TMI Blog2019 (5) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... mission which has rendered the goods confiscated u/s 111 of the Act. There is no finding in the impugned order or even allegation in the showcause notice to the above effect. Similarly, the basis of the Revenue's contention that the appellant had abetted the illegal import of the said car by having financed the same is contrary to the facts on record - the appellant could not have in any manner abetted improper importation of the said car by financing it. Consequently, there is no basis to impose a penalty u/s 112(a) of the Act upon the appellant. Appeal allowed in toto - All issues decided in favour of the appellant and against the respondent Revenue. - CUSTOMS APPEAL NO. 67 OF 2018 - - - Dated:- 30-4-2019 - A.S. OKA M.S. SANKLECHA, J.J. Mr. Akhilesh Kangasia a/w Mr. Prakash Shah for the appellant Mr. Vijay Kantharia a/w Mr. Ram Ochani for the respondent JUDGMENT : (Per M.S Sanklecha, J.) 1. This appeal under Section 130 of the Customs Act, 1962 (the Act) challenges the order dated 28th July, 2017 passed by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal). 2. On 14th March, 2019 we passed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or a consideration of ₹ 12 lakhs. An amount of ₹ 10 lakhs was paid by Demand Draft and ₹ 2 lakhs was paid in cash towards the purchase of the said car by the appellant to Mr. Oberoi. At the time of purchase of the said car, the appellant had obtained finance from M/s. Kotak Mahindra Primus Ltd.. On purchase, the appellant got the registration of the said car transferred from the name of the importer / original owner to himself. This as Mr. Oberoi the immediate seller of the said car to the appellant had not registered the transfer of the said car in his name. 7. Thereafter, investigations were commenced by the Directorate of Revenue Intelligence (for short DRI ) and during the course of investigation, statement of the importer Mr. Dholakia, the first purchaser Mr. Oberoi as well as the appellant under Section 108 of the said Act were recorded. During the course of investigation, on 13th August, 2007, the said car was seized by DRI. Thereafter, a show-cause notice was issued on 30th August, 2007 demanding differential duty on account of correct valuation of the car (year of manufacture was 2002 and not 1997). This demand for differential custom duty was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the fine on 24th December, 2008. The appellant has not exercised the option to redeem the said car till date. (b) On the aforesaid facts, the Commissioner of Customs and the Tribunal has sought to recover the shortfall in duty payment on import of the car from the appellant. This even in the absence of the appellant redeeming the confiscated car. (c) Mr. Akhilesh Kangasia, learned Counsel appearing in support of the appeal submits that the appellant is not liable to pay differential duty as he is not the importer but a bona fide purchaser of the said car. The liability to pay the custom duty under Section 28 of the Act is on the Importer of the car and the same cannot be foisted on an innocent buyer of the said car. Moreover, the said car stood confiscated in 2008 with option to redeem the same on payment of fine, which option the appellant has not exercised. Thus, no occasion to apply Section 125(2) of the Act can arise. It is further submitted that the issue now stands concluded in favour of the appellant by the decision of this Court in Commissioner of Customs Vs. VXL India Ltd. (2006) 193 ELT 396. (d) As against the above, Mr. Kanthari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcised the option of paying the redemption fine and, therefore, the occasion to pay in addition to the redemption fine the duty and charges payable in respect of the offending goods, does not arise. In fact, this issue is no longer res integra as the Supreme Court in Fortis Hospital Ltd. Vs. Commissioner of Customs, 318 ELT 551 has held that the obligation to pay duty on the confiscated goods, would only trigger, when the person from whom the offending goods are seized / confiscated, exercises the option to redeem the confiscated goods. Therefore, where no such option is exercised, Section 125(2) of the Act is not set in motion. Similarly, this Court in VXL India Ltd. (supra) has upheld the view of the Tribunal taking a similar view. (g) Thus, the demand of duty could only be made upon the importer of the goods and not upon the person in whose possession / ownership the confiscated goods were found when the owner/ possessor of the confiscated goods does not seek to redeem the offending goods under Section 125 of the Act. (h) Therefore, for the above reasons, question no.(1) is answered in the negative i.e. in favour of the appellant and against the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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