Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2013 (8) TMI 273

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... he amount - assesse was granted immunity from prosecution under the Customs Act - Jurisdictional Commissioner was directed to discharge the bank guarantee and indemnity bond, furnished by the applicant for provisional release of the impugned vehicle, after realizing the above mentioned differential Customs duty, interest, fine and penalty. Immunity u/s 127H –Held that:- Immunities were granted u/s 127H (1) - Attention of the applicant was also invited to the provision of Section 127H (2) & (3) - The order of settlement shall be void u/s127C (8) - if the Settlement Commission subsequently finds that it had been obtained by fraud or misrepresentation - Order of settlement applied only to the applicant in the case - It does not apply to other noticees to the Show Cause Notice – Decided in favor of Assesse. - - - 115/Final-Order/Cus/RKT/2012 - Dated:- 19-10-2012 - Shri K.C. Singh, Vineet Kumar and A.P. Verma, JJ. Shri M.H. Patil, Advocate, Vikas Khare, Company Secretary, T.C. Nair, Advocate and Ms. Manasi Patil, Consultant, for the Assessee. Shri D.S. Mehta, S.I.O. and Ms. Suma Appukuttan, I.O., DRI, MZU, Mumbai, for the Department. ORDER This order disposes of t .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... d interest for late duty payment under Section 47(2) of the Customs Act, 1962 (total Rs. 36,30,697/-) were paid vide TR-6 Challan dated 30-6-2008. The car was registered with office of Registering Authority, Pune, Maharashtra under registration number MH-12-EW-8100. 1.3 During further investigations conducted by DRI, Mumbai, the applicant paid, on 18-11-2008, an amount of Rs. 25,82,531/- through Demand Draft No. 856634 dated 14-11-2008 [of Bank of Maharashtra, Andheri (West) Branch, Mumbai] considering the value of the said car as Rs. 43,70,300/- (CIF) as against a declared value of Rs. 24,58,855/- (CIF). The said car was seized by officers of the DRI, Mumbai, vide Seizure Memo No. DRI/MZU/B/lnv-07/2008-09 dated 19-12-2008 under the reasonable belief that the same was imported by mis-declaration of value of the same at the time of Customs clearance and hence, liable to confiscation under provisions of the Customs Act, 1962. Vide Supratnama dated 19-12-2008, the said car was handed over to the applicant for safe custody. In the meantime, the applicant paid an amount of Rs. 1,58,136/- as interest for delayed payment of the Customs duty. 1.4 For provisional release of the said car .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... t under Section 127C(1) of the Customs Act, 1962. Due to non-receipt of the reply from the applicant and owing to prima facie fulfilment of the conditions for filing application for settlement, the application of the applicant was deemed to have been allowed to be proceeded with vide Bench s order dated 11-4-2012 on file. 2.3 Vide fax letter dated 14-4-2012, (original copy received on 18-4- 2012) which was received in the Secretariat of the Commission on 16-4-2012, the applicant submitted the following vide her reply to the notice dated 27-3-2012 issued under Section 127C(1) of the Customs Act, 1962. i. As stated in para 3 of the application, at the time of assessment of imported goods, the Appraising Officer pointed out that the new vehicle should be imported from country of manufacture as stipulated in Import Licensing Note (2)(II)(iv) of Chapter 87 has not been complied with. In the instant case, the goods have been manufactured in Japan and the same has been 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 this case, Type of Approval/Certificate has not been iss .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... all within 180 days from the date of seizure. The date of seizure as mentioned is 19th December, 2008. The applicant has therefore submitted that the present application is entertainable as per Section 127B of the Customs Act, 1962. Jurisdictional Commissioner s report : 3. Vide Commission s letter dated 13-4-2012, the jurisdictional Commissioner i.e., the Commissioner of Customs (Imports), JNCH, Nhava Sheva was asked to submit his report under Section 127C(3) of the Customs Act, 1962. A copy of the same was endorsed to the ADG, DRI, MZU, Mumbai. No report has been received from the jurisdictional Commissioner. However, vide his report dated 22-5-2012 the ADG, DRI, has submitted that the SCN in the present case has not been issued so far therefore, the application appears to be premature. The investigations in the matter are in final stages and a SCN would be issued shortly. In view of the same, it has been prayed that the application may be either rejected as premature or be kept pending till issue of SCN. Issue of the SCN dated 12-6-2012 : 4.1 Vide Commission s letter dated 25-5-2012, the DRI was directed to issue the SCN by 15-6-2012 positively. Accordingly, the ADG, DRI .