Full Judgment Text
2019:BHC-OS:9264-DB
Uday S. Jagtap 67-18-CUAPP-Jud=.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CUSTOMS APPEAL NO. 67 OF 2018
Gagandeep Singh Anand
nd
R/at 3/31, 2 Floor, Shivalik
Road, ,Malviya Nagar,
New Delhi – 110 017 .. Appellant
V/s.
The Commissioner of Customs
(Import), Mumbai having its
Office at Custom House,
Ballard Estate,
Mumbai – 400 001 .. Respondent
Mr. Akhilesh Kangasia a/w Mr. Prakash Shah for the appellant
Mr. Vijay Kantharia a/w Mr. Ram Ochani for the respondent
CORAM : A.S. OKA &
M.S. SANKLECHA, J.J.
nd
RESERVED ON : 22 APRIL, 2019
th
PRONOUNCED ON : 30 APRIL, 2019
JUDGMENT : (Per M.S Sanklecha, J.)
1. This appeal under Section 130 of the Customs Act, 1962 (the Act)
th
challenges the order dated 28 July, 2017 passed by the Customs,
Excise and Service Tax Appellate Tribunal (the Tribunal).
th
2. On 14 March, 2019 we passed the following order :
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“1 Appeal is admitted on the following substantial questions of
law.
“1) Whether in the facts and circumstances of the case,
the Appellate Tribunal is correct in upholding duty
nd
demand from the Appellant (2 buyer of the car)?
2) Whether in the facts and circumstances of the case, the
Appellate Tribunal is correct in upholding penalty of
Rs.3,00,000/ on the Appellant under section 112(a) of
the Customs Act,1962?
3) Whether in the facts and circumstances of the case, the
Appellate Tribunal erred in not deleting demand of duty
nd
from the Appellant (2 buyer of the car), since the
vehicle was seized by the customs on 13.8.2007 and
confiscated by the Order of the Commissioner dated
24.12.2008, with an option to redeem on payment of
fine under Section 125 of the Customs Act,1962, which
option was never exercised, and confiscation became
final?”
2 The learned counsel for the respondent waives service.
Considering the narrow controversy involved, the appeal can be
disposed of finally. For that purpose, though the appeal is
nd
admitted, the same shall be listed on Daily Board on 2 April
2019.”
nd
3. This appeal could not reach hearing on 2 April, 2019 and stood
adjourned from time to time. Today, the appeal reached hearing and
it was taken up for final disposal on the above substantial questions of
law.
nd
4. The brief facts leading to this appeal are that on 2 September,
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2002 one Mr. Kirit Dholakia imported a Toyota Land Cruiser Prado (for
nd
short “said car”) under bill of entry No. 291047 dated 2 September,
2002. At the time of import, it appears that Mr. Dholakia had
imported the said car under the Transfer of Residence Rule 2002 and
had shown the year of manufacture as 1997 and claimed depreciation
thereon. The said car was allowed to be cleared for home
consumption by the respondent Revenue.
5. Thereafter, Mr. Dholakia, the importer sold the said car to one
Mr. Oberoi. Mr. Oberoi on purchase of the said car from Mr. Dholakia
obtained the necessary documents duly signed by the importer which
would be required for the registration of the said car in his name.
However, Mr. Oberoi did not carry out the necessary formalities to have
the registration of the said car in his name.
6. Thereafter, in March, 2005, Mr. Oberoi sold the said car to the
appellant for a consideration of Rs. 12 lakhs. An amount of Rs.10 lakhs
was paid by Demand Draft and Rs. 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
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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
th
said Act were recorded. During the course of investigation, on 13
August, 2007, the said car was seized by DRI. Thereafter, a show
th
cause notice was issued on 30 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
issued jointly and severally on the importer of the car Mr. Dholakia, the
first buyer of the car Mr. Oberoi and the second buyer of the car – the
appellant. Besides, seeking to impose penalty and confiscate the said
car under Section 111 of the Act.
8. The appellant contested the demand for duty on the ground that
he was a bona fide purchaser of the car and the demand of duty and /
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or penalty can only be imposed upon the importer. It was also
submitted that no penalty be imposed upon him as he was not involved
in illegal import of the said car nor had he abetted the import of the
said car. Nevertheless, the Commissioner of Customs – the
th
Adjudicating Authority by a common order dated 24 December, 2008
confirmed the showcause notice and demanded differential custom
duty of Rs.8.86 lakhs from the appellant. Besides confiscating the said
car with an option to redeem the same on payment of redemption fine
of Rs.8 lakhs. Moreover, a penalty of Rs.3 lakhs was imposed upon the
appellant under Section 112(a) of the said Act.
th
9.
