CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL MUMBAI WEST ZONAL BENCH CUSTOMS APPEAL NO: 86400 OF 2025 [Arising out of Order-in-Appeal No: 393(Gr.VB)/2025(JNCH)/Appeals dated 24^th March 2025 passed by the Commissioner of Customs (Appeals), Nhava Sheva, Mumbai-II.]

Rohit Ghanshyam Gupta Flat No. C-601, Marvel Aurum Lane No.7 Koregaon Park, Pune – 411001 … Appellant versus Commissioner of Customs (NS-V)

Jawaharlal Nehru Customs House, Nhava Sheva Tal: Uran, Dist: Raigad - 400707 …Respondent APPEARANCE:

Shri Dev Wadhwa, Advocate for the appellant Shri JK Jain, Joint Commissioner (AR) for the respondent CORAM:

HON’BLE MR C J MATHEW, MEMBER (TECHNICAL) HON’BLE MR AJAY SHARMA, MEMBER (JUDICIAL)

FINAL ORDER NO: 85091/2026 DATE OF HEARING: 25/09/2025 DATE OF DECISION: 22/01/2026 PER: C J MATHEW Shri Rohit Ghanshyam Gupta imported a ‘Rolls Royce Phantom’ car valued at AED 10,00,000 (approximately ₹ 2,35,00,000) supported by CPD Carnets no. GE50133418. Imports of car against carnet is exempted from duties of customs vide notification, [no. 296/76-Cus dated 2nd August 1976] which does not apply to ‘(a) legal persons referred to in article 1(e) of the Convention;

(b) persons normally resident outside India/ who on the occasion of temporary visit to India take up paid employment or any other form of gainful occupation.’

and, for alleged contravention of the latter, the car was held as liable to confiscation under section 111 of Customs Act, 1962 with option to redeem on payment fine of ₹ 21,00,000 under section 125 of Customs Act, 1962 solely for re-export besides imposition of penalty of ₹ 7,00,000 on the appellant. The affirmation of the confiscation, fine and penalty in order, [order-in-appeal no. 393(Gr.VB)/2025(JNCH)/Appeals dated 24th March 2025] of Commissioner of Customs (Appeals), Nhava Sheva has brought this appeal before us.

2. The sum and substance of the proceedings before the lower authority was that, despite holding a valid carnet, the appellant, by having undertaken business in India during his temporary stay had jeopardized eligibility to the exemption notification, [no. 296/76-Cus dated 2nd August 1976] and the ineligibility was determined on the finding that

‘In this instant case, Mr. Rohit Gupta vide letter dated 18.10.2024 submitted that he is the CEO of M/s Mantra Properties in Pune, Maharashtra. where he is actively engaged in real estate projects.

I find that during his temporary visit to India, he also continues to manage the real estate projects or any other business of Mantra Properties, during his visit in India, as evident from his Income Tax Returns filed in India. Hence, as such condition 2(b) of the said exemption Notification is not fulfilled in this case by the importer.’

3. Learned Counsel for the appellant submitted that invoking of section 111 of Customs Act, 1962 was incorrect inasmuch as there has been no suppression and more so as ‘income-tax return’ had been furnished along with letter for permission to clear the car. It was further submitted that the car has been lying under the custody of customs after import and had not been made use of consequently. Learned Counsel for the appellant placed reliance on the decision of the Hon'ble Supreme Court in Northern Plastics Ltd v. Collector of Customs & Central Excise [1998 (101) ELT 549 (SC)] to submit that claiming of an exemption, that was found to be inapplicable, should not have to result in confiscation when the remedy of re-assessment was available. It was further submitted that the appellant had not taken up any paid employment or gainful occupation during his temporary visit to India as business enterprises floated by him prior to leaving India, though continuing to be under his ownership, merely earned him returns without taking up his time and effort.

4. Learned Authorized Representative contended that the appellant is on record as having admitted to control over the business of M/s Mantra Properties and which continued to be with him during this tempo