be upheld & the confiscation under Section 111(m) is not upheld since the car is not proved to be of 1995 make and the physical examination in the Docks has found acceptance by the Appraisers to be of 1994 make. In view of the same, the duty demands along with interest on enhanced value are to be set aside & redemption fine also is to be reduced. The Ld. Advocate for the appellants relies upon the order no 144/99/CAC/CC/dated 7.4.99 of Commissioner of Customs (Import) Mumbai wherein similar facts for a Pajero car imported in 1997 & sold & seized from M/s Kelogy was ordered to be confiscated only under Section 111(d) & released on redemption fine of Rs. 15000/- only after coming to a finding that the vehicle was cleared through Customs on the strength of fabricated documents and mis-declaration regarding the usage abroad as in this case. Since the car was purchased under a reasonable belief in this case also, one cannot come to a different finding. The fine in this case is therefore required to be reduced to the same amount of Rs. 15,000/- only & car be released to the appellant.
2) This appeal accordingly is to be allowed after setting aside the order of enhancement of valuation duty demand & interest demand & confiscation under Section 111(m). Confiscation under Section 111(d) upheld & redemption fine is to be reduced to Rs. 15,000/- & offered to the appellant herein.
3) This appeal allowed in above terms
Pronounced in Court on 20/05/2005