Being aggrieved with the order dated 24 December, 2008, the
appellant preferred an appeal to the Tribunal. The Tribunal by the
impugned order dismissed the appellant's appeal. This by holding that
there was a deliberate misdeclaration of the year of manufacture and
claiming benefit of depreciation under the Transfer of Residence Rule at
the time of importing the said car. Thus, the said car being smuggled
car, was liable for confiscation was correctly confiscated under Section
111 of the Act with an option to redeem the same on payment of fine
under Section 125 of the Act. So far as penalty is concerned, the
impugned order upheld the imposition of penalty holding that the
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appellant was the financier of the imported vehicle.
10. For the sake of convenience, we take up question nos. (1) and (3)
together for consideration and question no. (2) dealing with penalty
separately.
11. Regarding question nos. (1) and (3) :
(a) The undisputed facts are that the said car was imported by one
Mr. Dholakia in 2002, who had filed the Bill of Entry and cleared the
same. The said car was thereafter sold by Mr. Dholakia to one Mr.
Oberoi, who sold it to the appellant in 2005. The said car was seized
th
from the appellant on 13 August, 2007 and confiscated with option to
th
redeem the same on payment of the fine on 24 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.
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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. Kantharia, learned Counsel appearing
for the Revenue in support of the impugned order of the Tribunal
submits that the appellant is liable to pay the differential duty in view
of the clear mandate of Section 125(2) of the Act. This requires the
owner of the goods to not only pay the redemption fine but also the
duty and other costs payable on the offending imported said car.
(e) We have examined the rival contentions. From the facts, it is
evident that the appellant is the second buyer of the car. The importer
of the car is one Mr. Dholakia who had cleared the said car from the
customs on payment of customs duty and thereafter sold to one Mr.
Oberoi. The appellant had purchased the said car from Mr. Oberoi in
the year 2005. During the course of investigation by the DRI, the said
th
car was seized on 30 August, 2007 and confiscated in 2008 with
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option to redeem the same. It is an admitted position that since then
the said car is in possession of the 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.
th
(f) Moreover, the confiscation of the said car by the order dated 24
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 to pay the fine in lieu of confiscation but the party
is given an option to redeem the goods, if he so desirous by paying fine
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in lieu of confiscation of the offending goods. In this case, the appellant
has not exercised 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 respondent
Revenue. So also for the above reasons question no.(3) is answered in
the affirmative i.e. in favour of the appellant and against the
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respondent Revenue.
12. Regarding question no.(2) :
th
(a) The impugned order dated 28 July, 2017 of the Tribunal upheld
the order of the Commissioner of Customs imposing a penalty of Rs.3
lakhs on the appellant under Section 112(a) of the Act. The impugned
order upholds the penalty on the basis of a finding that the appellant
had financed the import of the car.
(b) The learned Counsel in support of the appeal submits that the
finding in the impugned order that as the appellant was a financier for
import of the said car is perverse. In fact, the same is clear from the
finding of the adjudicating Authority at paragraph 7.1 thereof that the
appellant had obtained loan from M/s. Kotak Mahindra Primus Ltd. on
th
25 March, 2005 so as to purchase the said car from Mr. Oberoi. Thus,
on the face of the record, it is clear that the appellant had in no manner
financed the import of the vehicle which have taken place in the year
2002.
(c) On the other hand, the learned Counsel for the Revenue submits
that the penalty imposed upon the appellant of Rs.3 lakhs under
Section 112(a) of the Act cannot be found fault with as the Tribunal
observed that he had financed the import of the said car. It is thus
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submitted that no interference with the impugned order of the Tribunal
is called for.
(d) So far as imposition of penalty of Rs.3 lakhs under Section 112(a)
of the Act is concerned, we note that it is not the case of the
Department that the appellant had done any act or omission which has
rendered the goods confiscated under Section 111 of the Act. There
is no finding in the impugned order or even allegation in the show
cause 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. In
fact, the adjudicating order of the Commissioner of Customs records the
fact that the appellant had taken a loan in 2005 to purchase the said car
for a consideration of Rs.12 lakhs. Thus, 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 under
Section 112(a) of the Act upon the appellant.
(e) Therefore, for the above reasons, question no.(2) is answered in
the negative i.e. in favour of the appellant and against the respondent
Revenue.
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13. In the above view, the substantial questions of law are answered
as under :
(a) Question (1) in the negative i.e. in favour of the appellant and
against the respondent Revenue.
(b) Question (2) in the negative i.e. in favour of the appellant and
against the respondent Revenue.
(c) Question (3) in the affirmative i.e. in favour of the appellant and
against the respondent Revenue.
14. The appeal is disposed of in the above terms. No order as to
costs.
(M.S. SANKLECHA, J.) (A. S. OKA, J.)
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CUSTOMS APPEAL NO. 67 OF 2018
Gagandeep Singh Anand
nd
R/at 3/31, 2 Floor, Shivalik
Road, ,Malviya Nagar,
New Delhi – 110 017 .. Appellant
V/s.
The Commissioner of Customs
(Import), Mumbai having its
Office at Custom House,
Ballard Estate,
Mumbai – 400 001 .. Respondent
Mr. Akhilesh Kangasia a/w Mr. Prakash Shah for the appellant
Mr. Vijay Kantharia a/w Mr. Ram Ochani for the respondent
CORAM : A.S. OKA &
M.S. SANKLECHA, J.J.
nd
RESERVED ON : 22 APRIL, 2019
th
PRONOUNCED ON : 30 APRIL, 2019
JUDGMENT : (Per M.S Sanklecha, J.)
1. This appeal under Section 130 of the Customs Act, 1962 (the Act)
th
challenges the order dated 28 July, 2017 passed by the Customs,
Excise and Service Tax Appellate Tribunal (the Tribunal).
th
2. On 14 March, 2019 we passed the following order :
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“1 Appeal is admitted on the following substantial questions of
law.
“1) Whether in the facts and circumstances of the case,
the Appellate Tribunal is correct in upholding duty
nd
demand from the Appellant (2 buyer of the car)?
2) Whether in the facts and circumstances of the case, the
Appellate Tribunal is correct in upholding penalty of
Rs.3,00,000/ on the Appellant under section 112(a) of
the Customs Act,1962?
3) Whether in the facts and circumstances of the case, the
Appellate Tribunal erred in not deleting demand of duty
nd
from the Appellant (2 buyer of the car), since the
vehicle was seized by the customs on 13.8.2007 and
confiscated by the Order of the Commissioner dated
24.12.2008, with an option to redeem on payment of
fine under Section 125 of the Customs Act,1962, which
option was never exercised, and confiscation became
final?”
2 The learned counsel for the respondent waives service.
Considering the narrow controversy involved, the appeal can be
disposed of finally. For that purpose, though the appeal is
nd
admitted, the same shall be listed on Daily Board on 2 April
2019.”
nd
3. This appeal could not reach hearing on 2 April, 2019 and stood
adjourned from time to time. Today, the appeal reached hearing and
it was taken up for final disposal on the above substantial questions of
law.
nd
4. The brief facts leading to this appeal are that on 2 September,
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2002 one Mr. Kirit Dholakia imported a Toyota Land Cruiser Prado (for
nd
short “said car”) under bill of entry No. 291047 dated 2 September,
2002. At the time of import, it appears that Mr. Dholakia had
imported the said car under the Transfer of Residence Rule 2002 and
had shown the year of manufacture as 1997 and claimed depreciation
thereon. The said car was allowed to be cleared for home
consumption by the respondent Revenue.
5. Thereafter, Mr. Dholakia, the importer sold the said car to one
Mr. Oberoi. Mr. Oberoi on purchase of the said car from Mr. Dholakia
obtained the necessary documents duly signed by the importer which
would be required for the registration of the said car in his name.
However, Mr. Oberoi did not carry out the necessary formalities to have
the registration of the said car in his name.
6. Thereafter, in March, 2005, Mr. Oberoi sold the said car to the
appellant for a consideration of Rs. 12 lakhs. An amount of Rs.10 lakhs
was paid by Demand Draft and Rs. 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
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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
th
said Act were recorded. During the course of investigation, on 13
August, 2007, the said car was seized by DRI. Thereafter, a show
th
cause notice was issued on 30 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
issued jointly and severally on the importer of the car Mr. Dholakia, the
first buyer of the car Mr. Oberoi and the second buyer of the car – the
appellant. Besides, seeking to impose penalty and confiscate the said
car under Section 111 of the Act.
8. The appellant contested the demand for duty on the ground that
he was a bona fide purchaser of the car and the demand of duty and /
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or penalty can only be imposed upon the importer. It was also
submitted that no penalty be imposed upon him as he was not involved
in illegal import of the said car nor had he abetted the import of the
said car. Nevertheless, the Commissioner of Customs – the
th
Adjudicating Authority by a common order dated 24 December, 2008
confirmed the showcause notice and demanded differential custom
duty of Rs.8.86 lakhs from the appellant. Besides confiscating the said
car with an option to redeem the same on payment of redemption fine
of Rs.8 lakhs. Moreover, a penalty of Rs.3 lakhs was imposed upon the
appellant under Section 112(a) of the said Act.
th
9.
