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Customs, Excise and Gold Tribunal - Tamil Nadu

Shri M. Irshad Ali, Shri K.T. Kuppaiah, ... vs Commissioner Of Customs, Chennai on 10 July, 2001

Equivalent citations: 2002(80)ECC363, 2001(137)ELT1041(TRI-CHENNAI)

ORDER

Shri S.L. Peeran

1. All these set of appeals raises a common question of law and facts. They all pertain to confiscation, imposition of penalty & fine for violation of import of cars in terms of Import Export Policy and the various provisions of Customs Act, 1962.

2. In respect or Appeal C/114/99, C/116/99. C/925/97 & C/926/97, pertains to same individual viz. M.Irshad Ali. However, the order in respect of these appellants arises from Order-in-Original No.38/98 (Appg.) dated 5.12.98 passed by the Commissioner of Customs. Chennai imposing penalty of Rs.2 lakhs under Section 112(a) of the Customs Act on the appellants and on others persons whose appeals are not listed today on the allegation that the appellant was involved importation of new Mercedez Benz S320 care cleared at ACC, Chennai Airport under Bill of Entry No.27089 dt. 7.5.96 (IGM No. 2248/96) dt 2.2.93 by Shri Khaja Mohideen, holder of Indian Passport issued at Muscat, under the transfer of Residence Rules by manipulating the customs clearance documents.

3. We are not concerned in this appeal pertaining to confiscation of the subject imported car and imposition of fine and penalty of Shri Khaja Mohideen and M.Krishnan, but only on appeal pertaining to imposition of penalty on M. Irshad Ali. The allegation against appellant Shri Irshad Ali is that he is a paid Director of a real estate, viz. M/s. Ferdous Estates (P) Ltd., Santhome High Road, Mylapore. During the course of investigation, Shri K.Sundaramurthy, Chief Manager, Indian Bank, Alwarpet Branch in his statement dated 10.7.96 had stated that Irshad Ali was one of their valued customers. It was further found, during the investigation and search at his premises, certain documents which were incriminating in nature, including tow number plates having Arabic inscriptions which were recovered and seized and his statement was recorded on 7.8.96. In his statement, he admitted that he knew Shri Krishnasamy, Ismail and Ibrahim at Dubai; that he used to advance money to persons on the instructions of the aforesaid three persons; that during the past Shri Krishnan had imported six cars, that out of the said fix cars, five was given to M/s. Car Trade, Madras for sale; that after selling the cars, Shri B. Venkatachalam, partner of M/s. Car Trade paid back cash and cheques to him and to Shir Krishnan. He had stated that with regard to clearances of the subject car, Shri Khaja Mohideen had come for clearance alongwith M.Krishnan, who are a car broker and he had taken M.Krishnan to one Shri C. Chbidambaram of M/s. Cars Trade, Chennai and that they handed over the vehicle to him for sale. Shri B.Venkatachalam partner of M/s. Car Trade, Chennai in his statement dated 7.8.96 stated that the said imported vehicle was left in his residence by Irshad Ali and Krishnan, when he was out of station; that from the documents left, he came to know that the said vehicle was imported by one Shri Khaja Mohideen; that the said vehicle was left at the residence by Shri Ali's friend at Valasarawakkam in the middle of June, 1996 on instruction received from Shri Irshad Ali and Shri Krishnan; that both of them alongwith one Shri Issac had come along, when the car was taken to Valasarawakkam; that he had handed over the papers to Shri M.Krishnan; that he was not aware of further details of the car. Shri P. Jayachandran, in his statement dated 7.8.96, stated that he knew Shri Issac and through him he came to know one Shri Irshad Ali as he was in read estate business; that Shri Irshad Ali had contacted over phone and requested him to give permission to keep an imported car at his house at Valasarawakkam, at it was not safe to keep the vehicle at his residence at Santhome High Road. The order-in-original in para-22 summarises at allegation and in so far as this appeal is concerned, it is alleged that is para 22 (j) that Shri M.Krishnan of Dubai purchased the subject vehicle from M/s. Cars Trade, Dubai and arranged for the import and clearance of the vehicle into India in the name of Shri Khaja Mohideen in association with Shri Irshad Ali on the Strength of fabricated forged documents in contravention of Public Notice No. 202/ITC (PN)/92-97 dated 30.3.94 issued under the Exim Policy 1992-97 and also in violation of the provisions of Customs Act, 1962. Appellants, was therefore called upon to show cause as to why he should not be proceeded against under Section 112(a) of the Customs Act for imposition of penalty for lending his services to M.Krishnan.

4. The Paragraph 29 of the Order-in-Original records his reply by which he has denied any of his role in the import of the car, and stated that penalty cannot be imposed against him as it is a quasi criminal proceedings and hence clinching evidence of contravention of the provision of the Customs Act, 1962 is required and proved against him. Though he admitted that he introduced Khaja Mohideen to open an account in Indian Bank but he stated that there was nothing wrong in the same as he was known to him. He had stated that he had no malafide intention in obliging his friend M.Krishnan of Dubai who has introduced Mr.Khaja Mohideen. He has also accepted that the Mercedez S320 was cleared by Shri Krishnan when he was at Chennai and he met Mr. Krishnan and Mr. Khaja Mohideen only after clearance of the car. He admitted that he and Mr. Krishnan took the car to the car broker M/s. Car Trade and handed over the vehicle to them and that on request of Mr. Krishnan, they kept the car in the house belonging to Mr. Jayachandran at Valasarawakkam. He contended that these acts would not make him guilty of contravention of any of the provisions of the Customs act, warranting imposition of penalty on him under Sec.112 of the Customs Act, 1962. He argued that there was no evidence to prove that he was in any way connected with the purchase, import, customs clearance and sale of the subject car and therefore the allegation brought against him was not sustainable.

5. The impugned order of the Commissioner has dealt with in detail with regard to allegation on the main person and the Commissioner has merely referred to the charge in the show cause notice about Irshad Ali's having been contacted by Krishnan and having helped Khaja Mohideen to open the account and introducing them to car broker and to keep the car in the safe custody. The Commissioner on the basis of these facts ,held that it clearly goes to prove the fact that both Mr. Krishnan and Shri Irshad Ali had been engaging in import and sale of the car. From his statement dated 7/8/96 of Shri P.Jayachandran, the Commissioner holds that Irshad Ali moved the car from his place and hid it in a place at Valasarawakkam on learning that officers were trying to locate the vehicle. He has noted that if a persons is innocent, there was no need for him to make any effort to hide the car, more so when he believed that the car was duly cleared though customs. Therefore, he held the same liable to be confiscated.

6. In Appeal C/116/99, appellant Shri Irshad Ali has been imposed with a penalty of Rs.11 lakh under Section 112(a) of the Customs Act alongwith M.Krishnan of Dubai and Kuppusamy. The car was imported by M/s. South Indian Corporation (Agencies) Ltd., who paid the fine and the differential duty. Their appeals are not listed except the above appeal in respect of order-in-original No. 37/98 dt. 26.11.98. In this case also the material facts and allegations are identical to the one recorded in the above order. The role played by the appellant and the charge made against him is identical that the car had been sold by M/s. Cars Trade, Dubai to Kuppusamy on 17.12.94 M/s. Cars Trade, Dubai have, vide their letter dated 25.9.96 intimated that the subject vehicle had been sold to Shri M.Krishnan of Dubai on 11.4.96. Therefore, it was concurred that the said vehicle could not have been purchased by Mr. Kuppuswamy, the importer. As against the appellant Irshad Ali, the same statement of Venkatachalam, is relied in which it is stated that he had handed over the cheques and cash received from the above parties of Shir Irshad Ali. The statement of Shri K. Sundaramoorthhy, Chief Manager, Indian Bank, Alwarpet Branch, Chennai was also relied with regard to bank transaction and the importer being attended to by Irshad Ali. Appellant Irshad Ali had in his reply dated 26.1.98 denied the allegations by submitting that the only charge against him in the SCN is that Krishnan arranged to clear and dispose of the car with his help. He denied that he has either done nor abetted to do any act which has rendered the car liable to confiscation under provision of Section 111 of the Customs Ac. He submits that there is no evidence admitted or other wise to prove that he has done or abetted any act of commission or omission which would render the goods liable for confiscation although he admitted that M.Krishnan is known to him and Krishana was helping different persons who were importing cars from abroad. He admitted that Krishnan came to India and used to stay with in at Madras; since Krishnan was new to Madras, he sued to take his assistance in several matters which included ticketing, hotel, transport, introduction to Indian Bank, Alwarpet Branch, depositing cheques etc. all help he rendered in the interest of a friend without any remuneration. He has stated that none of the above facts would render the subject car liable for confiscation warranting imposition of penalty on him, as he has not done any act in furtherance of any violation alleged in the SCN. The Commissioner in para-32 has given his findings on the allegations brought out against Irshad Ali. He has noted that since he had contacted Krishnan and Krishnan was helping others in import of the cars, therefore in terms of this statement, it is proved that he was also involved in the matter which warranted imposition of penalty.

7. Appeal C/925/97 arises from Order-in-Original No. 77/97 dated 24.7.97 passed by Commissioner of Customs (Sea) Chennai. On the identical allegations, Shri Irshad Ali has been imposed with penalty of Rs. 1 lac along with M.Krishnan besides confiscation of imported car and the car was ordered to be released on payment of fine of Rs.1 lac. We are only concerned with the allegation against Irshad Ali and the penalty imposed on him. The Commissioner has given his findings on identical facts in para -26 in as much as that he was dealing in selling of cars as a business and taking assistance from M. Krishnan. Although both of them were engaged themselves in sourcing foreign cars by unlawful means, he has noted that in the instant case, no one has clearly spelt out as to how Shri Singaram Jawahar came to possess the impugned car which by all means is a luxurious car costing quite a lot of money and how the customs duty was paid in freely convertible foreign currency. He has noted that in the absence of clear cut findings to prove the two payments, it has to be believed that M.Irshad Ali and M.Krishnan have made good these payments through unauthorised channels and also manipulated the records relating to the car, namely, year of manufacture and registration. Therefore, he held that the charge against Irshad Ali is proved.

8. Appeal C/926/97 arises from Order-in-Original NO. 104/97 dated 21.7.97 passed by the Commissioner of Customs, Madras in which the appellant Shri Irshad Ali has been imposed penalty of Rs.1 lac alongwith one Shri Abdul Rahman Siddique, whose appeal is not listed nor the importer M/s. South Indian Corporation Ltd., who have cleared the car on payment of redemption fine of Rs.2 lakh has been listed. The findings on Shri Irshad Ali is identical to the one given in C/925/97 by the same Commissioner .The importer was one Abdul Rahiman Siddique who had imported Mercedez Benz under the Transfer of Residence facility and the said car was sold to South Indian Corporation Ltd. The charge against Irshad Ali is that he helped in the sale of the car. The Commissioner in paras-37 & 38 has recorded his findings against the said appellant which is as follows :-

"37. As mentioned earlier, Shri M.Irshad Ali is a trader in cars. He has acted in tandem with Shri M.Krishnan in importing cars of various make for sale in India. If the had done this in the normal course as provided in the law, he would not have come to adverse notice. But unfortunately has taken recourse to generate foreign exchange not through legal channels but by fabricating documents to suit provisions of law. Such acts done during the course of any business do a lot of harm to the economy apart from violating norma laid down by the law.

38. In the instant case, nobody has clearly explained, including Shri M.Irshad Ali, as to how the car came into the possession of Shri Abdul Rahman Siddique which costs about Rs. 9,00,000/- and how the customs duty of Rs.10,86,310/- was paid and that too in a freely convertible foreign currency. Thus, in the absence of any satisfactory reply or explanation I hold that the charges levelled against Shri Abdul Rahman Siddique is proved."

