Judgment:
2. The appellant is a purchaser of an imported car, released through Customs after due assessment orders, on the declared value. The importer on verification of submitted duty paid customs clearance documents purchased the car. The Customs department took possession of the car, from him seized it and initiated enquires. The valuation of the car was ordered to be increased and consequent redemption fine of Rs. 8 lakhs arrived at, on this additional valuation now arrived at; the department has ordered additional duty on the original importer and not the present appellant. However, the appellant being a purchaser of the car, in the market, under a bonafide belief that it is Customs duty paid car, is now required to pay the redemption fine. Hence this appeal.
3.(a) The learned DR relies on the decision in the case of UOI v. Jain shudh Vanaspati Ltd. and VXL India Ltd. v. cc, Mumbai , to submit that once clearance has been effected under the provisions of Section 47 and if the department finds fraud or other reasons, the assessment can be reopened and necessary action to confiscate the goods can be taken and therefore the present order should be upheld. As regards the decision in the case of Mohan Meakin Ltd. v. CCE, Kochi , he submits that a Supreme Court's decision is relied upon by the Commissioner.
(b) As regards VXL India Ltd., relied upon by learned DR, we find that in that case no redemption fine was arrived by the Ld. Commissioner, on the grounds of bonafides on purchasers part. In this case also the bonafides of the purchaser are pleaded & not contested. Therefore, following the VXL India Ltd. decision, no confiscation was called for, in this case, ab initio. Duty was to be demanded, from the original importer of the car, and not from the buyer.
(c) The Apex Court in the case of an importer car seized from a bonafide purchaser, has held in the case of Mohan Meakin Ltd. 6. ...Having released the goods thus into he market and permitting sale of the same, in our opinion, it is not open to the Collector to initiate another proceeding under another clause of Section 111 to recover the so called differences in valuation of the imported goods from the ultimate bonafide purchaser for value. If the Collector failed to make proper enquires as to market value of the goods and released the same after a half- hearted adjudication, we fail to see why a subsequent purchaser be saddled with the liability of under valuation more so in the back grounds of the fact that the appellants had no role to play either in the import or earlier adjudication proceedings.
Following the same, findings it to cars this case on all forms, instead of Jain Shudh Vanaspati case in this view, when original assessments on B/E are held to be appealable orders, by the Lager Bench of this Tribunal & the apex court (See Priya Blue Industries Ltd. ), these proceedings have been initiated after an order of assessment has been arrived, after due enquiries, by the proper officer as envisaged under Section 17 of the Customs Act 1962.
Therefore, the confiscation liability, arrived again in this case cannot be upheld. Order of confiscation & fine are to be set aside and appeal allowed to that extent accordingly.