Judgment:
1. This appeal is directed against the order of Collector of Customs, Madras, dated 27.8.1992 absolutely confiscating the imported car, namely Honda Accord Model 1990 under Bill of Entry No. 4092 dated 6.2.1992 on grounds of mis-declaration of value and description Under Section 111(d) & 111(m) of the Customs Act, 1962, the 'Act' for short, besides a penalty of Rs. 2.25 lakhs Under Section 112(a) of the Act, has been levied on the appellant.
2. The appellant herein imported Honda Accord car aforesaid and sought clearance of the same under OGL in terms of ITC public notice 197/91 dated 16.8.1991. As per the above Public Notice, import of cars with engine sizes above 1400 cc is permissible subject to the condition that the vehicle should have been in the use of the importer abroad for at least a period of one year prior to the importer's return to India. In the present case, the invoice of the supplier M/s Trading Enterprises, Dubai, UAE, is dated 15.4.1990 drawn in the name of the appellant and on enquiry being made by the Department with the M/s Honda Motor Co. in Japan for ascertaining the year of manufacture of the car, it was ascertained from the manufacturers that the car in question was manufactured on 5.6.1991 and exported to UAE on 5.7.1991. It was further ascertained that the car was sold to M/s . Trading Enterprises.
Dubai, by Arabian Clearing and Forwarding, Dubai. Proceedings after due investigation were instituted against the appellant on the grounds that the car imported in the above circumstances was not permissible under OGL and require a valid licence/CCP and the proceedings resulted in the present impugned order.
3. Shri Mohan Parasaran, the learned Counsel for the appellant submitted that the appellant was a resident of Dubai from 9.3.1989 to 15.7.1991 and purchased the car in question under original invoice dated 15.4.1990 filed along with the bill of entry dt. 12.1.1992. The Department took a view that the year of manufacture of the car is not 1990 but June 1991 and this view was taken on the basis of a fax message received from the manufacturers, namely M/s. Honda Car Co. of Japan to the effect that the car was manufactured in June 1991 and exported from Japan to Dubai. The learned Counsel contended that the Department cannot place reliance on the fax message obtained at the back of the appellant without affording the appellant an opportunity to challenge the same. It was further urged that the learned adjudicating authority has not properly considered and taken note of other statutory documents such as the registration certificate, original invoice as well as the vehicle export certificate, etc., which would establish the year of manufacture of the car as 1990. No proper reason has been given in the impugned order for not accepting the above statutory documents.
The learned Counsel further submitted that the Department consistently in any event has been permitting release of the ears imported without the necessary licence or CCP by permitting redemption of the same and even after the impugned order, the Department permitted clearance of similar goods on payment of fine and placed reliance on the order passed by the Collector of Customs, Cochin, dated 1.1.8.1994 permitting release of Honda Accord Car of 1991 model. Reliance was also placed on the ratio of ruling of this Bench in the case of Col. of Customs v. Mr.
Nanik G. Rohera reported in 1986 (6) ECR 13 (CEGAT Madras). Reliance on another order of Col. of Customs dated 18.7.1994 releasing imported car in similar circumstances was also placed.
4. The learned DR contended that the appellant had not let in any evidence indicating any negotiation or dealing between the appellant and M/s. Trading Enterprises, Dubai. The vehicle in question was not directly sold to the appellant by M/s. Trading Enterprises The ear in question was manufactured only on 5.6.1991 and exported subsequently on 5.7.1991 as per the telex message of the manufacturers. Therefore, the plea of the appellant that money was paid against the car on 15.4.1990 cannot be accepted. The learned DR submitted that the question of paying or paying for a car even after its manufacture is hardly acceptable. The learned DR further submitted that even in the cash receipt dated 15.4.1990 issued by M/s. Arabian Clearing & Forwarding, Dubai, particulars such is year of manufacture of the car, type, chassis No. engine No. etc. are conspicuous by their absence. The learned DR in other respects adopted the reasoning in the impugned order and urged that this case would stand on a different tooting from the other cases because of the deliberate manipulation of relevant records regarding the year of manufacture, use of the car, etc. The learned DR placed reliance on the ruling of the North Regional Bench in case of Sh. Bal Krishan v. Col. of Customs, New Delhi .
5. We have carefully considered the submissions made before us. During the course of the arguments in the above appeal Shri Parasaran, the learned Counsel at one stage submitted that be would not be pressing the issue in regard to confiscability of the vehicle in question and addressed arguments on the order of absolute confiscation of the vehicle under the Act which according to the learned Counsel is not correct in the facts and circumstances of the case nor consistent with the view the Department is taking in respect of cars imported in similar circumstances. As a matter of fact, the learned Counsel took adjournments to produce various orders passed by the Department in the Collectorate of Madras & Cochin to prove his plea that absolute confiscation is not sustainable in the light of the view taken by the Department in similar circumstances of imports of car under the Act.
The appeal was adjourned at the instance of the learned Counsel for the appellant and alter the learned Counsel for appellant produced certain orders of the Department permitting release of the car imported on payment of fine, the learned DR was granted time to verify the same and take instructions.
6. Today, Shri Satish, the learned Counsel for the appellant has submitted that the impugned order absolutely confiscating the car in question is not sustanable in law or on facts nor consistent with the policy or practice adopted by the Department in similar circumstances and fervently prayed for modification of the order of absolute confiscation and for permitting redemption thereof on payment of a suitable fine under the Act, 7. In view of the plea of the learned Counsel for the appellant seeking only modification of the order of absolute confiscation, we do not feel called upon to address ourselves to the question as to whether the car was imported in contravention of law or not. In other words, the confiscability of the car in question is accepted and not challenged by the appellant but would only assail the absolute confiscation of the vehicle in the facts and circumstances of the case. On going through the records, we find that the appellant while filing the bill of entry filed original invoice No. 11873 elated 15.4.1990 issued by M/s.
Trading Enterprises, Dubai, vehicle export certificate dated 22.10.1991 issued by the Traffic Deptt. of the country, original registration book with translated copy and also copy of the bill of lading dated 7.11.1991 on Blue Shipping Company, Dubai, etc. We note that Government documents such as registration certificate issued by the Govt. of UAE, export certificate, insurance policy, etc., would prima facie indicate that the car was purchased in 1990 whereas the fax message of the manufacturer would show that the car was manufactured only in 1991. In the present case, certain public documents of the Government which do not tally with the document of the M/s. Honda Motor Co. and it is for the appellant to lead evidence to show the use of possession of the vehicle as per law. Taking into consideration the status of the appellant, the period of appellants stay abroad and other factors, it would be seen that if only the appellant had chosen to apply for a customs clearance permit, the authorities would have considered the case of the appellant for the grant of the same. Keeping all these factors in mind, we are of the view that absolute confiscation of the vehicle which is in the custody of the Department since the date of the import for all these years would appear harsh and unjust. We take into consideration the fact that the Department in the order of the learned Collector (Appeals), Cochin, dated 11.8.1994, the learned Collector (Appeals) in similar circumstances has taken the following view: A telex message from the Dubai Port authority intimated that the car was imported to Dubai on 23.7.1993. On the basis of this message from Dubai Port authority, the original authority concluded that other documents produced by the appellants are not genuine and that the car was of 1993 make. I am afraid that both the conclusions of the original authority are based on very thin evidence. The message from Dubai only indicated that the car was brought to the country on 23.7.1993. As rightly contended by the appellant the message did not indicate as to from where the car was imported. According to the appellant the car was imported from one of the local ports. In any case merely because the car was brought to Dubai on 23.7.1993 it cannot be concluded that the car was brought from Japan and it is of 1993 model. I therefore, agree with the appellant that the message from the Dubai port alone cannot be the basis for concluding that the car was 1993 model and that the documents produced to show that registration in 1991 are not genuine.
If the original authority wanted to reject these documents he should have referred these documents to authorities who issued them through the Indian Consulate if necessary. Since the original authority has not done so, I do not find any basis to reject them especially when the message from the port of Dubai throws very little light on the details of the car. In view of this I hold that the documents produced by the appellants and issued by the concerned Govt.
authorities are the genuine documents and they cannot be rejected.
Accordingly, I hold that on the basis of these documents the car is of 1991 make and it was imported into UAE in 1991 and subsequently registered in UAE in 1991.
8. The Bench in its ruling in the case of Col. of Customs, Madras v.Mr. Nanik G. Rohera reported in 1986 (6) ECR 13 has held as under: It is common ground that importation of a car requires a licence or a Customs Clearance Permit issued by Chief Controller of Imports and Exports or by one of his officers. It is also clear from Chapter 15 of the relevant ITC Policy Book April-March 1984-85 that in the normal course a Customs Clearance Permit may not have been issued in the circumstances of the present case. Be that as it may, in the instant case as the import of the car is neither covered by any valid import licence of a Customs Clearance Permit, confiscation of the same is clearly maintainable on facts and in law. We agree with the submission of the learned Counsel for the respondent that closeness or otherwise of the relationship between the donor and the donee would not make any difference to the issue to be decided in this case. In fact, we would concede that whether the car is a gift or not is also not relevant in considering its confiscabilty under the Act, since admittedly the same is not covered by the provisions of the import and Export Control Act and regulations thereunder.
(1) whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force and shall, in the case of any other goods, give to the owner of the goods an option to pay in lieu of confiscation of such fine as the officer thinks fit.
Therefore, imposition of a fine in lieu of confiscation is permissible in terms of Section 125 of the Customs Act. Hence, the question that falls for consideration is whether in the facts and circumstances of this case, the quantum of redemption fine imposed by the lower appellate authority is just and proper. In our opinion, the plea of the learned SDR that the margin of profit on the car concerned in the case would be of the order of 380% is acceptable, taking into consideration the price at which it is capable of being sold and a fine in lieu of confiscation is ordinarily imposed with a view to wiping out any monetary gain that may ensure to a party by an act of unauthorised importation." 9. The Addl. Collector of Customs, Cochin by order dated 27.4.1994 while confiscating the car imported by the party in that case, permitted redemption of the same on payment of fine besides penalty and on appeal the learned Collector of Customs, Cochin, by order dated 18.7.1994 set aside the same and released the car absolutely. The case relied upon by the learned DR refers to import of a car under Carnet-de-passage and after the said car was discharged the car in question was not actually re-exported and was kept in India and the question was as to whether the person who had purchased the same, the appellant in that case, had actually purchased the same buna fide so as not to warrant absolute confiscation. As per evidence on record, the authority found that the purchase was not effected and no verification of the identity of the seller was made and transaction was on the basis of duplicate registration book and the car was confiscable absolutely in those circumstances. Those circumstances are distinguishable from the facts of the present case. Therefore, on consideration of the entire evidence on record while upholding the confiscability of the car in question under the provisions of the Customs Act as alleged in the show cause notice, consistent with the practice of the Department in permitting redemption of the same we are of the view that the order of absolute confiscation would call for modification in the present case also. In this view of the matter, we modify the order of absolute confiscation by permitting redemption of the same on payment of fine of 50 % of its assessable value. Taking note of the assessable value of Rs. 4,36,694, we reduce the penalty to Rs. 1.00 lakh (Rupees one lakh).
Except for the above modifications, the appeal is otherwise dismissed.
10. I have given a careful thought to the order recorded by the learned Vice-President and I am not able to agree with him that in the facts of this case, the car which has been absolutely confiscated should be allowed to be redeemed on payment of 50% of the assessable value. The appellant had sought clearance of the Honda Accord car under OGL holding out the year of the manufacture of the car as 1990 under the cover of invoice dated 15.4.1990 and that the vehicle had been in the use of the appellant atleast for one year prior to her return to India as required in terms of the OGL for the purpose of import of the car.
The Departmental authorities had intelligence that the importer had imported the said car and it is likely that the appellant would misdeclare the year of manufacture apart from misdeclaring the value.
After the BE had been filed the officers undertook a probe and made enquiries both with the manufacturers of the car and also the manufacturers agent in Dubai to ascertain the year of manufacture of the car in question and also regarding sale of the car to the appellant. The position as emerged on enquiries was rather revealing.
It was informed by M/s Honda, the manufacturing Co., of Japan that the car was manufactured on 5.6.1991 and exported to UAE on 5.7.1991. The agent in Dubai who imported the car was also contacted and he stated that the car was sold by them (M/s Trading Enterprises, Dubai) to Arabian Clearing and Forwarding Company, Dubai. The appellant had claimed to have purchased the car from the latter and it was their invoice which was filed with the Bill of Entry for clearance of the car before the Customs authorities.
11. The learned Counsel for the appellant first took the plea that information gathered from Honda Company, Japan could not be relied upon in the face of the documents produced by the appellant viz. the invoice of M/s Arabian Clearing and Forwarding Company, Dubai, dated 15.4.1990 and also regarding the registration of the car with the Dubai authorities. The appellant's Advocate was shown the correspondence that was exchanged with M/s Honda Motor Company Ltd., Japan wherein apart from the telex received from the Honda Company, a communication dated 17.3.1992 signed by the person dealing with automobile operations for Latin America, Middle East, Africa & South West Asia Division which clearly stated the year of production of the Car as 5 June, 1991 and Export date as 5 July, 1991 and the chassis No. and the Engine No. was also shown. The learned Advocate at this stage changed his plea from release of the car under OGL to release on payment of appropriate redemption fine and withdrew his challenge to the confiscation of the car in question. In this connection the only plea that survives for consideration is whether in this background and the facts and circumstances of this case, the car should be allowed to be redeemed on payment of a redemption fine. I observe that import of car can be effected only under a licence issued by the licensing authority and the only exception is for those who have stayed abroad over a period of one year and had been .having the car in their use and possession for one year prior to return to India. They can be allowed to import a car without licence. The said facility is also contingent upon the importer being entitled to the TR concessions. The above facility has been given to such categories of people who owned a car and were using it sufficiently long time to enable them to continue to have the facility of the use of their car on their return to India for settling here. In the present case, import has been sought to be made by taking advantage of the facility given to the genuine persons who return to India after their long stay abroad, by manipulation of documents in regard to possession of the car and going to the extent of misdeclaring the year of production for getting a brand new car. There is nothing on record nor is there any averment that the appellant in the normal course would have been issued a licence for import of the car in question taking into consideration the facts and circumstances of the appellant's return to India taking into consideration the scheme of issue of import licence for the car. The question therefore that has to be answered is whether in a case where there is flagrant violation of the licensing condition and resort is had to subterfuge of misdeclaration of the goods and manipulation of documents in record to the year of manufacture of the car and period of possession the appellant should be allowed the benefit of release of the car on payment of a redemption fine. I observe that but for the alertness of the Customs, the appellant would have got away with the release of the car based on the manipulated documents produced. It is significant to note that the appellant's Power of Attorney holder who appeared in response to the summons issued under Section 108 of the Customs Act, 1962 on 16.4.1992 has stated as under: I was told that she made payment for purchase of vehicle in 1990 and she was given the keys and papers of the vehicle before she left for Bombay.
Before my departure from Dubai I was shown my vehicle which was in Arabian Clearing's warehouse in Dubai parked along with around ten cars. Since my car was full dust I was told that full service of the car will be done before despatching the car to India and one set of key was given to me before my departure.
It is clear from the above that the appellant came to know about the car which was sent in her name only just before her departure and one set of key of the car was given to her only at that time. The car is one of the premier popular brands and commands a high margin of profit and it will be sending a wrong message to those who are resorting to dubious means to get an item like this which commands a high margin of profit, if the same is allowed to be redeemed on payment of fine. The department has cited a case where a car had been imported on Carnet-de-passage facility available to tourist who visit India where car had been left in India and later sold based on some of the manipulated documents even though the purchase was bona fide one in that case where the absolute confiscation has been upheld by the ruling rendered by the special Bench. The case cited is Balakrishnan v. CC, New Delhi . The ratio of the ruling of the case cited by the appellant is not applicable to the facts of this case as in those cases facts did not show that import was attempted to be made against manipulated and forged documents. I, therefore, uphold the order of absolute confiscation of the car by the lower authority. I however, hold that interests of justice would be served if the penalty levied is reduced to Rs. 1,00,000 (Rs. one lakh).
Whether the facts and circumstances of the case, the car should be allowed to be released on payment of fine of 50% of the assessable value for the reasons given by Hon'ble Vice-President.
In the facts and circumstances of the case, inasmuch as the importer had tried to get the car released by filing forged documents, absolute confiscation of the car should be upheld for the reasons recorded by Member (T).
Sd/- Sd/ (S. Kalyanam) (V.P. Gulati) Vice-President Dt. 31.1.1995 Member(T) 12. The difference of opinion between the Members who had heard this appeal earlier was heard by me when S/Shri Mohan Parasaran and Mohan Ranganathan, learned Advocates appeared for the appellant and Shri Victor Thyagaraj, learned Senior Departmental Representative for the respondent Collector. Shri Mohan Parasaran after referring briefly to the facts of the case as have been brought out in the orders of the two Members stated that the Vehicle Export Certificate issued by the Traffic Department of the country of Export showed the Model of the car as 1990. The allegation against the appellant was that the year of manufacture was misdeclared as 1990 and value was also misdeclared. The documents produced were fabricated. The allegation is denied. The department has relied only upon the Fax message of the Japanese manufacturer of the car, Honda Motor Company Limited. The learned Counsel submitted that public documents should be preferred to a Fax message from a private company. There should not be total reliance on the Fax message. There was no other evidence to justify the harsh decision taken. He cited Tribunal decision of Gulam Mohmed Rasid Khan Pathan v. Collector of Customs & Central Excise where following the Supreme Court decision in Nargovindas K. Joshi v. Collector of Customs [(1987) 2 SCC 23D] option to redeem the confiscated goods was given on payment of fine in lieu of confiscation. The learned Counsel pleaded that the order of Hon'ble Vice-President may be concurred with.
13. Opposing the arguments, Shri Victor Thyagaraj, learned Senior Departmental Representative submitted that the manufacturer of the car had clearly certified the production date and export date of the said car as 5.6.1991. The Chassis Number and Engine Number of the car had been specifically referred to. Hence the claim that it was a 1990 model and had been registered in that year are false claims sought to be supported by fabricated documents. The car is a brand new one of the latest Model and commands a high margin of profit of nearly 380%.
Absolute confiscation is fully justified, submitted the learned Senior Departmental Representative who pleaded that the order of the Technical Member be concurred with.
14. The learned Counsel for the appellant gave a rejoinder to the contentions raised by the learned SDR stating that the Fax communication is the only evidence for department's case against the appellant. The original Fax message has not been produced nor has any affidavit been filed. The authenticity of the said evidence is, therefore, doubtful, he concluded.
15. I have considered the submissions. The role of the third member to whom a difference of opinion between the Members who had heard the appeal originally has been referred is subject to the provisions of Section 129C(5) of Customs Act, 1962. The third Member is not to hear the appeal itself and decide the matter afresh. The members who originally heard the appeal have to state the point or points on which they differ and such points shall be referred by the President for hearing by one or more Members of the Tribunal and such point or points shall be decided according to the opinion of the majority of the Members who have heard the case including those who first heard it.
Thus the third Member has to hear only the points of difference.
16. In two Income Tax cases, the view was taken that the third Member to whom a difference of opinion among Members is referred is bound to agree with one or the other of the differing Members and is not entitled to take a third view (Hanutram Chandanmull v. Commissioner of Income Tax-). In Jan Mohammed v. CIT , it was held that the third Member cannot formulate a new point and base his decision thereon. The Income Tax provisions in this regard are similar to Section 129C(5). In respect of proceedings under Civil Procedure Code also the same view was taken about the role of the third Judge hearing a difference of opinion matter. In , it was held that the third Judge is entitled to decide only the points on which there was difference of opinion and not the whole case. In it was held that it is only that point on which there had been a difference of opinion between the Judges of a Division Bench which can be heard by the third Judge hearing the case under Clause 28 of the letters Patent (of the Patna High Court) and that a point which had not been urged before the Division Bench and on which there has been no difference of opinion between the judges of the Division Bench cannot be heard by the third Judge inasmuch as in that case the decision cannot be according to the opinion of the majority of the Judges including those who first heard it. The provisions are similar to Section 129C(5) of Customs Act. In view of this, the question can be decided by me only on the point of difference referred to me. The difference is only on the point whether the car should be confiscated outright or it should be released on payment of fine in lieu of confiscation of 50% of the assessable value of Rs. 4,36,694/-. Before the Bench the plea on behalf of the appellants was only for modification of the order confiscating the car absolutely. The Bench did not feel called upon to address itself to the question as to whether the car was imported in contravention of law or not. The order of Vice-President goes on to observe that the confiscability of the car in question was accepted and not challenged by the appellant and it was only the absolute confiscation of the vehicle that was assailed. While the Vice-President accepted the plea, the Technical Member rejected the plea. Both were agreed on the confiscability of the car due to its import being irregular, the documents produced by the appellant held to be not covering the same.
In the circumstances, the question of acceptance of such documents and rejection of the evidence of the Fax message relied upon by the Collector and accepted by both the Members as valid evidence regarding the Model and date of production of the car rejecting the appellant's claim that the car had been in use abroad by her for more than a year is not amenable to consideration by me. The choice is only between the two orders passed by the Members who had heard the appeal to decide on the points of difference referred to the third Member.
17. Having thus narrowed down the field of decision, I find that the Vice-President has observed that taking into consideration the slatuts of the appellant, the period of stay abroad and other factors if only she had chosen to apply for a customs clearance permit, the authorities would have considered grant of the same. On this reasoning, the absolute confiscation of the car was felt to be harsh and unjust. A few decisions where absolute confiscation was not resorted to and the vehicles were even released without fine have been referred by him. But these are cases where the documents to support the claim of its possession and use abroad for more than a year did not stand disproved by evidence to the contrary that the vehicles had been manufactured much later as is the case here. There is no indication about the status of the appellant in the record. The stay abroad of the appellant is about 2 years and 4 months. The consideration that had she applied for a customs clearance permit for a new vehicle which had not been used by her abroad for more than a year she would have got it is in the realm of speculation. On the contrary, the evidence obtained by the department from the manufacturer of the vehicle regarding its date of production and export from Japan to UAE showing the Engine Number and Chassis Number clearly supports the department's stand. The arguments advanced by the Technical Member for ordering absolute confiscation are weighty and realistic. Hence the rejection of the request for release of the vehicle on payment of fine in lieu of confiscation in addition to duty is in order. Section 125 of Customs Act provides that where goods confiscated are prohibited for import under the Customs Act or any other law, the officer adjudging confiscation may give the owner of the goods an option to pay in lieu of confiscation fine as thought fit.
Such exercise of option is mandatory for goods not so prohibited.
Prohibited goods includes restricted goods. Relevant extract from the Supreme Court judgment in Sheikh Mohd. Omer v. Collector of Customs, Calcutta reported in ECR C 759 (SC) : 1983 ELT 1439 is reproduced below: It was urged on behalf of the appellant that expression "prohibition" in Section 111(d) must be considered as a total prohibition and that expression does not bring within its fold the restrictions imposed by Clause 3 of the Imports Control Order, 1955.
According to the learned Counsel lor the appellant Clause 3 of that order deals with the restrictions of import of certain goods. Such a restriction cannot be considered as a prohibition under See. 111(d) of the Act. While elaborating his argument the learned Counsel invited our attention to the fact that while Section 111(d) of the Act uses the word "prohibition", Section 3 of the Imports and Exports (Control) Act, 1947 takes in not merely prohibition of imports and exports, it also includes "restrictions or otherwise controlling" all imports and exports. According to him restrictions cannot be considered as prohibition more particularly under the Imports and Exports Control Act, 1947 as that statute deals with "restrictions or otherwise controlling" separately from prohibitions. We arc not impressed with this argument. What Clause (d) of Section 111 says is that any goods which are imported or attempted to be imported contrary to "any prohibition imposed by any law for the time being in force in this country" is liable to be confiscated. "Any prohibition" referred to in that section applies to every type of "prohibition". That prohibition may be complete or partial. The expression "any prohibition" in Section 111(d) of the Customs Act, 1962 includes restrictions. Merely because Section 3 of the Imports and Exports (Control) Act, 1947 uses three different expressions "prohibiting", "restricting" or "otherwise controlling," we cannot cut down the amplitude of the word "any prohibition" in Section 111(d) of the Act. 'Any prohibition' means every prohibition.
For the foregoing reasons, I agree with the order proposed by the Technical Member.
18. The papers may be placed before the regular Bench for disposal of the mailer in accordance with the majority view.
In view of the majority decision, the absolute confiscation of the car is upheld.