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... r in the name of the applicant were done by Shri Jagdish Kadam, who happens to be a relative of the applicant. Shri Jagdish Kadam is also a business associate of Shri Ram Nimbalkar. 4.5 During his statement recorded on 21-10-2008, Shri Kailash Palany admitted that the actual cost of the said vehicle was US $ 1,05,000 and US $ 5,000 was charged for shipping, freight and paper work, therefore the effective price of the same was US $ 1,10,000. The said invoice dated 14-2-2008 was made for US $ 57,050 (i.e., Rs. 23,00,000/- approx.) for the purpose of submitting the same to the Customs authorities for payment of Customs duty. He also admitted that the balance Rs. 22 Lakhs was to be paid by the client in cash. 4.6 In his statement dated 11-11-2008, Shri Jagdish Kadam admitted to have negotiated with Shri Kailash Palany for purchase of three Land Cruiser cars (diesel version) in December, 2007/January, 2008 for US $ 1,10,000 (i.e. Rs. 44,00,000/-) each. It was also decided that the payments would be made only as per the invoice of the car and as per Customs Challans. As per advice of Shri Kailash Palany an amount equivalent to US $ 57,050 (INR 22,66,597/-) was remitted to the oversea .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... fore this office whenever required till completion of proceedings under the provisions of the Customs Act, 1962. 4.9 Vide letter F. No. DRI/MZU/B/lnv-07/2008-09 (Part 6), the DRI made reference to M/s. Toyota Kirloskar Motor, Karnataka (representative of the parent company M/s. Toyota Motor Corporation) with a request to ascertain the technical specifications of the said vehicle from the manufacturer. Vide their letter dated 19-11-2008 M/s. Toyota Kirloskar Motor submitted the vehicle information from their principals M/s. Toyota Motor Corporation. The details are as under : Chassis No. : VDJ 200-4012820 Model : VDJ200R-GNTEZQ Engine No. : 0024141 Month Year of Mfg. : 5-3-2008 Manufacturing Country : Japan Country of First Sale : New Zealand 4.10 Scrutiny of the import documents, pertaining to clearance of the said vehicle, cleared in the name of the applicant received from the clearing agent i.e. M/s. Tulip International, revealed as under :- (a) The vehicle was shipped from Tauranga, New Zealand to Nhava Sheva in container No. TGHU2687167, on board vessel Bu .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... icant. In the said Bill of Lading, the company which supplied the said car to the applicant i.e., M/s. Pride City General Trading LLC, Dubai was shown as only the notify party. Since the said car was declared as New the benefit of Notification No. 21/2002 dated 1-3-2002 was given to the applicant and the Basic Customs duty was accordingly assessed at the rate of 60%. However, since the said car was Second-Hand , benefit of the said Notification No. 21/2002 dated 1-3-2002 was not available to the applicant, therefore, the Basic Customs duty was to be assessed at the rate of 100%. Based on the same, the DRI assessed the value of the said car as Rs. 47,88,410/- and the total duty payable as Rs. 79,98,081/-. The applicant had paid a Customs duty of Rs. 28,28,372/- at the time of clearance of the said car, therefore the differential duty was calculated to be Rs. 51,69,709/- (against which, the applicant has admitted an additional duty liability of Rs. 25,82,531/- in her settlement application). 4.13 The SCN dated 12-6-2012 has been issued to six persons and one firm namely (i) Smt. Sunetra Pawar (applicant), (ii) Shri Kailash Palany, (iii) Shri Rajesh Jethani, (iv) Shri Charanjit S .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... of the Foreign Trade Policy 2004-2009 and para 2.8 of the Handbook of Procedures] and Section 111(m) of the Customs Act, 1962; (viii) The Bank Guarantee of Rs. 11,97,110/- given at the time of seeking provisional release of the impugned vehicle should not be encashed and appropriated towards the fine and penalty that may be imposed in the adjudication proceedings. 