Jatin Ahuja Vs Commissioner of Customs (CESTAT Delhi)
Conclusion: Car imported into India remained “new” for customs purposes even if it was registered abroad before export, provided the registration was a legal requirement and the car was unused, therefore, the question of demanding any duty short paid on account of re-determination of the assessable value did not arise.
Held: Assessee had imported a Bentley Flying Spur Automatic from the United Kingdom in October 2009 for personal use. The declared value was Rs. 73.84 lakh, based on an invoice from A.K. International (IE) Ltd., UK, quoting GBP 91,500. Customs duty was paid at the concessional 60% basic rate under Serial No. 344 of Notification No. 21/2002-Cus, applicable to new and unregistered cars. The vehicle had only 123 km on the odometer at import. In 2014, the Directorate of Revenue Intelligence (DRI) alleged that the car was not “new” because it had been registered in the UK before export and that its value was understated, citing UK HMRC data showing a higher showroom price of GBP 1,09,850. Principal Commissioner re-determined the value at Rs. 88.61 lakh, denied concessional duty, demanded Rs. 61.93 lakh in differential duty with interest, confiscated the car with an option to redeem on fine, and imposed penalties on Ahuja, the buyer, the customs broker, and its employee. Assessee argued that UK law required mandatory registration before export, which did not imply that the car was used. The car’s minimal mileage and inspection findings proved it was new. They argued that mandatory registration abroad did not affect “new” status for customs purposes. Revenue argued that registration abroad disqualified the car from “new” status and justified rejecting the declared value in favour of HMRC pricing. It was held that once it had been held that the car that was imported by assessee was a new Automatic Car was entitled to the benefit of the Notification, and the assessable value could not have been rejected under rule 12 of the 2007 Valuation Rules, the question of demanding any duty short paid on account of re-determination of the assessable value did not arise. Tribunal set aside the revaluation, duty demand, confiscation, and all penalties, allowing all four appeals.
