Cross-objections filed under Section 129A(4) of the Customs Act are independent proceedings and survive the withdrawal of the main appeal. Furthermore, absolute confiscation of imported goods is improper for mere regulatory violations; an option for redemption under Section 125 must be granted unless the goods are absolutely prohibited.

Per Mr. VASA SESHAGIRI RAO

The present proceedings arise from the import of a Toyota Land Cruiser Prado TZ-G, Right-Hand Drive vehicle under Bill of Lading No. GOSUTY0001033379 dated 12.09.2018 covered by Import General Manifest No. 2206355 dated 02.10.2018 filed at Chennai Port. The vehicle was declared as a used vehicle in the import documents. Since no Bill of Entry was filed, the consignment remained uncleared from 04.10.2018, despite notices issued by the custodian under Section 48 of the Customs Act, 1962 calling upon the importer to clear the goods. The importer neither responded to the notices nor came forward to clear the consignment. The vehicle was subsequently examined and referred for valuation, and the Automobile Association of Southern India (AASI), in its report dated 11.03.2021, certified that the vehicle was brand new and unused, having an odometer reading of 8 kilometres, and valued it at Rs.1,12,00,000/-.

2. Based on the said report, the department concluded that the vehicle had been mis-declared as used instead of new in the import documents and that the conditions applicable to the import of new motor vehicles under Chapter 87 of the Import Policy read with the Motor Vehicles Act, 1988 and Central Motor Vehicles Rules, 1989 had not been complied with. A show cause notice was therefore issued proposing confiscation under Section 111(d) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992 and penalty under Section 112(a). The adjudicating authority passed the Order-in-Original No. 84676/2021 dated 02.06.2021 ordering absolute confiscation of the vehicle and imposing a penalty of Rs.22,00,000/-. On appeal, the Commissioner (Appeals) upheld the confiscation but reduced the penalty to Rs.1,00,000/-. Aggrieved by the reduction of penalty, the Revenue filed the present appeal, which was later sought to be withdrawn in view of the Government Litigation Policy; while allowing the withdrawal, the Tribunal directed that the cross-objections filed by the respondent challenging the absolute confiscation be heard on merits.

3. The Ld. Authorized Representative Mr. Sanjay Kakkar appeared for the Revenue. The Ld. Advocate Mr. E. Ramesh appeared for the Respondent.

4.1 The Ld. Authorized Representative for the Revenue reiterated the findings recorded in the Order-in-Original and further submitted that the imported vehicle was declared as a used vehicle, whereas the examination and valuation report revealed that the vehicle was brand new and unused, thereby establishing mis-declaration in the import documents. It was further submitted that the import of new vehicles is subject to compliance with mandatory conditions prescribed under Chapter 87 of the Import Policy read with the provisions of the Motor Vehicles Act, 1988 and the Central Motor Vehicles Rules, including production of the required type approval certificates and other compliance documentation. According to the department, these mandatory requirements had not been fulfilled in the present case.

4.2 It was therefore contended that the vehicle had been imported in violation of the import policy conditions and consequently acquired the character of prohibited goods, rendering it liable for confiscation under Section 111(d) of the Customs Act, 1962. The Ld. Authorized Representative further submitted that the Revenue had initially filed the present appeal before this Tribunal seeking restoration of the penalty imposed by the adjudicating authority; however, the departmental appeal was subsequently withdrawn in view of the Government Litigation Policy prescribing monetary limits for fil