9. Appeal No., C/383/2000 - K.T. Kuppaiah. This appeal arises from Order-in-Original No. 25/2000 (Appg.) dated 25.5.2000 passed by the Commissioner of Customs, Chennai. In this case, there is penalty of Rs.10000/- on Shri K.T. Kuppaiah on the allegation that he has acted a broker and he was aware of the import of the car against the provisions of law and he had chosen to plead ignorance. The allegation against him is that he had arranged to sell the car imported by one Shri Sahib Maricar Kadersa Maricar Sahib Maricar from UAE vide Bill of Entry No. 58239 dated 11.10.95 through Air Cargo Complex, Chennai. The imported had declared that the vehicle was in his possession for a period of more than 1 year in UAE prior to importation. The charge against the importer before confiscation of car and penalty on him is not considered alongwith this appeal as the said appeal is not filed and it is not known as to whether the said importer has filed any appeal. The charge against this appellant is that he had stated that the vehicle was in possession of Shri A.M.C. Cader at Nawab Habibullah Avenue, Nungambakkam that Shri Cader had requested him for arranging buyers and that he introduced Shri A. Rathnam of Bangalore to Shri Cader; that he did not know the details of the importer and that he came to know that Shri A.M.C. Cader passed away; that since the transaction took place in 1995, he was not in possession of any documentary evidence. He had denied having played any role in the import of the car, declaration or any other contravention of law. He has stated that he was only a humble person living only on car brokerage, and he was called to the residence of A.M.C. Cader to help in disposing of the vehicle and he had was only a petty broker and had no other connection with the offence. The Commissioner has noted that he did not reply to the SCN nor appeared for personal hearing. Therefore, he presumed that he does not have any interest in pursuing the case and decided the case based on the records. The penalty has been imposed on the basis of statements recorded. Appellant is challenging the proceedings and contends that the role played by him would not under the car liable to confiscation or imposition of penalty, and points out to the order given by the Bench at the time of hearing stay petition. Vide Stay Order No. 888/2000 dated 20.10.2000, the Bench had prima facie disagreed with the findings of the Commissioner that appellant being a broker had abetted in dealing with the car, the import of which was found to be unauthorised. It has been noted that if at all there was abetment on the part of the said broker, in the view of the Bench, that it was subsequent to the import. Since the disposal of the car is subsequent to its clearance from Chennai Port on payment of duty by the importer and since cars are not notified under Section 123 of the Customs Act, 1962 therefore Bench at prima facie stage expressed its view that appellant broker is not liable to penalty on account of abetment on allegation of import of car or assisting in the sale of the said car. On the basis of said finding, the Bench granted full waiver in depositing the penalty amount, and on further finding that prima facie department has not made to any case to impose any penalty on the appellant.

10. In all these appeals, Shri Satish Sundar, Advocate appeared and argued the matter. He pointed out from the facts of the each case and submitted that in so far as the Irshad Ali is concerned, there is no evidence produced against him for abetting or importing the car or with regard to mis-declaration or associating in clearing the car. He was only a friend of Mr.M. Krishnan and Sh. Krishnan used to stay with him. He used to help Krishnan in arranging for sale of cars. He was not aware of the complexities of the import or violation of the terms of the policy. For that reason, he submits that no penalty could be imposed on the appellant. Ld. Counsel contended that the entire activity of bringing the car was done by Shri Krishnan. Irshad Ali cannot be presumed to be involved with any of the activities of Krishnan and the importer bringing the cars and selling the same. He contended that there was not contravention of any of the provisions of law in selling of cars. He contended that there was no flow back of funds or receipt of any consideration or commission and the Commissioner in the extracted portion has clearly held that there is no evidence to this effect and when such is the finding given by the Commissioner, then the question of imposing of penalty would not arise. He submitted that there has to be evidence on abetment as held by the Apex Court in SRI RAM Vs THIS STATE OF U.P., reported in AIR 1975 SC 75. He also the residence of A.M.C. Cader to help in disposing of the vehicle and he had was only a petty broker and had no other connection with the offence. The Commissioner has noted that he did not reply to the SCN nor appeared for personal hearing. Therefore, he presumed that he does not have an interest in pursuing the case and decided the case based on the records. The penalty has been imposed on the basis of statement recorded. Appellant is challenging the proceedings and contends that the role played by him would not render the car labial to confiscation or imposition of penalty, and points out to the order given by the Bench at the time of hearing stay petition. Vide Stay Order NO. 888/2000 dated 20.10.2000, the Bench had prima facie disagreed with the findings of the Commissioner that appellant being a broker had abetted in dealing with the car, the import of which was found to be unauthorised. It has been noted that if at all there was abetment on the part of the said broker, in the view of the Bench, that it was subsequent to the import. Since the disposal of the car is subsequent to its clearance from Chennai Port on payment of duty by the importer and since cars are not notified under Section 123 of the Customs Act, 1962, therefore Bench at prima facie stage expressed its view that appellant broker is not liable to penalty on account of abetment on allegation of import of car or assisting in the sale of the said car. On the basis of said finding, the Bench granted full waiver in depositing the penalty amount, and on further finding that prima facie department has not made out any case of impose any penalty on the appellant.

10. In all these appeal, Shir Satish Sundar, Advocate appeared and argued the matter. He pointed out from the facts of the each case and submitted that in so far as the Irshad Ali is concerned, there is no evidence produced against him for abetting or importing the case or with regard to mis-declaration or associating in clearing the car. He was only a friend of Mr. M.Krishnan and Sh. Krishnan used to stay with him. He used to help Krishnan in arranging for sale of cars. He was not aware of the complexities of the import or violation of the terms of the policy. For the reason, he submits that no penalty could be imposed on the appellant. Ld. Counsel contended that the entire activity of bringing the car was done by Shri Krishnan. Irshad Ali cannot be presumed to be involved with any of the activities of Krishnan and the importer bringing the cars and selling the same. He contended that there was no contravention of any of the provisions of law in selling of cars. He contended that there was no flow back of funds or receipt of any consideration or commission and the Commissioner in the extracted portion has clearly held that there is no evidence to this effect and when such is the finding given by the Commissioner, then the question of imposing of penalty would not arise. He submitted that there has to be evidence on abetment as held by the Apex Court in SRI RAM Vs THIS STATE OF U.P., reported in AIR 1975 SC 75. He also relied on the judgment of Bombay high Court rendered in GOPAL MAYAJI PARAB Vs T.C.SETH reported in 2000 (126) ELT 102 (Bom.) and that of RADHA KISHAN BHATIA Vs UOI & Others reported in AIR 1965 SC 1072. In respect of K.T. Kuppaiah, he pointed out to the prima facie finding given by the Bench that the sale has taken place after the importation and clearance by the customs authorities and the Commissioner has imposed penalty of Rs. 1000/- simply because that appellant had failed to appear and failed to file his objections. it cannot be held that K.T.Kuppaiah is guilty of alleged offences. The contravention was done by single person Krishnan. The appellant had only introduced the purchaser and such an action does not lead to any conclusion of abetting in the smuggling of car as he was not engaged in mis-declaration of value or with regard to clearance of the car.

11. Ld. DR Shri S. Arumugam appeared alongwith SDR and argued at great length in all these matters, and reiterated the findings given by the Commissioner.

12. On a careful consideration of the submissions, we notice that the Commissioner in respect of appeal C/114/99 has given his findings against the appellant in internal pages 16 & 17 of his order. Even as per the findings recorded, it is seen that appellant is not the importer nor has he in any way committed any offence pertaining to manipulation of documents and mis-declaration and also violation of subject notice 202/PN/92-97 dated 30.4.94. The Ld. Commissioner has brought out appellant's role as alleged in the SCN in as much as that he was only a friend of Krishnan, who was helping in import of the cars. Merely because, appellant is a friend and accommodated in his house and introduced him to bank for opening his account and helped the car being parked in the house of B.Venkatachalam that itself does not lead to any conclusion of offence pertaining to misdeclaration and manipulation of the documents. All these activities have taken place after the clearance of the goods. Even the role prior to the import of the goods does not implicate Irshad Ali with regard to misdeclaration or manipulation of documents. He had no role to play in the import of cars. Merely because he is a car dealer and known to Kirshnan that itself will not lead to the conclusion that he has abetted in the offence or is in any way connived to commit the offence as alleged in the SCN and upheld in the impugned order. We are not impressed with the findings arrived at the hence the findings arrived at in C/114/96 imposing penalty of Rs. 2 lakhs is set aside.

13. We notice that in appeal C/116/99, the transaction had been committed by the same Krishnan and the role played by purchaser, South indian Corporation Ltd. The revenue is relying on the same evidence adjudicated by the very same Commissioner to proceed to impose penalty of Rs. 1 lac. It is surprising as to how the Commissioner can take two views pertaining to same set of facts relating to misdeclaration. This itself clearly shows non-application of mind. The facts being similar in this case as that of above appeal, the ratio of the our findings clearly applies to the face of this case also. Merely because Irshad Ali has helped Krishnan in opening bank account and in arranging to keep the car at Valasaravakkam that itself will not lead to the conclusion pertaining to the role played by him in import of cars and manipulation of documents, which allegation is against Shri Kirshnan. who was arranging export of cars from Dubai, by manipulation of documents in such a way as to fit into the conditions of ITDC policy and Public Notice 202/92. The allegation that Irshad Ali had assisted Krishnan on subsequent sales is not supported by cogent and reliable evidence. There is nothing on record to show that Irshad Ali has manipulated the documents or has engaged in preparation of the documents while giving his assistance to Krishnan. Only after the customs clearance of the imported cars, he has dealt with it by disposing of the cars to South Indian Corporation Ltd., who are the buyers. As a car broker in the field, it is his business to deal with the cars. Merely because he dealt with the cars that by itself will not lead to the conclusion that he was the brain in importing the car or in committing violations under the Customs Act. No evidence has been shown in any of the activity of smuggling or misdeclaration or of any contravention of law except that fact he is known to Krishnan and helped him. Merely because he is known to krishnan that by itself will not lead to any conclusion regarding various activities or role played by Krishnan. However, we are not giving any finding on the role played by Krishnan as his appeal is not listed. The finding against the appellant is not sustainable and the same is set aside by allowing the appeal.

14. In appeals C/925 & 926/97, the same Commission has relied on the identical facts. We have already extracted the order passed in C/926/97. The findings is identical as recorded in the order in respect of C/925/97. The Commissioner has clearly spelt out as to how Shri Singaram Jawahar came to possess the impugned car which by all means is a luxurious car costing quite a lot of money and how customs duty was paid in freely convertible foreign currency. He has come to the conclusion that in the absence of clear cut evidence to prove the two payments, it has to be believed that M.Irshad Ali and M.Krishnan might have made good these payments through unauthorised channels and also manipulated the records relating to the car, namely, year of manufacture and registration. Therefore, the Commissioner has upheld the charge against the appellant. We are not at all impressed with the findings. Having given a clear cut finding that there is no evidence on record regarding persons who have paid foreign exchange, it is difficult to uphold a charge which is based on a mere surmise, assumptions and presumptions. There has to clear cut cogent evidence to prove the allegation against Irshad Ali having made the payment. When the Commissioner has come to a clear conclusion that there is absence of clear cut evidence to prove the two payments, then he cannot proceed to presume that Irshad Ali and Krishnan would have made good these payments through unauthorised channels and also manipulated the records relating to the car, namely, year of manufacture and registration. Revenue having failed to produce the necessary evidence and the Commissioner having clearly noted about this fact, he cannot, for the sake of merely passing an order, confirm the order in this manner, which is violative of principles of justice, equity and good conscious. Such type of orders would shake the public confidence as after having given clear finding that there is absence of clear cut evidence to prove the two payments, he cannot hold that these two persons would have made good these payments through unauthorised channels, without producing an iota of evidence. We notice that as the finding is not sustainable in both the appeals i.e. C/925 & 926/2000, passed by the same Commissioner on identical set of facts, therefore both the orders are set aside. We notice that we have strengthened in our finding by the judgment rendered by Apex Court in the case of RADHA KISHAN BHATIA Vs uoi & Others, AIR 1965 SC 1072, wherein the Apex Court clearly laid down that mere finding of fact recorded by the Commissioner of Customs that a person was in possession of smuggled goods does neither imply that the Collector of Customs had considered the question of the person's being concerned in the commissioner of the offence of illegal importation of the goods nor in any way justifies the conclusion that the person mst have been so concerned. The Apex Court observed that other circumstances indicating that the person had some connection with the importation of the good prior to their actual import have to be established. The finding of the Apex court in the above case, squarely applies to the facts of the present case. The Apex Court again in the case of SHRI RAM Vs STATE OF U.P., air 1975 SC 175 has held that in order to constitute abetment, the abettor must be shown to have "intentionally" aided in the commission of the crime. Hon'ble Apex court further held that mere proof that the crime charged could not have been committed without the interposition of the alleged abettor is not enough compliance with the requirements of Section 107 of the Indian Penal Code. The Apex Court has further held that a person may, for example, invite another casually or for a friendly purpose and that may facilitate the murder of the invitee. But unless the invitation was extended with intent to facilitate the commission of the murder, the person inviting cannot be said to have abetted the murder. The Apex Court further observed that it is not enough that an act on the part of the alleged a better happens to facilitate the commission of the crime. International aiding and therefore active complicity is the gusty of the offence of abetment under the third paragraph of Section 107 of Indian Penal Code which deals with offences of the abetment. The charge here is also about appellant having abetted in the offence in importation of the cars. There is not even an iota of evidence produced by revenue in support of this charge and hence the judgement cited supra applies to the facts of this case. In the case of GOPAL MAYAJI PARAB Vs T.C.SETH - 2000 (126) ELT 102 (Bom.) the Bombay High Court has held that the act of importation contrary to restrictions and prohibitions would be complete once the customs barrier are crossed. It is at the moment of time that the restriction and prohibition are violated. Whatever is transacted with reference to the goods subsequent to that period of time would not be dealing with smuggled gold and/or goods imported contrary to prohibition and restriction. That dealing cannot be an act of importation into Indian contrary to prohibition and restriction. The Hon'ble Court further observed that appears to be the direct effect of language of Section 167(8) of Customs Act, 1878; that the only fact against the petitioners is that they have in respect of smuggled gold helped in having the same melted. The Hon'ble High Court held that acts and attempts to destroy evidence that the smuggled goods are smuggled cannot be considered as part and parcel of the transaction of smuggling. The offence is complete at the period of time when the goods cross the customs barrier contrary to the restriction and prohibition of import imposed. Therefore, penalty levied against the petitioners was held to be without jurisdiction and was set aside.

In that case, the Hon'ble High Court also relied on the judgment of ATTORNEY GENERAL Vs ROBSON - 20 LAW JOURNAL EXCHEQUER 188 and that of the judgment of the Apex Court in SHEWPUJANRAI Vs COLLECTOR, 1983 (13) ELT 1305 (SC).

15. We have already noted that in the stay order No. 888/2000 dated 20.10.2000 rendered in the case of KUPPAIAH, prima facie the Tribunal held that there is no offence having been committed after the import and clearance of the cars and cars are not notified under Section 123 of the Customs act. It has been clearly observed that the said broker cannot be subjected to penalty on account of abetment in having sold or assisted in the sale of said cars. We confirm the findings already given in the stay order, the thus all these five appeals on this charge are allowed and impugned orders set aside in the defect and circumstances of the cases and in the light of three judgments noted above.

16.We now take up the appeal C/942/97 filed by Shri K.T. Kunjumon. This appeal arises from Order-in-Original No. 77/97 CAU dated 11.9.97 passed by the Commissioner of Customs (Sea), Chennai by which the appellants's disclaimer from associating himself with either the importer or with the trader was rejected by the Commissioner although the imported car Mitzubishi Pajero Intercooler Turbo 2800 was seized from his possession for he was the buyer from the importer who had filed the Bill of Entry and cleared the same on payment of duty. His statement has been recorded and even FIR drawn for having seized the car from him. The Commissioner has noted that the show cause notice was issued to the importer namely Shri Singaram Jawahar, who did not participate in the proceedings and had sent his father to the personal hearing to make a statement that he is not in India. The proceedings were also initiated against Shri M.Krishnan and Shri Irshad Ali. Shri Krishnan's appeal is not listed as it is not known as to whether he has challenged the imposition of penalty of Rs.1 lakh while the appeal of M.Irshad Ali arising from this order has already been taken up and findings recorded supra. The charge against the importer Shri Singaram Jawahar, Krishnan, Irshad Ali and K.T. Kunjumon i.e. appellant was, as to why the imported car named above imported under Bill of Entry No. 23932 dated 20.4.96, declared, valued and cleared at Rs.8,29,839/- should not be enhanced to Rs. 12,11,896/- under Rule 8 of Customs Valuation (Determination of Price of Imported Goods) Rules 1998 and why differential duty of Rs.3,82,057/- should not be demanded under proviso to Section 28(1) of the Customs Act, 1962 and why the subject car should not be confiscated under Section 111(d) and (m) of the Customs Act, 1962 read with section 3(3) of Foreign Trade (Development and Regulation) Act, 1992 and why penalty should not be imposed under Section 112 (a) Customs Act, 1962 on these four persons besides calling upon Shri Singaram Jawahar to explain as to why penalty under Section 114 A of the Customs Act, 1962 should not be imposed. At the time of seizure of the car and investigation, the officers have clearly found that this imported car had been sold to the appellant K.T.Kunjumon, Cine Producer and the R.C. book of the said vehicle stood in his name. As stated, Singaram Jawahar, importer did not appear before the investigating officers except his father N. Singaram who deposed that his son is a qualified B.E., (Mech.) and he left India to Dubai for employment about 6 years back; that he was working as Site Engineer in a company, that he was earning about Rs.30,000/- per month and he used to send about Rs.25,000/- through bank; that he was owning company car and he was not having his own car; that he resigned his job and returned to India during April, 1996; that he brought some household articles; that he came to know subsequently from his son that he had imported one car in his name as requested by one of his friend by name Krishnan of Dubai to help him and dispose of the same; that Sh. Krishnan had taken delivery of the car and with the help of Irshad Ali disposed of the car to appellant namely K.T. Kunjumon. thus, at the time of seizure of the car, it is very clear that the ownership as on that date as stood in the name of K.T. Kunjumon. However, the order does not mention the person on whom the differential duty is required to be confirmed except to say that the value has been enhanced and same is granted redemption on payment of fine of Rs.1 lac. Penalty of Rs.3,82,057/- has been imposed equivalent to the duty evaded alongwith interest on importer Singaram Jawahar under Section 114A of the Customs Act 1962. The Commissioner in the impugned order has dropped proceedings against by K.t. Kunjumon by giving benefit of doubt to him on the ground that transaction between him and M.Irshad Ali has to be taken as a normal transaction in the course of any ordinary business and therefore the Commissioner held that he did not find any reason to hold him responsible for violation of any provisions of Customs Act.

17. The Counsel in this matter has taken a serious objection to the order by not considering the plea of appellant regarding ownership which is required to be taken under Section 125 of the Customs Act and also to grant redemption of car to the appellant as the car was seized from him and the registration had already been effected in his name. The Counsel pointed out that in terms of Section 125 of the Customs Act, the owner of the car and the person from whom it is seized has got interest in the proceedings and therefore the authorities had rightly seized car from him and had rightly implicated him and called upon him to explain in the matte. The Commission has not dealt with any of the points pertaining to the enhancement of valuation and as to why it should be enhanced and did not decide the claim of the appellant. The Counsel argued that he is required to be given an opportunity to contest valuation, and imposition of fine and take delivery of the seized car. He contends that there is serious violation of principles of natural justice in this matter and hence seeks for appropriate relief in the case.

18. Shri G.S.Menon, Ld.SDR appeared in this matter and merely stood up and reiterated the contention without any arguments.

19. On a careful consideration of the submissions, we notice that there is merit in the submission made by the Counsel.The Show Cause Notice clearly has spelt out that the car was seized from the appellant and also that registration had been effected in his name. The Commissioner has given a clear chit to appellant for note having involved in any of the offence.However, Section 135 of the Customs Act, 1962 stipulates that the person from whom the vehicle has been seized is required to be given an opportunity to take possession of the same on payment of fine.The section clearly indicates that-

"When the confiscation of any goods is authorised by this Act, the officer adjudicating it may, in case of any goods, the importation or exportation whereof is prohibited under this Act,or under any the law for the time being in force, and shall, in the cases of any other goods, give to the owner of the goods (emphasis supplied)or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit.

Provided that, without prejudice to the provisions of the proviso to sub-section (2) of section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon.

(2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1), the owner of such goods or the person referred to in sub-section(1), shall, in addition, be liable to any duty and charges payable in respect of such goods".

20. In terms of the above sub-section (2), as the duty has been enhanced, and the liability falls on the person from whom it has been seized i.e. appellant, who is the owner of the vehicle therefore, the plea that he has to be given an opportunity to contest the valuation and imposition of redemption fine is totally justified and within the ambit of law as pleaded by the Ld.Counsel.There is clear violation of principles of natural justice .We also find that there is absolutely no application of mid in so far as this appellant's case is concerned.In that view of the matter, the order passed by the Commissioner on valuation and enhancement of duty and also imposition of fine is set aside and matter remanded to the Commissioner to hold de novo proceedings by issuing notice of hearing to K.T.Kunjumon as well as to the importer Shri Singaram Jawahar and re-adjudicate the matter in terms of law, and the citations that would before him in respect of other cases. Thus, the appeal is allowed by way of remand.

21. C/745/97 & C/748/97 -Shaikh Azizur Rehman & M.Nazeerudeen Both these appeals arise from a common order-in-original No.79/97 dated 24.7.97 by which the Commissioner of Customs, House, Madras has confirmed the allegation made in the show cause notice and has enhanced the assessable value of imported far namely Mitsubishi Pajero / Green colour / Engine No.4M40 at 0300/Chassis No.CONV-460SJ 00730 imported by one Shri Shailkh Azizur Rahiman, Nellore, under the Transfer of Residence facility and the allegation is about the contravention of Public Notice No.202/ITC/92-97 dated 30.3.94 and with regard to mis-declaration of value and date of manufacture. On account of this allegation, the Commissioner has enhanced the assessable value to Rs.11,95,032/- and demanded differential duty of Rs.302,404/- under provisions of Section 28 (1) of the Customs Act. He has held that the car being tainted in nature is liable for confiscation under Section 111 (d) & (m) of the Customs Act, 1962 read with Section 3 (3) of Foreign Trade (Development and Regulation)Act, 1992, however, granting option to redeem the car on payment of a nominal fine of Rs.1 lakh.There is penalty of Rs.4,02,404/- being equal amount of duty sought to be evaded under Section 114A of the Customs Act on Shaikh Azizur Rahman. No penalty has been imposed on co-notincees namely Dr.Mohan and Shri Abdul Razack.However, penalty of Rs.1 lac has been imposed on Mr.M.Nazeerudden under Section 112 (a) of the Customs Act.

22. The investigations carried out by the authorities brought to light the following facts which are narrated in paras-17 & 18 of the order which is reproduced herein below:-

17. The investigation carried out as set out above brought to light that-

(a) The subject vehicle had been cleared under Bill of Entry No. 37953 dated 24.06.96 on the strength of Invoice No.118/95 dated 15.02.95 purported to have been issued by M/s.Dignity used Cars Exhb., Sharjah, UAE for Dirhams 62,000.

(b) The importer had produced a certificate dated 02.02.95 purported to have been issued by M/s.Mitsubishi Motors Corporation, Tokyo indicating the date of production of the subject vehicle as December 12,1994 on the FOB price as Japanese Yen 18,00,000.

(c) The importer had produced Private Vehicle Registration Boom purported to have been issued by Ajman Traffic Department, UAE indicating the date of registration of the subject vehicle as 25.02.1995.

(d) An affidavit had been filed by the importer stating that he had purchased the subject car out of his own income and it did not involve any remittance of foreign exchange from India directly or indirectly, that the duty for the car will be paid from his NRI account and that he had used the car for more than a year.

(e) Shri Shaikh Azizure Rehman had admitted, during the course of investigation, that he as only a name lender, that he had no investment either in the purchase of the car in Dubai or in the investment in getting draft in foreign exchange for payment of customs duty and that he neither possessed/used the vehicle when he was aborad.

(i) As admittedly Shri Shaikh Azizure Rehman has not made any investment in the purchase, import and clearance of the vehicle in question, the sale proceeds of the vehicle in question had been received by Shri Nazeerudeen from the purchase of the vehicle.

(j) Shri Nazeerudeen had already imported a car in his name under Bill of Entry No.393 dt 03.01.96 and sold it to one Shri Shanmugam. Further, he had sold one Mercedes Benz imported by Shri Thaip Sahib.By virtue of his profession in Dubai, he was conversant in car Trading/import. The manner in which the sale proceeds of the subject car was paid by Account Payee cheque to Shri Nazeerudeen but not in the name of importer and the fact that the sale proceeds had further been transferred to his account at Trivandrum which clearly brought out his involvement in the purchase, importer and sale of the car.

(h) Shri Shaikh Azizure Rehman, the importer who was a qualified accountant had neither retraced his statement.Vide letter dt 01.11.96 Ban of Baroda, Nellore had stated that 2 DDs of foreign exchange dt. 20.06.96 & 27.6.96 were presented for the purpose of Customs duty. The B/E was filed on 24.6.96 and the second draft dt. 27.6.96 for Rs.60,000/- was subsequently taken abroad since the value had been altered as seen from the B/E. As the importer had clearly stated that his foreign A/C in Barklays Bank Dubai was close during April'96, evidently those 2 drafts were arranged by a third person payment of customs duty.Further vide letter dt 06.11.96 form Rekha Lodge, it was confirmed that Azizure Rehman stayed as per the statement of Azizur Rehman.

(i) From the above, it appeared that the subject car had not been purchased at Dubai by Shri Shaikh Azizure Rehman nor was it in his use as claimed in the documents submitted to Customs at the time of clearance.Accordingly, the subject vehicle had been imported in contravention of the provisions of Public Notice No.202/ITC(PN)/92-97 dated 30.03.94 and therefore the subject vehicle appeared to be liable for confiscation under Section 111 (d) of the Customs Act, 1962.

(j) As set out above, the certificate dated 02.02.95 issued by M/s.Mitsubishi Motors Corporation, Tokyo, which was submitted at the time of clearance of the subject vehicle showed the FOB(Japan)price as Japanese Yen 18,00,000 whereas the Fax message received from M/s.Missubishi Motors Corporation,Tokyo on 22.08.96, in response to the enquiry made by DRI, Madras, showed the FOB price for domestic market ad Japanese yen 23,04,2000. In the said Fax message M/s.Mitsubishi Motors Corporation had indicated the date of manufacture of the subject vehicle as the January 1995 whereas in the above certificate the same had been indicated as 12th December 1994. Similar vehicles, manufactured on 09,01,95 by M/s.Mitsubishi Motors Corporation, Tokyo was sold at Dubai on 11.04.96 by M/s.Cars Trade, Dubai for a price of Dirhams 1,22,000/- for the purpose of export form Dubai. On the face of these, the invoice purported to have been issued by M/s.Dignity Used Cars Exhb. Sharjah, was appeared to be not acceptable as one representing the real value of the subject vehicle.Accordingly, the date of actual purchase of the car, the value of the car had been misdeclared with a view to evade payment of correct duty and the same appeared to be liable for confiscation under Section 111(m) of the Customs Act, 1962.

(k) Demand Drafts bearing No.534757/3072 for Rs.4,00,000/- and 534758/3073 for Rs.10,00,000/- drawn in favour of Shri M.,nazeerudeen payable at Trivandrum Main had been issued by Syndicate Bank, Nandarnam Branch by debiting the account No.23805 on Shir Nazeerudeen.This amount represented sale proceeds of the Car in question and appeared liable for confiscation under provisions of Section 121 of the Customs Act, 1962.

(i) S/Shri Shaikh Azizur Rehman and M.Nazeerudeen Adbudl Razack having involved themselves in the illegal import of the subject vehicle, as set out above, appeared to bailable for penal action under Section 112 of the Customs Act, 1962 as also under section 112 of the Customs Act, 1962 as also under Section 132 and 135 ibid.

(j) The subject vehicle came to be seized from Dr.N.S.Mohan's possession who had purportedly purchased the subject vehicle and the same appeared to be liable for confiscation.

18. From the above it appeared that there had been wilful mis-declaration of value, mis-declaration of date of manufacture of the goods and hence appeared to bailable for confiscation under Sec.111 (d) & (m) and other penal provision of Customs Act 1962 read with Section 3 (3) of Foreign Trade (Development & Regulation) Act, 1992 as mentioned supra.In the case of ineligibility of ITC Public Notice No.202/92-97, the item car being a restricted item under 156 (J) (3) require a licence. All the concerned persons viz. Shailk Azizur Rehman, M.Nazeerudeen, Abdul Razaak and Dr.N.S.Mohan were called upon to explain as to:

(i) why the value of the cars should not be enhanced to Rs.11,95,032/- under Rule 8 of the Customs Valuation (Determination of Price of Imported Goods)Rules, 1988;

(ii) why the differential duty of Rs.4,02,404/- should not be demanded under proviso to Section 28 (i) of Customs Act, 1962 on the subject car.

(iii) why the subject car should not be confiscated under section 111 (d) & (m) of Customs Act, 1962 read with section 3(3) of Foreign Trade (Development & Regulation) Act, 1992;

(iv) why penalty should not be imposed under Section 112 (a) of Customs Act, 1962 on Shri Sheikh Azizur Rehman, Shri M.Nazeerudden and Shri Abdul Razzak;

(v) why a penalty should not be imposed under Section 112 (b) of the Customs Act, 1962 on Dr.N.S.Mohan.

(vi)why a penalty equal to the duty sought to be evaded along with interest should not be imposed under Section 114(a) of Customs Act, 1962 on Shri Shaik Azizur Rehman."

23. On the basis of the above allegations, the appellant were called upon to explain and file their replies. Shri M.Nazeerudeen in his reply submitted that actions performed by him were only in the usual course of his business as a car broker and he had nothing to do with the import of this car.He did not either provide finance for buying the car or purchased the car himself nor used Shri Azizur Rehman's name for importing into India and that he was only a bonafide broker who acted in the pursuit of his occasion and without any knowledge of any irregularities that Shri Azizur Rehman might have committed in importing the car; and that he neither had any knowledge nor had any reason to believe that the car was a smuggled one and as such the amount covered by the demand draft was not liable for confiscation under Section 121 of the Customs Act and the amount represented by the two Demand Draft were not the sale proceeds of the vehicle but the sale proceeds had already been taken by Shri Abdul Razak belonging to Shri Shaikh Azizur Rehman.He further submitted that the charges against him was solely based on the submissions of Shri Azizure Rehman given before the DRI officers on 15.8.96 and 27.11.96; and that the statement of Shri Azizure was contrary to facts/truth and negation of legality/fact; and that he(Shri Rehman)virtually was not the importer and himself claimed TR facility in terms of ITC PN No.202-92-97 dated 30.3.94 and filed TR declaration; and that Shri Rehman cannot get out of law of the land by throwing the blame on him and that he(Shri Nazeerudden)had only acted as a commission agent or a broker in the transaction of the sale of the vehicle after clearance through shri Anwar and Shri Dvi Prasad of Madras to a bonafide purchaser Dr.N.S.Mohan of Madras. He, therefore, denied any involvement with regard to allegation of mis-declaration of value and contested the case.

24. Shri Shaikh Azizur Rehman did not respond to the show cause notice.He was represented by the Advocate during the personal hearing before the Commissioner and the Counsel before the Commissioner submitted that he had import the said car with all the necessary documents and paid appropriate duty from his own earnings from abroad and the car was also cleared out of customs charges.He denied all the allegations mentioned in the show cause notice and stated that his initial statement was recorded in coercions and duress.he further submitted that he still stands by the original document cited to the officers at the time of initial clearance and denied the allegations made in the SCN. There was no written reply or written submissions before the Commissioner except the arguments placed by the Advocate during the personal hearing.

25. The Commissioner in the impugned order had noted that the present importation of the car is under the Transfer of Residence facility.The Bill of Entry in respect of the said car was field on 24.6.96 in Air cargo complex on behalf of the importer namely Shaikh Azizur Rehman. After the car was cleared form the custom house it was purchased by Dr.N.S.Mohan during July'96 through a broker, namely, Shri Anwar.The investigations revealed that the car was not cleared according to the provisions of Public Notice No.ITC/PN/202/92-97 dated 30.3.94. Therefore, the car was seized on 16.8.96 and thereafter SCN was issued to all the parties who in turn filed their replies except the appellant Shaikh Azizur Rehman who made only his submission through his Counsel before the Commissioner stating that he had purchased this car through his own earnings while the charges was that he had not purchased through his own earnings and the entire transaction was funded from India by Shaikh Azizure Rehman.Shri M.nazeerudeen also appeared and submitted only after the direction was given by High Court of Kerala.Mr.Nazeerudeen in his detailed statement had given how the transaction took place including the details of bank accounts and the demand drafts and rest of the details which is recorded in the statement.Therefore, the Commissioner concluded both on merits as well as on valuation that the Shri Shaikh Azizure Rehman has not purchased this car through his own funds and the foreign exchange has been transferred from India and therefore there is clear violation.He has clearly upheld the charge that investigating authorities had enquired with M/s.Mitsubishi Corporation, Tokyo who indicated the price of the said car as Japenses Yen 23,04,200/-, as the price in the Japanese market.The Commissioner,as per Rule 8 (2) (iii) of the Customs Valuation Rules, 1988, took the view that the price of the goods on the domestic market on the country of exportation should not be taken as a price of assessable value. Therefore, he has held that his price cannot be taken as the price for arriving at the assessable value of the car. On the other hand, the investigating authorities had clearly brought on record the transaction value and the details of transaction which took palace in Dubai which was ascertained from a trader in Dubai which revealed the car having sold at the price of Rs.1,22,000 Dirhams for the purpose of export from Duabi whereas the appellant Sh.Shaikh Azizur Rehman declared the value of 62,000/- Dirhams. Thus, the differential price of 60,000 Dirhams was undervalued. Hence, in view of this uncontroverted clinching evidence the Ld.Commissioner has enhanced the price to Rs.1,22,000 Dirhams as there was undervaluation clearly established by the investigating agency through evidence.Hence, he passed the final order as already noted.

26. Shri S.S.Radharkrihnan, Ld.Counsel appeared for the appellant in this case and Shi G.Sree Kumar Menon,Ld.SDR appeared for the Revenue.Shri S.S.Radharkrishnan,Ld.Counsel, forcibly and vehemently submitted that case that the assessing officer had already assessed the car at Rs.8,30,287/- rejecting the invoice price. The price is sought to be enhanced on the basis of statement referred to in para-16 (j) of the show cause notice dated 3.1.97.He referred to para-17 (j) of the SCN which had stated that the `similar vehicle manufactured on 9.1.95 by M/s.Mitsubishi Motors Corporation, Tokyo was sold at Dubai by M/s. Cars Trade, Dubai for a price of DHS 1,22,000/- for the purpose of expert from Dubai. He pointed out that the son called DHS 1,22,000/- is the retial price at Dubai and it is not the manufacture's price for export either from Japan or Dubai which merit any guide line or acceptance. Therefore, he submitted that there is no justifiable ground to adopt an unsubstantiated domestic market price in Dubai in preference over the FOB valued obtained by DRI from Mistsubishi Motors Corporation Y 23,04,2000 which value in Indian rupees would be Rs.7,55,778/-. Even if this value less @22% depreciation for the period Jan'95 to June'96 would work out to Rs.5,89,515/-. By adding @ 20% freight, which works out to Rs.1,17,903/- and further insurance @1.125%, which works out to plus landing charges @1% i.e. Rs.7,154/- to the said amount of Rs.5,89,515/- then the assessable value would be worked out to Rs.7,22,530/-. He submits that in fact the assessment of car at Rs.8,30,287/- at the time of clearance was more than the correct assessable value of Rs.1,07,757/- and in fact they will be eligible to refund and there was no mis-declaration of value even assuming that the value is worked on the basis of the FOB price of the manufacture as obtained by DRI. He contends that the price has been fixed on the basis of similar sale price of a similar vehicle by one trader in Dubai which cannot be considered for the purpose of applying Rule 8 of the Valuation Rules.This value has to be computed with reference to the list price of the car in the country of manufacture after deduction of Trade discount and depreciation as per the Customs Appraising Manual.He contends that the two well established practice of the Customs for the purpose of ascertaining the value of used can (sic) are (i) manufacturer's price minus depreciation and (ii) world car catalogue price minus depreciation and discount. He submitted that in his written submissions that Parker's car price guide is generally relied upon by the Customs Department. He has contended that the guide issued in May'96 quotes the new price for Mitsubishi Space Wagon 1995 (Pejaro) make at $ 16,939/- and the assessable value works out to Rs. 7,30,000/- vide his worksheet submitted before us. He relied on the judgement of PREMKUMAR - 1989 (40) ELT 340 (T). He contends that the Tribunal has held that in case world car catalogue is not available with the customs, it may ascertain the manufacturer's net price to wholesale dealers in the course of international trade and if this is not feasible, the assessment may be maintained at the appellant's invoice price. He, therefore, submitted that the value has not been properly worked out in this case and requires to be set aside besides penalty under Section 114A cannot be imposed as the said section was promulgated first time in September, 1996 while the Bill of Entry was filed on 21.6.96 and the Apex Court has clearly held in the case of COMMISSIONER OF CUSTOMS, COIMBATORE Vs ELGI EQUIPMENT - 2001 (128) ELT 52 (SC) that the Section 11AC of Central Excise Act which is pari materia to Section 114A does not have retrospective applicability.

27. Ld. Counsel Shri S.S. Radhakrishnan did not make any serious attempt to urge with regard to role of M. Nazeerudeen and the evidence which is on record and his admission that the car was used by him and appellant was merely a name lender. He had merely stated that there was no violation of ITC notification and appellants were not involved in the matter. Even on a specific query to deal with this aspect, Ld. Counsel kept harping only on the valuation aspect and on the mandatory penalty.

28. Ld. SDR Shri G.S. Menon merely read out the finding portion without even taking us through the enormous evidence relied by the department. It has now fallen to the lot of the Bench to do the research and take out all the judgements on its own. It is hoped that Ld. SDR would give better and effective assistance in important matters, where, the Bench, really requires the assistance.

29. On a careful consideration of the submissions in this case, we notice that the main charge brought out against Shri Shaikh Azizur Rehman was that he sought TR facility as provided for under Public Notice No. 202/92-97 dt. 30.3.94. In this regard, he had file (1) Bill of Entry alongwith Invoice No. 118/95 dt. 15.2.95 issued by M/s. Dignity Used Cars Exhibition, Sharjah, UAE for the sale of the subject vehicle to Shri Shaikh Azizur Rehman for Dirhams 62,000. (2) A certificate dated 02.02.95 issued by M/s. Mitsubishi Motors Corporation, Tokyo indicating the date of manufacture of the subject vehicle as December 12, 1994 and FOB (Japan) price as Japanese Yen 1,800,000. (3) He had produced the translation of private vehicle registration book issued by Ajman Traffic Department, Ministry of Interior, UAE, indicating the date of registration of the subject vehicle as 25.02.95. (4) Lufthansa Cargo AG certificate dated 12.6.96 No. DXBGF/US/028/96. (5) Airway Bill No. 020-8351-9693 dated 10.6.96 of Lufthansa Cargo AG. (6) Certificate dated 29.6.96 of Bank of Baroda, Nellore. (7) Demand Draft dated 29.6.96 for Rs. 9,14,872/- issued by Bank of Baroda, Nellore in favour of Commissioner of Customs, Madras A/c. Shaikh Azizur Rehman. (8) An affidavit confirming that he is eligible for the benefit of Notn. as required under PN 202/92-97 dated 30.3.94. On the basis of these documents, the customs officials accepted the documents as bonafide one and cleared the same under the said invoice. However, after the investigation was taken up and statements recorded, it came to light that Shaikh Azizur Rehman had subsequently sold the car to Dr. N.S. Mohan, proprietor of M/s. Ozone International, Chennai. The statement of Dr. Mohan revealed that the car was brought to his residence by one broker namely Shri Anwar, who had introduced one Shri Devi Prasad of M/s. Devi Designers & Decorators, Madras. On further investigation, it was revealed from the statement of these persons that the payment was to be arranged from M/s. Birla Global Finance by Anwar, and the same was to be handed over to Sh. Devi Prasad instead of the importer, Shaikh Azizur Rehman; that Devi Prasad requested Dr. Mohan to give the payments in cheque in his favour and he is in turn issued cheque for Rs. 17,50,000/- in favour of Nazeerudeen on 28.7.96, that the balance amount was paid in cash to Devi Prasad and that the car in question was in his possession since payment has been made.

30. Shri Devi Prasad in his statement corroborated the version of Dr. N.S. Mohan with regard to the subject vehicle. The statement of Sheik Azizur Rehman was recorded on 15.8.96 whose statement is in para-6 of the order which is noted herein below:-

"6. Shri Shaikh Azizur Rahiman, S/o. Shaikh Abdul Rahiman, Nellore appeared before the officers of DRI, Madras on 15.80.96 and gave out a statement. In the said statement he had inter alia stated that while he was in Dubai, Nazeerudeen was introduced to him by a common friend, that Nazeerudeen told him that if he took the car in his name, he would pay some money for his medical treatment for which he agreed, that he returned to India on 13.06.96, that on 07.06.96, Nazeerudeen met him and told him that he had made arrangements for booking one Pajero in his name and showed the cargo bill for the same and also said that he would come and meet him at his house at Nellore after the shipment arrived, that on 25.06.96 Nazeerudeen came and handed over drafts in his name which he deposited in his NRE account at Bank of Baroda, Nellore, that on 26.06.96, they took the draft No. 381555 for Rs. 9,14,872 in favour of Commissioner of Customs, Madras A/c. Shaikh Azizur Rahiman to pay the Customs duty and Nazeerudeen left with the draft asking him to come to Madras on 31.06.96 that according he came to Madras on 31.06.96 and after clearance of the subject vehicle, handed over all the documents to Nazeerudeen because he has no investment either in the purchase of the car in Dubai or in the investment in getting the draft in foreign exchange for payment of Customs duty, that thereafter Nazeerudeen rang up twice and asked him to tell on any enquiry that the vehicle was in Bangalore or to say that the vehicle had been sold to Mr. Mohan, that he was having a savings account with Barclays Bank, Dubai which stood cancelled in April, 1996 as the balance was below the minimum and that for the entire purchase of the car, taking foreign exchange draft for payment of customs duty and for any other clearing charges, he did not pay any money out of his earnings either in Dubai or in India. In his further statement dt. 27.11.96, Shri Shaikh Azizur Rahiman while reiterating his earlier statement that he had not purchased the subject car in Dubai and all arrangements towards its purchase, bringing two drafts in foreign exchange for payment of Customs duty and the sale of the car and the receipt of sale proceeds were all done by Shri Nazeerudeen and had further stated that in his earlier statement dt. 15.08.96 he had written that he had met Nazeerudeen on 31.06.96 which was not correct as June has only 30 days and it should be read as 30.06.96 wherever the date 31.06.96 appeared in his statement dt. 15.08.96."

31. Thereafter, the investigation officers raised the residential premises of Nazeerudeen at Mylapore, Chennai and carried out search and found the documents listed out in the Mahazar which were seized. During the course of the investigation, on enquiry, Syndicate Bank, Nandanam Branch, Chennai vide their letter dated 17.8.96 forwarded the account opening form and specimen signature, photograph of account holder viz. Nazeerudeen, statement of accounts and a letter from Nazeerudeen intimating change of address. From the statement of accounts, it is seen that an amount of Rs. 17,50,000/- being the sale proceeds of the subject car was paid into the account of Nazeerudeen on 31.7.96 by cheque and two demand drafts payable at Thiruvananthapuram for Rs. 4 lakhs and Rs. 10 lakhs were issued from the said account on 16.8.96. Further, enquiries were done and the Bank was directed to stop payment. Enquiries also revealed the date of manufacture of the car to be January 7, 1995 and that the car had been sold to Shaikh Azizur Rehman by M/s. Dignity Used Cars Exhibition, Sharjah, UAE for sale of subject vehicle for Dirhams 62,000 vide invoice No. 118/95 dated 15.2.95. While the certificate of M/s. Mitsubishi Motors Corporation, Tokyo indicated that the date of manufacture of the subject vehicle as December 12, 1994 and FOB (Japan) price as Japanese yen 1,800,00, further enquiries with the M/s. Mitsubishi Motors Corporation, Tokyo vide fax dated 22.8.96, informed the date of manufacture of the vehicle as 9.1.1995.

32. Shri K. Radhakrishnan of M/s. Freight Master, clearing & Forwarding Agency, Madras in his statement dated 24.9.96 had stated inter alia that one Kuppiah of CIT Colony, Alwarpet, Car broker introduced Nazeerudeen for the clearance of a Benz car imported from Sharjah in the name of Nazeerudeen during January, 1996; that the car imported by him was cleared under Bill of Entry No. 396 dated 3.1.96; that subsequently Nazeerudeen came with one Shaikh Azizur Rehman and met him in the Air Cargo Complex during June 1996 for the clearance of one Mitsubishi Pajero Car imported in the name of Azizur Rehman and handed over the relevant documents for the clearance of the said; that as Nandkumar of M/s. Cafco Syndicate had requested him to give some business to him, he got the Bill of Entry signed by him and processed the same and cleared the car.

33. The statement of M. Nazeerudeen was recorded on the direction of Hon'ble High Court of Kerala and para-15 of the order gives the entire details of this submission which is reproduced herein below:-

"15. Shri M. Nazeerudeen, S/o Shri Mustaffa, residing at S/17, TNHB Flats, LUZ Corner, Madras-4 appeared before the officers of DRI, Madras on 24.9.96 in pursuance of the directions of the Hon'ble High Court of Kerala and gave out a statement on the same day. In the said statement he had stated, inter alia, that he was working in Compala Used Car Company, Sharjah from 1984 to 1996 as a sales representative, that he was given commission based on the business he got for the company, that on an average he was getting an income of about Rs. 4 lakhs per annum, that he had a SB account in Syndicate Bank, Nandanam Brach, Madras and one SB account in City Union Bank, Armenian Street, Madras that he invested the entire money that he saved while working in Sharjah for 12 years after his expenditure and purchased one Benz car and brought the same to India when he returned to India under facility, that the said car he sold at Madras for Rs. 24 lakhs, that he knew Azizur Rehman for the last 4 years while he was in Dubai, that they came into contact through their mutual friends Abdullah and Sharafuddin, both working in Duabi, that Shaik Azizur Rehman was aware that he was bringing a car, that when he permanently returned to India leaving Dubai, the said Azizur Rehman contacted him and asked whether he could help him if he brought a car, that he agreed to help him and gave his Cellular Phone No. to him, that when he (Azizur Rehman) came to Madras, he contacted him and while taking over phone he told that he had brought one Pajero Car and asked him to help to clear the said car and showed the papers of the car brought by him, that the said papers were given to the said clearing agent through Freight Masters, that at the time of payment of Customs duty, he (Nazeerudeen) visited Nellore and along with Azizur Rehman, he went to his bank and the amount required for payment of duty was taken from his (Azizur Rehman's) NRE account by him and they both came to Madras, met the clearing agent and arranged for clearing the said car, that after clearance of the car, he (Azizur Rehman) gave the car and all relevant papers to him(Nazeerudeen) for selling the car and took an amount of Rs. 4,50,000/- for his expenses and returned back, that apart from the aforesaid Rs. 4,50,000/- he spent an amount of Rs. 42,000/- for meeting the expenses for clearance of the car, that thereafter the said car was sold to one Dr. Mohan (Ozone International, Madras) through Devi Prasad who was friend of his friend Jabbar, that the car was sold for Rs. 22,50,000/- that the payment was received as cheque for Rs. 17,50,000/- and cash of Rs. 5,00,000/-, that the said cheque was deposited in his account in Syndicate Bank, and that after getting the said payment, he gave Rs. 53,000/- to Azizur Rehman when he came to Madras. In the said statement, Shri Nazeerudeen answered to the questions put to him that he did not say that he will give money to him (Azizur Rehman) if he brought car, but promised to render help required by him if he brought car, that he did not give the draft for Rs. 8,60,000/- + 60,000/- but it was true that he went alongwith him (Azizur Rehman) to his bank for taking amount for payment of duty and after taking the draft for payment of duty he came to Madras along with him (Azizur Rehman) only, that it was true that he visited Nellore twice, once for telling about the duty required to be paid and thereafter for taking duty amount by draft, that only he told him (Azizur Rehman) money, that Shaikh Azizur Rehman introduced to him one Abadul Razak at Madras and told him that when the car was sold, and amount of Rs. 5,45,000/- may be deducted from the sale amount and the remaining Rs. 14,55,000/- be given to Abdul Razak, that he sold the said car for Rs. 22,50,000/- but he told Azizur Rehman that the car was sold for Rs. 20,50,000/- that he told Azizur Rehman that the car was sold for Rs. 20,50,000/- that he told Azizur Rehman that an amount of Rs. 50,000/- would be taken by him as his commission, that he gave the aforesaid Abdul Razak an amount of Rs. 10,97,000/- even before receipt of the full amount of sale proceeds of the said car from the sale proceeds of his Benz car aforesaid in two instalments, that he had to give him an amount of Rs. 3,58,000/- that he did not know the relationship between Azizur Rehman and Abdul Razak, that he gave money to Abdul Razak in Woodlands Drive-in Restaurant, that his phone number was given to Abadul Razak by Azizur Rehman, that they have contacted through phone only and did not know the phone number or address of the said Abdul Razak and that this role in respect of the aforesaid Pajero car was that since Azizur Rehman was his friend and he was to get some money as brokerage for selling this car, he made all arrangements as aforesaid for the clearance and sale of the said car. He had further requested in the said statement that taking into consideration whatever facts he had stated, he was not be discharged from the case and the stop payment ordered for the draft for Rs. 14,00,000/- may be released to him. He further gave out a statement dt. 11.11.96 confirming that a room in Rekha lodge was booked for Azizur Rahiman by him from 23.06.96 to 30.06.96. In his second statement dt. 27.12.96, Mr. Nazeerudeen has admitted having financed the clearance of the car.

34. On appreciation of the entire evidence on record, it is very clear that Sheikh Azizur Rehman has admitted that Nazeerudeen had contacted and had offered him medical treatment if he agrees to bring the car and that he would make arrangements for making payments by depositing in the Bank of Baroda, Nellore and he went to Dubai for that purpose. Neither Shri Shaik Azizur Rehman appeared nor has filed written submissions before the Commissioner. Therefore, it is too late in the day now for the Tribunal to accept through his Counsel the submissions that there was no involvement in the matter. The initial statement has not been realised nor Nazeerudeen has resiled from his statement that he had initially imported Benz car and that he was not entitled to again import the car. The collusion between these two persons is very clear on record. Therefore, the entire statements recorded from them being voluntary and evidence is clearly disclosed through supporting bank documents that Nazeerudeen had financed for purchase of this case. This uncontroverted and unrealised evidence proves the department's charge that provisions of public notice No. ITC/PN/202/92-97 dated 30.3.94 have been violated. Thus, the impugned car is liable for confiscation and for imposition of fine. It is seen that the Commissioner has upheld the charge of violation and for such violation, confiscation is justified. The Commissioner has only imposed a nominal fine of Rs. 1 lac. Therefore, we have to uphold this portion of the order and confirm the confiscation and imposition of fine of Rs. 1 lac and that there is no illegality in this portion of the impugned order. The penalty imposed on Shri M. Nazeerudeen under Sec. 112(a) of the Customs Act, 1962 is justified for the reason that he has not resiled from his statement and from the entire role played by him in arranging funds for importing this car. The evidence is clinching and clear and consideration for sale of the car was received by him to whom cheques were issued by Dr. Mohan in Nazeerudeen's name and the entire amounts were seized from the bank. Therefore, his role in contravention of the provisions of law is established and hence penalty of Rs. 1 lac imposed on him is not on the higher side and requires to be confirmed. In so far as the imposition of penalty under Sec. 114A of the Customs Act on Sheik Azizur Rehman, we are in agreement with the Ld. Counsel's submission that the said section has got only prospective applicability as the same was incorporated in September' 96 while the Bill of Entry filing and clearance have taken place on 21.6.96. In that view of the matter, mandatory penalty imposed on Shaikh Azizur Rehman is set aside.

35. The only question left which is required to be considered is with regard to valuation, which has been very strongly urged to not in terms of Customs practice. On this, Ld. Counsel has very forcibly argued the matter and put for the arguments on the procedure adopted for valuation of imported cars. He pointed out that the department normal goes by (i) the manufacturer's price minus depreciation and (ii) world car catalogue minus depreciation and discount; or department relies on the Parker's car price guide. Ld Counsel submitted that if there is any contemporaneous import of identical car of same year of manufacture by another person, then that is also one of the criteria to be observed.

36. Ld. Counsel relied on the judgement rendered in the case of PREM KUMAR Vs. CC, 1989 (40) ELT 340 (T) wherein the aspect pertaining to valuation of passenger's imported car on the basis of world car catalogue price of same model less 15% discount was considered. It was also noted that resort to individual's invoice price without granting said discount is to be made only when such catalogue price is neither available nor ascertainable. The judgement also rejected the plea of the importer with regard to non-deductibility of freight, insurance and landing charges. The citation further holds that value should be done on the price of delivery of goods at the place of importation and further notes that it makes no distinction between an importer who becomes owner of the goods abroad and another who becomes owner on negotiating the import documents in India. It has also been noted that depreciation for running of car from manufacturer's factory to loading port and its deduction is impermissible on cars purchased and shipped but permissible when imported car possessed and used abroad. The judgement also deals with on the assessment of cars fitted with Air-conditioner.

37. We notice that the aspect pertaining to depreciation to be allowed is also covered by Vadodara Collectorate circular F.No. VIII/1-1/Cus/T/93 dated 15.6.93 which is reported at page T9 of 1993 (66) ELT which is a guide for the purpose of considering the extent of deduction in respect of old cars as laid down by the Board.

38. We note that in this case the Commissioner has straightaway accepted the contemporaneous import of similar cars on the basis of invoice of a similar car sold at Duabi. Such practice could also be acceptable as held by the Tribunal in the case of SHIVAJI PRABHUDAS BHATIA Vs. CC reported in 1990 (50) ELT 54 (T) wherein the question of mis-declaration of value of car in the Bill of Entry to evade customs duty was considered. It was noted that the value adopted by the Commissioner cannot be accepted in the absence of evidence to substantiate such valuation. It has been held that the price paid by the importer namely Dirhams 35,000/- should be accepted as value for the purpose of customs duty. Since the customs clearance permit produced by the importer fully covers this value, it was held that, the car was not liable for confiscation. However, on further examination, the Bench held that the importer had not declared Dirhams 35,000/- as the value of the car for the purpose of assessment but had declared only as Dirhams 32,000/-. The correct model of the car was also not declared. Therefore it was considered as a mis-declaration and on this count the confiscation and imposition of fine was upheld. This citation is required to be also considered by the adjudicating authority. After analysis of the said citation, we would he holding that this matter requires reconsideration on valuation.

39. In the case of WALIA ENTERPRISES, AMRITSAR Vs CC & CCE Chandigarh reported in 1987 (32) ELT 774, again the question of mis-declaration of price of the car and undervaluation was considered. It was noted by the Bench that the show cause notice issued mechanically on information received from others was not sufficient and it was held that the authority himself has not ascertained the price of contemporaneous import of similar goods, and therefore it was held that undervaluation had not been established and the benefit availed by the party wrongly. In this case neither there is evidence produced. We are of the view that the evidence is required to be appreciated in the light of law laid down in this judgement and the further judgements which we are noting it below.

40. We would like to observe that it was the duty of Ld. SDR to have brought to our notice various judgements on this subject. Even on persistent questioning from the Bench to cite case-law, Ld. SDR could not give his assistance to the Bench's satisfaction. It is the Bench which has now taken up the task of going through the entire evidence and the law on this point to clarify the aspect of valuation.

41. We would like to proceed with the latest case laws and go backwards on the aspect pertaining to valuation decided by the Tribunal as under :-

(1) In the case of UMESH KUMAR Vs. CC New Delhi - 2000 (124) ELT 1053 (T), the Tribunal considered the question of valuation of imported cars and held that the discount at the rate of 15% can be allowed where the price is to be assessed on the strength of world car catalogue and not on manufacturer's invoice. The Tribunal also considered the aspect pertaining to includibility of the price of A/C and music systems and held that addition of Rs. 40,000/- in the price of car on account of these two items, is an error apparent on face on record. The above citation referred to an earlier judgement rendered in B.P. SRIVASTAVA Vs COLLECTOR reported in 1995 (78) ELT 794 (T) and distinguished the Apex Court judgement in A V M S.K. SAREEN Vs COMMISSIONER, 1995 (80) ELT A-212 (SC).

(2) In case of INDU KANNA Vs CC New Delhi-2000 (115) ELT 520 (T), the Tribunal dealt with the case of import of Mercedez Benz car of 1983 model brought from U.K. The purchase price was not in evidence. The price was found from Parker's guide and 70% of the value was deducted on account of depreciation and a trade discount of 15% was also allowed to that insurance charges and freight was added. The Tribunal held that procedure adopted by the department was proper and there was no illegality in such procedure and value of the car was properly fixed by the department. Therefore, this judgment has a basis for determining the valuation, for consideration other appeals, which we are going to take up and discuss the matter.

(3) In the case of RAHUL MISRA Vs CC, New Delhi - 1999 (113) ELT 154 (T), the Tribunal considered the question of import of car under Transfer of Residence Rules. The Tribunal noted that the trade discount, VAT and road tax which was claimed before the Tribunal had not been claimed in the bill of entry and hence same were held to be not admissible and upheld the transaction value being in conformity with Parker's price catalogue and upheld department's determining the value which was taken from the very Parker's price catalogue. The Tribunal also found that there was an exchange of the car and the car was used only for a period much less than one year and therefore the benefit of Transfer of Residence Rules was held to be not available.

(4) In the case of GALAXY INTERNATIONAL HOTELS LTD Vs CC Bombay - 1999 (112) ELT 733 (T), the Tribunal again considered the aspect of valuation of import of second hand of car. The Tribunal held that deduction of registration tax of Hong Kong claimed at the first instance but certificate had not been produced at the relevant time; such certificate was held to be an import piece of evidence as same has been produced before the Tribunal. Therefore, the matter was remanded to the lower authorities for reconsideration.

(5) In the case of ELISUA ANTONY Vs CC Cochin - 1999 (108) ELT 108 (T), the Tribunal again considered the question of import of car under transfer of residence scheme which required that car should be used by importer for not less than one year prior to its import. It was noted that declaration had been made that car was of 1980 make and 200 D model, whereas on the enquiry made with the manufacturer of the car revealed that the car was manufactured in 1983 and was of 240 D model. It was also found that the car was not registered in the name of importer, who purchased the car on 25.11.92 and exported it on the same day. Therefore, the Tribunal upheld the confiscation order of car, redemption fine and penalty. However, the order being of 1993 make, the plea for depreciation of 70% was allowed instead of department's granting of 46% of depreciation. Earlier judgement of SURESH KUMAR Vs COLLECTOR - 1996 (87) ELT 667 (T) and that of S.R. CHANAN Vs COLLECTOR - 1996 (87)ELT 147 (T) were relied.

(6) In the case of PHILIP ABRAHAM Vs CC Cochin reported in 1999 (105) ELT (T), again the valuation of imported second hand car was considered. The Vadodara Collectorate Trade Notice No. F. VIII/1-1/Cus/T/93, dated 15/6/1993 referred to above was directed to be taken into consideration in remand proceedings. The depreciation on a graded reduction scale pleaded, without going into the condition of the car, for the years of use even beyond the fourth year upto an overall limit of 70% depreciation was directed to be reconsidered. In the light of the fact that department adopted a particular method in other cases and which is acceptable for the purpose of fixing of value under Section 14. It was noted that two different units of second-hand machinery may not be identical but for the purpose of Section 14, the method has to be evolved to ensure that the price as adopted is as near to what is envisaged under Sec. 14 of the Act.

(7) In the case of A. WAZIR SHAH Vs CC Delhi reported in 1998 (98) ELT 473 (T), the Tribunal held that price of car certified by Delhi office of manufacturer to be preferred to ex-factory price by Saudi dealer. It was noted that the reason for large price difference between the two prices was not adverted to and decided by the Additional Collector. However, the assessable value of the car was held not to be based on domestic price in Japan, but suitable adjustments to be made, and on that plea remanded the case for de novo consideration in the light of evidence produced.

(8) In the case of MOHAMMAD SAMIULLAH Vs CC Mumbai - 1998 (97) ELT 112 (T), the Tribunal decided the aspect pertaining to clearance without specific import licence for motor car in terms of above Public Notice. It was also found that Odometer of the car recorded only 53 Kms. run in a year. It was noted that listening to the music system of a car or using it for 53 Kms. in a year would not constitute use of the car as it is commonly understood. It was already noted that possession and use of the car for more than one year before importation in India had not been satisfactorily established. Therefore, it was held that benefit of notification was not available and confiscation of car was upheld however, release on payment of redemption fine was granted as the import of car noted to be not prohibited.

This portion of the judgement applies to the present case also. The judgement further noted that the original price list or sale documents or similar certificate from the manufacture had not been produced and therefore the matter was remanded for revaluation. Further, as there was a clear violation of public notice, penalty imposed in the case was confirmed boy the Tribunal. We notice that this judgement directly applies to the facts of the case. The Tribunal has relied on the judgement of K.I. PAVUNNI Vs ASST. COLLECTOR - 1997 (90) ELT 241 (SC).

(9) In the case of VISHAMBER NATH PURI Vs CC Mumbai - 1997 (96) ELT 56 (T), the Tribunal considered the valuation aspect of a second hand 1987 model 'Mazda-323' car. It was held that in the absence of manufacturer's invoice, transaction value non-availability material with Department showing the price of the model imported and non-production of relevant documents by importer valuation under Section 14(1) of Customs Act, and Rule 8 of Customs Valuation Rules, 1988 was just and proper. It was also noted that production of purchase invoice does not serve the purpose. However, it was held that depreciation is not to be worked out from the date of taking delivery of the car after purchase, since car comes on the road only after insurance. Therefore, the Additional relief to the extent of Rs. 2688/- towards damages sustained. This judgement has got a bearing on the present case and the Commissioner shall examine the ratio of this judgement while reconsidering the valuation issue.

(10) In the case of SURESH KUMAR Vs CC Bombay - 1996 (87) (T), the Tribunal considered the valuation of a car of 1983 model imported in Mat, 1988 purchased from a diplomat. The manufacturer's invoice had not been produced. Therefore, the claim for deduction of diplomatic discount said to have been granted to the original purchaser was not accepted. As no evidence of any diplomatic discount was granted, the Tribunal held that no deduction could be given on that account.

The Tribunal further noted that in respect of car Bluebird Satin Wagon 1983 model Datsun (plain model) imported in may, 1988, wherein valuation had not been mentioned in the Bill of Entry and the importer had also not produced manufacturer's invoice, the Tribunal held that price is required to be determined by reducing 20% from the price of Deluxe model of the same car and depreciation granted at 52% of the basic price.

(11) In the case of D.N. SETHNA Vs CC Bombay - 1996 (85) ELT 75 (T), the Tribunal considered the question of valuation of car imported one year after the date of purchase. It was found that the car got damaged at the time of import. Therefore, the Tribunal held that goods has to be assessed in the condition as they were on the date of import and further held that depreciation for full year is required to be allowed besides 15% trade discount.

(12) In the case of YOGESHWAR VARMA Vs CC New Delhi - 1996 (84) ELT 120 (T), the Tribunal considered the valuation aspect on the air-conditioned car. It was noted that the world car catalogue of 1981 was irrelevant being model and year of car imported being different. It was noted that genuineness of transaction value not had been doubted by the Commissioner and comparable import of similar or identical goods had not been made available. Therefore, transaction value was held to be acceptable for assessment of car. In the present case, the Revenue is relying on the evidence of contemporaneous goods which the Bench is now directing the Commissioner for reconsideration in the light of judgement being noted, hence this judgment is distinguishable.

(13) In the case of DR. A. ALGAPPAN Vs CC Madras - 1996 (83) ELT 171 (T), the Tribunal considered the aspect of import of 1983 model imported in February, 1985 by a diplomat. The car had been fitted with air-conditioner, radio decker and stereo cassette. Therefore, the Tribunal held that consolidated value of the car declared cannot be accepted. It was held that price shown in manufacturer's price list is to be adopted, and 10% diplomatic discount had been allowed by the Commissioner (Appeals). The Tribunal held that depreciation @19% + 3% was required to be granted having regard to the date of manufacture and date of import. It was also held that the actual freight charges had been correctly added in the value. It was also held that Air-conditioner was not necessary, thus, it is required to be separately valued.

(14) In the case of CC Cochin Vs KUMARAN KRISHNA KUTTY reported in 1994 (74) ELT 931 (T), the Tribunal considered the question of inclusion of freight charges from the port of shipment or from the country of origin. The Tribunal held that freight charges is required to be added from the country of origin in the assessable value of the imported car.

(15) In the case of SUDESH KUMAR ARORA Vs CC - 1993 (65)ELT 491 (T), the question of valuation of imported cars on the basis of world car catalogue was considered and the Tribunal held that 15% trade discount is required to be granted. It had also held that quantum of fine to have a nexus with the gravity of offence and other relevant factors while imposing fine in lieu of confiscation under Sec. 125 of the Customs Act, 1962. A number of judgements of High Courts, Tribunal and also one Supreme Court judgment have been noted in this regard.

(16) In the case of BHARAT HOTELS LTD. Vs CC - 1992 (62) ELT 721 (T), the import of car 'Mercedez Benz' of 1989 model was considered and it held that 15% trade discount on TELCO's price list of 1989 can be adopted while assessing the imported car under Sec. 14 of the Customs Act, 1962.

(17) In the case of B.K. ROY Vs CC - 1992 (59) ELT 329 (T), the Tribunal considered the valuation of imported car from Sweden and held that assessment has to be on the basis of price of same model in World Car Catalogue price and not on the basis of its retail price. Depreciation of 55% arrived at after inspection of actual condition of car was held to be adequate. The freight charges from Sweden, country of manufacture to Calcutta, Port of importation, was held to be relevant.

(18) In the case of V.S. VERMA Vs CC - 1991 (56) ELT 628 (T), valuation of imported Mercedes Benz of 1975 model was considered and so held that car is required to be re-assessed in accordance with practice of Delhi Custom House to take ex-factory price given in world car catalogue after allowing deductions on account of trade discount and value added tax (VAT).

(19) In the case of R.L. BERI Vs CC - 1991 (55) ELT 629 (T), the Tribunal considered the question of adoption of best judgement assessment in respect of imported purchased for use abroad and after using there for a few years after purchase the same was imported into India. The Tribunal held that price paid at the time of purchase of car is not to be taken as transaction value but value is required to be determined under Rule 8 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 and sufficient deductions on account of trade discount and depreciation considering the condition of cars is required to be given while assessing the same.

(20) In the case of SHRI H.C. RAI CHOUDHURY Vs CC - 1989 (43) ELT 96 (T), the Tribunal considered the valuation of imported car prior to October 1983 on the basis of price list is not correct and held that value declared by appellants at US$ 3638 CIF is correct value on account of the fact that importer being an individual and not a business man and therefore asking him to supply the price was observed as 'surprising'. The Tribunal noted that the imported being an importer and not carrying business activity therefore asking him to supply manufacturer's price list is not proper.

(21) In the case of SARITA BALI Vs CC - 1989 (42) ELT 297 (T), the Tribunal considered the valuation of "Honda Civic" Model 1981. The Tribunal held that the car had suffered extensive damage due to accident and therefore claim of 60% depreciation was held to be reasonable and allowable.

(22). In KAILASH CHANDER KAPUR Vs CC - 1990 (45) ELT 586 (T), the Tribunal held that Bill of Entry presented for the clearance of car on 25/2/96 and entry inwards granted and therefore act of import of car is to be taken as completed in the legal sense. Since the Tribunal noted that rate of duty applicable will be the rate in force on that date and the subsequent higher rate of duty is not sustainable. The Tribunal further held that price calculable with reference to rate of exchange as in force on the date of presentation of bill of entry is to be taken and not at the time of paying the price of car in foreign country.

(23) In the case of CC Kandla Vs P.K. MATHEW VARGHESE - 1999 (107) ELT 686 (T), the use of car in terms of noted ITC Public Notice was considered. It was noted that car had run from 7000 kms. in 2 years in which it was in importer's possession about 3000 Kms/month. The contention of the importer therein was that he was provided transportation by his employer and he used the car sparingly and that his friends used to drive car occasionally and Tribunal observed that such instances of friend's driving another's car is not known. Therefore, assumption that car was purchased merely for taking benefit of public notice was noticed to be unreasonable. It was noted that public notice does not prescribe minimum benefit of the notification.

42. In view of large number of judgements on valuation noted by us and also Board's circular which lays down the procedure for grant of deduction, we are of the considered opinion that in so far as the valuation in this case is concerned, the Counsel's plea for remand for readjudication is justified. Therefore, we remand the matter to the Commissioner of Customs, Chennai for considering the plea for revaluation of the car and same is required to be done after affording an opportunity of hearing and taking into consideration the case-law already noted above. Thus, these appeals are allowed by remand only on the aspect of valuation. The penalty imposed under Section 114A on Shri Shaikh Azizur Rehman is set aside while imposition of redemption fine of Rs. 1 lac and penalty of Rs. 1 lakh on Shri M. Nazeerudeen is confirmed.

Appeal No. C/470/2000 - Kunhambu Poduval

43. This appeal arises from OIA No. 845/99 dated 30.12.99 passed by the Commissioner (Appeals) Chennai confirming the confiscation of imported Mitsubishi Pajero car which was valued at Rs. 6,28,553/- CIF covered by Bill of Entry No. 34549 dated 22.5.98, however, granting redemption on payment of fine of Rs. 7.50 lakhs under Section 112 (a) of the Customs Act, on the ground that the car was imported contrary to the Public Notice No. 3 (PN) 97-2002 dated 31.3.97 and the passenger had attempted to import the car on the basis of fabricated documents in contravention of the Exim Policy read with the Customs Act, 1962. The Commissioner (Appeals), however, has reduced the redemption fine to Rs. 5 lakhs and penalty to Rs. 1 lac. The Commissioner (Appeals) on her own has relied on the market value of the car as appeared in Business Standard Publication of July 1999 that 1992-94 model Pajero 2.8 Turbo Diesel has a market value of Rs. 12 lakhs. The Commissioner (Appeals) did not accept the proof of actual freight documents produced on the ground that the same had not been produced earlier. Further, the Commissioner has rejected all the documents which had been produced by the appellant. The documents had been issued by the concerned Government authorities in Duabi from where the car had been imported. Appellant had been working there for a long time and in terms of policy, he had brought for his own use. However, the investigating agencies had found later, after first inspection that the sticker of the car which showed the date of manufacture.

44. it is contended by the appellant that true documents issued by U.A.E. Government authorities as regards private vehicle registration of the car in appellant's favour cannot be rejected as they are all issued by authorised government agency and there cannot be any doubt about the same in the absence of any rebuttal evidence by the investigating officials. It is also contended that the first examination of the car on 23.5.98 did not reveal any such sticker. The second examination of the car was done on 17.6.98 when sticker was said to have been recovered on which the clearing agent's signature is dated 16.6.98 against the re-examination on 17.6.98. It is contended that between the first examination on 23.5.98 and the second examination on 17.6.98 the car was in the custody of the department and it is all possible that a sticker would have been affixed after the first examination by the officials to use as an evidence against the appellant.

45. The Commissioner (Appeals) has given a finding that in view of the fact that M/s. Mitsubishi Motor Corporation, Japan, the manufacturers of the car have confirmed the date of manufacture of car as 19.7.93, and its purchase by a Japanese in Tokyo had been upheld by the lower authorities and also further finding that it could not have been registered in Dubai on 2.9.93, therefore all the Govt. documents of registration in Dubai were not accepted. This has been challenged by the appellant on the ground that department itself has received a fax from M/s Mitsubishi Motor Corporation that the car was produced on 19.7.93 and as per the message received by the Hindustan Motors from M/s Mitsubishi, the car was registered in Japan on 31.8.93 in the name of one Iguchi, Tokyo Japan. Appellant had pointed out that M/s Mitsubishi had clearly informed that they were not the prepared to divulge the name and address of the owner to the Administrator, Consulate General of Japan. They had given details to a private person in India, therefore the authenticity of this information is questionable and having no evidential value. Therefore, the entire findings is required to be set aside and the documents produce by the appellants should be accepted besides they are entitled to have normal deductions as per the Board's circular and the various judgements already noted. They also contend that documents had been produced pertaining to actual freight and the authorities were not justified in rejecting the documents and by adding 25%. As per the Board's circular, it is stated that once the actual freight and insurance available, then authorities cannot resort to 20% freight charges which is not as per law. The finding that no documents have been produced is not correct and documents were shown to the Tribunal for having been produced. They also contend that value of the car arrived at on the basis of Business Standard Publication of July'99 which was individually shown to the department and hence there was clear violation of principles of natural justice.

46. We have heard Ld. Advocate Shri H.S. Bhat and Shri S. Arumugam, Ld.DR.

47. Ld.Advocate referred to his written submissions and also all the various judgements to say that both the orders suffer from violation of principles of natural justice and that they are not sustainable orders as they have not properly arrived at the value and have unjustifiably rejected the actual freight charges, and that they have wrongly held that there is violation of the policy on account of higher cylinder engine size of more than 1600 cc. The Counsel pointed out to the Public Notice itself which shows that engine exceeding 4 cylinders of 1600 cc can be imported, if the same is in the use of the importer for more than one year prior to the date of importation. He took us through all the documents to show that he had paid money from his own savings and through loans he brought the car and he authorities have not challenged his aspect as the Policy does not require the appellant to disclose the sources of foreign exchange as long as the car has been produced in exchange and amounts are not gone from India.

48. Ld.DR Shri S. Arumugam relied on the Apex Court judgement rendered in the case of GAJRA BEVEL GEARS Vs CC Bombay reported in 2000 (36) RLT 719 (SC) and Board's circular F.No. 495/16/93-Cus. VI dated 26.5.1993 and reiterated the submissions.

49. On a careful consideration of the submissions, we notice there is lot of force in the submissions made by the Counsel in this case. It is clear that as on the date of the first inspection of the car, there was no sticker on the car but the sticker has come to be pasted on subsequent date and the clearing agent's signature was earlier to the second date of inspection. Therefore, merely proceeding on the basis of this evidence is not sufficient to uphold the alleged date of manufacture of the car. Documents produced by the appellant are original documents issued from the Governmental agencies of the country of export i.e. Dubai. Such governmental documents cannot be rejected in the absence of any enquiry made from them with regard to its genuineness. The department has proceeded solely on the basis of date of manufacture and the prices being taken from Business Standard Publication, July 1999 which has not been given to the appellants and the determination of the actual freight charges has not been taken into consideration. Therefore, the impugned orders suffer from serious lacuna and are violative of principles of natural justice. Therefore, it is but proper that the impugned order is set aside and matter remand to the original authority for de novo consideration to be decided in the light of evidence which is already on record and in the light of judgements already cited in this order. As we have remanded the earlier matter to Commissioner of Customs, Madras, it is hoped that the Commissioner shall also take up this matter, if it is feasible, so that a proper and correct order is passed after following the principles of natural justice and by applying correct appreciation of record. The Counsel also contended that as there was no violation, they are entitled for waiver of demurrage and in this regard relied on the Apex Court judgement rendered in the case of SHIPPING CORPN. OF INDIA LTD. Vs C.L. JAIN WOOLEN MILLS - 2001 (129) ELT 561 (SC). The original authority shall take into consideration this plea also about non-levy of demurrage in this case, if it is shown by the appellant that they have not violated any provision of public notice and that their documents are all in order. As the matter has been under seizure for a long time, the original authority shall endeavour of adjudicate in all the matters as early as possible and not later than four months from the date of receipt of this order.

Appeal No. C/MISC/280/00 & C/524/2000 - Sh. Balapandian Chandrasekar.

50. As all the cases pertaining to import of cars were taken up, the application for early hearing in this matter to club this case was also heard and allowed and the appeal taken up for hearing and reserved for orders alongwith bunch of appeals on which ordered were recorded supra.

51. In this case, appellant imported Mercedes Benz car which was confiscated by Addl. Commissioner of Customs, (SIIB) dated 21.3.90 under Section 111 (d) and (m) of the Customs Act, 1962, read with Section 3 (3) of the Foreign Trade (Development and Regulation) Act, 1992, on the ground that there was no owner of the vehicle and importer had not satisfied and conditions regarding use of the car for one year prior to this import and head also undervalued the car when declaring the price. However, appellants have been given option to redeem the car on payment of fine of Rs.2,70,000/- and penalty of Rs.30,000/- under Section 112 (a) of the Customs Act, 1962. The car is of 1992 model left hand drive, petrol driven and manual transmission car. The basis for fixing of the price is Parker's Guide, which refers to five different prices of new cars. The latest public notice No. 3(PN) 1997-2002 dated 1.4.97 has been quoted for alleging valuation. Ld. Counsel points out that the Parker's guide price cannot be accepted for the purpose of valuation. He also pointed out that deductions given as trade discount and permissible depreciation of 66& is not sufficient and proper and also so also arrival of the assessable value of the car and the same is not in keeping with the terms of the policy referred and the same is not in keeping with the terms of the policy referred and the judgement. He submits that car had not been registered in the name but it was in his use and the employer had certified about the same.

52. Ld.DR Shri S. Arumugam pointed out the Parker's catalogue and can be relied and the price has been correctly arrived at by giving deductions in terms of public notice as well as the Board's circular. He relied on the judgement of the Apex Court rendered in the case of GAJRA BEVEL GEARS Vs CC Bombay (supra).

53. On a careful consideration of the submissions, we notice that appellants have contested about reliance on Parker's catalogue price. We also notice that Tribunal has upheld the reliance on Parker's guide catalogue for arriving at the assessable value. The judgements are already cited supra. One such judgement is INDU KHANNA Vs CC New Delhi reported in 2000 (115) ELT 520 (T) which has been supported by Apex Court Judgement rendered in GAJRA BEVEL GEARS Vs. CC supra. Therefore, this contention of the Ld.Counsel is required to be rejected. In so far as the contention of the Counsel that registration of the vehicle need not be in his name and the same is not mentioned in the policy, and his possession itself is sufficient, is concerned, we hold that same is not supported by any citation but in fact the Tribunal in the case of ELISUA ANTONY Vs CC Cochin - 1999 (108) ELT 108 (T) has held that the car is required to be registered in the name of the importer who purchased it and it should be in his use for more than one year. In view of this judgement, the contention of the Counsel does not stand to reason and is required to be rejected.

54. We notice that as there was violation on these two counts, the confiscation is justified. Although a car with engine exceeding 4 cylinder of 1600 cc can be imported but as there is other two contraventions, the impugned order, in so far this case is concerned, has been judiciously passed and a proper view has been taken on all counts. Therefore, there is no merit in this appeal. We notice that redemption fine and penalty imposed in this case is very reasonable and very low compared to the normal redemption fine and penalty imposed in the similar cases. We do not find any merit in this appeal and this appeal is rejected.

(pronounced in open court on 10-7-01)