4.15 The applicant has also called upon to show cause to the Adjudicating Authority as to why penalty under Section 112(a) and/or Section 112(b), Section 114A and Section 114AA of the Customs Act, 1962 should not be imposed on her, in relation to the said vehicle. Hearing held on 26-6-2012 : 5.1 Hearing in the case was held on 26-6-2012. None represented the applicant. Neither any intimation was received from the applicant regarding non-appearance. The Jurisdictional Commissioner was represented by Shri D.S. Mehta, Sr. Intelligence Officer and Ms. Suma Appukuttan, Intelligence Officer, DRI, MZU, Mumbai. 5.2 During hearing, representative of the jurisdictional Commissioner stated that the said vehicle is a second-hand one because ownership of the same has changed from M/s. Crown Toyota, Papamoa, New Zealand to M .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 7.1 Hearing in the case was held on 18-9-2012. The applicant was represented by S/Shri M.H. Patil, Advocate, Vikas Khare, Company Secretary, T.C. Nair, Advocate Ms. Manasi Patil, Consultant whereas the jurisdictional Commissioner was represented by Shri D.S. Mehta, Sr. Intelligence Officer and Ms. Suma Appukuttan, Intelligence Officer, DRI, MZU, Mumbai. 7.2 Explaining the facts of the case in detail, the ld. Advocate, Shri Patil stated that the applicant has accepted the valuation done by the DRI in the Show Cause Notice for the impugned car. However, he said that the impugned car is new and therefore the applicant is entitled to avail the exemption Notification 21/02-Cus., dated 1-3-2002. On a query from the Bench whether the impugned car was registered before importation, the ld. Advocate said that he does not have this information. He pointed out that Order-in-Original passed by Commissioner of Customs in respect to impugned car No. 148/08 CC (I), dated 4-7-2008 confirms that the car was new as well as not registered before its importation. The ld. Advocate accepted the duty amounting to Rs. 25,82,531/- along with interest of Rs. 1,58,136/- which is arrived at after avail .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... gation by DRI, the value of the car which was declared as Rs. 24,58,855/- CIF in the B/E dated 7-6-2008 was revised by them to Rs. 47,41,000/- CIF. 8.2 The SCN further proposed to deny the benefit of lower duty under Notification No. 21/2002-Cus., dated 1-3-2002 (Serial No. 344) claimed by the applicant as the vehicle imported was considered as not new . 8.3 The applicant has not contested the alleged undervaluation in the SCN and has accepted the revised valuation of Rs. 47,41,000/- CIF. She has paid the differential duty of Rs. 25,82,531/- on this count along with interest amounting to Rs. 1,58,136/-. The total differential duty, however, as demanded in the SCN, is Rs. 51,69,709/- as the benefit of Notification No. 21/2002-Cus. (Serial No. 344), dated 1-3-2002 claimed by the applicant is considered not admissible. 8.4 A perusal of the evidence on record shows that the impugned vehicle was manufactured by OEM on 15-3-2008 in Japan and sold thereafter to one M/s. Crown Toyota located in New Zealand. The vehicle was dispatched to Kolkata port from New Zealand under B/L dated 18-5-2008 and the importer filed B/E No. 874251 dated 17-6-2008 for clearance of the vehicle at JNCH P .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... t of Rs. 1,58,136/- (Rupees one lakh fifty-eight thousand one hundred thirty-six only) towards interest liability. The accuracy of the interest calculation should be verified by the Revenue and any further amount, if payable, should be paid within 30 days of this order. Fine : The Impugned vehicle, seized vide seizure memo No. DRI/MZU/ B/lnv-07/2008-09 dated 19-12-2008, and released provisionally to the applicant is found liable to confiscation on the grounds stated above. The same is ordered to be released on payment of redemption fine of Rs. 2,00,000/- (Rupees two lakhs only). Immunity is granted to the applicant from payment of redemption fine in excess of the above amount. Penalty : The Bench imposes a penalty of Rs. 1,25,000/- (Rupees one lakh twenty-five thousand only) on the applicant and grants immunity from payment of penalty in excess of the said amount. Prosecution : The applicant is granted immunity from prosecution under the Customs Act, 1962, in so far as this case is concerned. Bank Guarantee Bond : Jurisdictional Commissioner is directed to discharge the bank guarantee and indemnity bond, furnished by the applicant for provisional release of the i .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates