Pranav B Prem

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, has granted relief to luxury car importer Jatin Ahuja, Director of Big Boyz Toyz, by setting aside a 2016 order that had re-determined the value of his imported Bentley Flying Spur, denied concessional customs duty benefits, and imposed substantial penalties.

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The bench of Justice Dilip Gupta (President) and Member (Technical) P.V. Subba Rao held that the Bentley qualified as a “new car” for the purposes of concessional duty under Notification No. 21/2002-Cus., despite its prior registration in the UK. The Tribunal observed that UK registration was a legal requirement before export and did not disqualify the vehicle from exemption benefits. This interpretation was consistent with the Bombay High Court ruling in Noshire Moody and the Tribunal’s decision in Abbas Kuramputhoor, which had recognised registration for export as a procedural formality.

The dispute arose from the import of a Bentley Flying Spur Automatic in 2009. The vehicle, purchased from M/s A.K. International (IE) Ltd., UK for GBP 91,500, was declared with an assessable value of ₹73.84 lakh in the Bill of Entry dated 12 October 2009. Customs authorities later alleged undervaluation based on a UK price list quoting GBP 109,850 and denied the concessional 60% basic customs duty, instead applying the standard 100% rate on the ground that the car had been registered abroad prior to import.

The Principal Commissioner of Customs, ACC (Imports), New Delhi, re-determined the car’s assessable value at ₹88.61 lakh under Rule 3 of the Customs Valuation Rules, 2007, confirmed a duty shortfall of ₹61.93 lakh under Section 28(4) of the Customs Act, and imposed penalties totalling ₹15 lakh on Ahuja under Sections 112(a) and 114AA. The Bentley was also ordered to be confiscated, with redemption fine and penalties imposed on M/s Mera Baba Realty Associates Pvt. Ltd., which purchased the car after import, as well as on customs house agent Payless Cargo and its G-Card holder, Vikrant Kalia.

The Tribunal, however, noted that an inspection at the time of import confirmed the Bentley’s new condition, with only 123 km on the odometer. Citing precedents, it held that mandatory UK registration did not transform the car into a used vehicle for customs purposes. The declared transaction value could not be rejected under Rule 12 without concrete evidence that the price paid was different from that declared. The alleged “showroom price” could not replace the actual transaction value without proof that it reflected the price paid or payable at the time. Finding no justification for re-determination under Rule 3 or for invoking higher duty, the Tribunal set aside the demand of ₹61.93 lakh, annulled all penalties against Ahuja, Mera Baba Realty, Payless Cargo, and Vikrant Kalia, and revoked the confiscation order.

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All four appeals were allowed, with the Tribunal holding that the Bentley was a new car entitled to concessional duty benefits and that the declared value was acceptable. No duty demand, confiscation, or penalties survived.

Appearance

Counsel For Appellant: Pradeep Jain, Shri Sambhav Jain and Shri Sumit Sarna, Advocates

Counsel For Respondent:  Shankar, Authorized Representative 

Cause Title: Jatin Ahuja V. Customs Commissioner

Case No: Customs Appeal No. 52270 OF 2016

Coram: Justice Dilip Gupta [President], P.V. Subba Rao [Member (Technical)]