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TMI Blog2025 (5) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... importer had lived abroad for more than two years and he was eligible to bring a car into India. The car was registered on 14.06.2007 in the name of the said importer i.e., Mr. Arshad Vayal Peedika with Haryana Registration No. HR04-B-7070. 3. The Directorate of Revenue Intelligence (DRI), Mumbai Zonal investigated the imports of luxury cars. During the course of investigation, statements were recorded from various persons concerned with the importation of the above said car. On completion of the investigation, the officers of the DRI concluded that Mr. Sachin Joshi, who is the appellant herein, is the actual importer of the said car and accordingly, issued a Show Cause Notice dated 28.02.2018 to him on the allegation that the CIF value of the car was mis-declared as Rs.37,27,444/- whereas the correct value after allowing depreciation would be Rs.47,84,230/- and that the car was mis-declared as a new vehicle to pay duty at the rate of 113% as against the duty on used vehicles at the rate of 165% with a view to evade Customs duty. Accordingly, the said Notice inter alia demanded differential Customs duty of Rs.36,81,947/- in terms of the provisions of Section 28(1) of the Customs A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I also impose a penalty of Rs. 10,00,000/- (rupees ten lakh only) each on Shri Rajesh Jethani, Arshad Peedika, Shri Javed Desai, under Section 112(a) of the Customs Act, 1962 for their acts of omission and commission as discussed supra. 7.(ii) I also impose a penalty of Rs. 5,00,000/- (Rupees five lakh only) each on Shri Rajesh Jethani, Arshad Peedika, Shri Javed Desai under Section 112(b) of the Customs Act, 1962 for their acts of omissions & commissions as discussed above. 7.(iii) I also impose a penalty of Rs. 5,00,000/- (rupees five lakh only) each on Shri Rajesh Jethani, Arshad Peedika, Shri Javed Desai under Section 114AA of the Customs Act. 1962 for their acts of omissions & commissions as discussed above. 8.(i) I also impose a penalty of Rs. 2,00,000/- (Rupees two lakh only) each on Shri Suresh Halde, Manoj Baid and M/s. Baid Organization (CHA B-64) under Section 112(a) of the Customs Act, 1962 for their acts of omissions & commissions as discussed supra. 8.(ii) I also impose a penalty of Rs. 2,00,000/- (Rupees two lakh only) each on Shri Suresh Halde, Manoj Baid and M/s. Baid Organization (CHA B-64) under Section 112(b) of the Customs Act, 1962 for their acts of om ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ople were made victim by them is to be analysed prior to understanding the matter in case of Mr. Sachin Joshi. Without bringing the actual culprits, alleging that the victim is the reason for violations, is a travesty of justice and investigation. (iv) The actual Importer Mr. Arshad Vayal Peedika is a live person, not a fictitious person. Rajesh Jethani, Charanjit Singh, Suresh Halde have done the fraudulent import in collaboration or taking the help of Mr. Arshad Vayal Peedika and using Mr. Javed Desei, have found a victim in this appellant to cheat and sell the car. Mr. Sachin Joshi is a victim and is not the importer who paid the overseas suppliers or on whose TR or Passport goods are allowed clearance. (v) Respondent did not consider the Hon'ble Karnataka High Court's judgment in Commissioner of Customs, Bangalore v Five Star Shipping Co. Ltd. [2012 (278) ELT 196 (Kar.)] wherein it has been held that redemption fine cannot be imposed on bona fide purchaser. The allegations and findings that appellant was involved in criminal conspiracy and mis-declaration are without any evidence. Appellant is a bona fide purchaser, and the judgment squarely applies in the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redemption fine cannot be imposed on him. As the Appellant herein is neither 'importer' nor 'owner', Appellant is not liable to pay any differential duty under Sec 125(2). (x) Respondent relied on Hon'ble Madras High Court's judgment in Commr. of Cus. (Export). Chennai v Patel Engineering Ltd. [2015 (321) ELT 33 (Mad.)] to impose penalty under Sec 114A, which is wholly misplaced; the judgment was regarding imposition of penalty under Sec 112. (xi) Confiscation of goods cleared is arbitrary and contrary to Hon'ble Madras High Court's judgment in Nakoda Unique Gold Pvt Ltd. v Union of India [2014 (300) ELT 10 (Mad.)] - relevant paragraph is reproduced as under: "10. It is settled law that the goods cleared under Section 47 of the Customs Act, 1962 cannot be confiscated except in contemplation of an order or in pursuance of an order passed in revision under Section 129D of the Act. Such exercise of the revisional powers or correctional jurisdiction by a superior authority like the Collector of Customs can only be by calling for the records, examining the same on grounds of legality, propriety or correctness of the same and on examination of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sign any documents for clearance of the vehicle. He had no knowledge of any mis-declaration, undervaluation. Bill of entry is filed and declaration under the Bill of entry is given by the Importer to whom the overseas supplier has supplied the car as can be seen from the invoice, bill of lading and packing list; the car was registered in the name of the Importer post clearance. Appellant herein never met the Importer or the group who are the masterminds in the fraud. In view of this, the person liable to pay duty under the Customs Act is not the Appellant