Being aggrieved with the order dated 24 December, 2008, the
appellant preferred an appeal to the Tribunal. The Tribunal by the
impugned order dismissed the appellant's appeal. This by holding that
there was a deliberate misdeclaration of the year of manufacture and
claiming benefit of depreciation under the Transfer of Residence Rule at
the time of importing the said car. Thus, the said car being smuggled
car, was liable for confiscation was correctly confiscated under Section
111 of the Act with an option to redeem the same on payment of fine
under Section 125 of the Act. So far as penalty is concerned, the
impugned order upheld the imposition of penalty holding that the
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appellant was the financier of the imported vehicle.
10. For the sake of convenience, we take up question nos. (1) and (3)
together for consideration and question no. (2) dealing with penalty
separately.
11. Regarding question nos. (1) and (3) :
(a) The undisputed facts are that the said car was imported by one
Mr. Dholakia in 2002, who had filed the Bill of Entry and cleared the
same. The said car was thereafter sold by Mr. Dholakia to one Mr.
Oberoi, who sold it to the appellant in 2005. The said car was seized
th
from the appellant on 13 August, 2007 and confiscated with option to
th
redeem the same on payment of the fine on 24 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.
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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. Kantharia, learned Counsel appearing
for the Revenue in support of the impugned order of the Tribunal
submits that the appellant is liable to pay the differential duty in view
of the clear mandate of Section 125(2) of the Act. This requires the
owner of the goods to not only pay the redemption fine but also the
duty and other costs payable on the offending imported said car.
(e) We have examined the rival contentions. From the facts, it is
evident that the appellant is the second buyer of the car. The importer
of the car is one Mr. Dholakia who had cleared the said car from the
customs on payment of customs duty and thereafter sold to one Mr.
Oberoi. The appellant had purchased the said car from Mr. Oberoi in
the year 2005. During the course of investigation by the DRI, the said
th
car was seized on 30 August, 2007 and confiscated in 2008 with
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option to redeem the same. It is an admitted position that since then
the said car is in possession of the 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.
th
(f) Moreover, the confiscation of the said car by the order dated 24
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 to pay the fine in lieu of confiscation but the party
is given an option to redeem the goods, if he so desirous by paying fine
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in lieu of confiscation of the offending goods. In this case, the appellant
has not exercised 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 respondent
Revenue. So also for the above reasons question no.(3) is answered in
the affirmative i.e. in favour of the appellant and against the
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respondent Revenue.
12. Regarding question no.(2) :
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(a) The impugned order dated 28 July, 2017 of the Tribunal upheld
the order of the Commissioner of Customs imposing a penalty of Rs.3
lakhs on the appellant under Section 112(a) of the Act. The impugned
order upholds the penalty on the basis of a finding that the appellant
had financed the import of the car.
(b) The learned Counsel in support of the appeal submits that the
finding in the impugned order that as the appellant was a financier for
import of the said car is perverse. In fact, the same is clear from the
finding of the adjudicating Authority at paragraph 7.1 thereof that the
appellant had obtained loan from M/s. Kotak Mahindra Primus Ltd. on
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25 March, 2005 so as to purchase the said car from Mr. Oberoi. Thus,
on the face of the record, it is clear that the appellant had in no manner
financed the import of the vehicle which have taken place in the year
2002.
(c) On the other hand, the learned Counsel for the Revenue submits
that the penalty imposed upon the appellant of Rs.3 lakhs under
Section 112(a) of the Act cannot be found fault with as the Tribunal
observed that he had financed the import of the said car. It is thus
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submitted that no interference with the impugned order of the Tribunal
is called for.
(d) So far as imposition of penalty of Rs.3 lakhs under Section 112(a)
of the Act is concerned, we note that it is not the case of the
Department that the appellant had done any act or omission which has
rendered the goods confiscated under Section 111 of the Act. There
is no finding in the impugned order or even allegation in the show
cause 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. In
fact, the adjudicating order of the Commissioner of Customs records the
fact that the appellant had taken a loan in 2005 to purchase the said car
for a consideration of Rs.12 lakhs. Thus, 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 under
Section 112(a) of the Act upon the appellant.
(e) Therefore, for the above reasons, question no.(2) is answered in
the negative i.e. in favour of the appellant and against the respondent
Revenue.
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13. In the above view, the substantial questions of law are answered
as under :
(a) Question (1) in the negative i.e. in favour of the appellant and
against the respondent Revenue.
(b) Question (2) in the negative i.e. in favour of the appellant and
against the respondent Revenue.
(c) Question (3) in the affirmative i.e. in favour of the appellant and
against the respondent Revenue.
14. The appeal is disposed of in the above terms. No order as to
costs.
(M.S. SANKLECHA, J.) (A. S. OKA, J.)
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