herein. Hence, demand of duty from Appellant does not sustain, imposing penalty under Sec 114A and Sec 114AA does not hold. (xv) Once penalty is imposed under Sec 114A, separate penalty cannot be imposed under Sec 114AA as is done in impugned matter. Judgment of CESTAT, Bangalore in Buhler India Pvt. Ltd. v Commissioner of Cus. & ST, Bangalore [2014 (310) ELT 593 (Tri-Bang.)] is relied upon and the relevant paragraph is reproduced as under: "10. As regards penalty under Section 114AA, we find that Section 114AA reads as follows "If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hicle was cleared at concessional rate of duty as applicable to cases of transfer of residence by using the passport no. E2603762 of Mr. Arshad Vayal Peedika. Thus, we observe that it is a case of baggage/transfer of residence and not a regular import. Mr. Arshad Vayal Peedika is the person who has availed the transfer of residence and hence, as per records, he is the actual importer in whose name the vehicle had been cleared by the Customs Authorities. The investigation found that the Customs duty had been paid by the appellant viz. Mr. Sachin Joshi and that the vehicle had also been subsequently registered and used by him for many years. However, we are of the view that the person who purchased the vehicle from the importer, in whose possession the vehicle was seized cannot be considered as the actual 'importer' of the vehicle. We observe that this view has been expressed in the case of Gagandeep Singh Anand v. Commissioner of Cus. (Import), Mumbai [2019 (367) E.L.T. 212 (Bom.)], wherein it has been observed as under: - "11. Regarding question Nos. (1) and (3) :- 9. (a) The undisputed facts are that the said car was imported by one Mr. Dholakia in 2002, who had filed the Bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DRI as the option to redeem has not been exercised. The importer of the said car is Mr. Dholakia who had filed the bill of entry and cleared the said car on payment of customs duty as assessed by the Officers of the customs. In fact, on identical fact situation, where the importer of the offending car was not traceable, this Court in VXL India Ltd. (supra) has held that the differential duty, if any, is to be only recovered from the importer in terms of Section 28 of the Act and the same cannot be recovered from the buyer of such offended goods. 14. (f) Moreover, the confiscation of the said car by the order dated 24th December, 2008 of the Commissioner of Customs contained an option to redeem the same by the appellant on payment of Rs. 8 lakhs as penalty. Admittedly, the appellant has not exercised the option to redeem the said car. The said car continued to be in possession of the Customs. Thus, not having exercised the option to purchase the car, the occasion to invoke Section 125(2) of the Customs Act, would not arise. The said car continues to vest in the Central Government by virtue of Section 126 of the Act. Under Section 125 of the Act, there is no obligation on a party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permitted under Section 111 of the Act. The provision for confiscation under Section 111 lists various contingencies in which such confiscation can be proceeded with and it includes Clauses (d), (m) and (o) which are applicable in the import of the subject vehicle. When confiscation is provided and the Commissioner takes proceedings against the said goods and effects such confiscation, then the goods becomes the property of the State. A mitigation is provided insofar as the owner of the goods, from whom the goods are seized, to opt for redemption under Section 125. On payment of redemption fine imposed under sub-section (1) and short levy of duty under sub-section (2) the owner is entitled to get released the goods. Redemption fine also has to be restricted to the market value of the goods. The payment of duty is not a consequence of the levy under Section 28, but the option exercised under Section 125. The owner from whom the goods are seized does not have the liability to pay the duty, but the goods involved in the import are liable to be confiscated and to save distress on the goods, if the owner, opts to redeem it under Section 25, there is an obligation to pay the duty and fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her than the importer. With respect to Question No. (b) as to a proper case in which a person other than the actual importer could be made liable to pay customs duty and redemption fine, we would not answer it since it does not arise here. With respect to Question No. (c), the imported goods on there being a short levy of duty along with interest, would be liable for confiscation. On such confiscation, the Government could sell the goods and realize whatever value is fetched on such sale. For any duty or interest still remaining with respect to the goods, the Department would have to necessarily proceed against the original importer and not against any subsequent purchaser, with respect to liability to pay duty as also redemption fine, we reiterate at the risk of repetition that; it is for reason of the option exercised to redeem the goods. The question (d) also is answered in favour of the Revenue and against the assessee, since the payment of duty and redemption fine is not on any joint and several liability but for reason of the option exercised to redeem the goods by the subsequent purchaser, however bona fide, from whom the goods were seized." 9. The decisions cited above ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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