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Judgment
@JUDGEMENTTAG- JUDGEMENT
Dr. Rachna Gupta, Member (J)
The appellant has imported four "New Mercedes Benz V220D Sport Extra Long Auto" classifying under CTH No. 87032391. The said goods were imported from M/s Bimta Group Ltd., Castle Court, 41 London Road, Reigate, Surrey, RH2 9RJ, United Kingdom. The appellant filed EDI Bills of Entry No. 2456457 dated 14.07.2017, 2732842 dated 04.08.2017, 2732939 dated 04.08.2017 and 2456119 dated 14.07.2017 for clearance of the said imported vehicles/goods.
1.1 The goods were examined 100% on 1st check basis to check compliance of import licencing note of chapter 87 and to check eligibility of import. As per examination report the goods were found to be New Mercedes Benz V220D Chassis No. Engine No. as per Invoice.
1.2 From the scrutiny of documents submitted by importer, catalogue and COP of Mercedes Benz, the manufacturer, it is noticed that the vehicles are Diesel Driven having Engine Capacity of 2143 CC. The importer had claimed Import policy exemption under Para 7 of Import Licencing Note to Chapter 87. As per Para 7 of the Note ‘Import of New Vehicle having an FOB value of USD 40,000 or more and engine capacity of more than 3000CC for petrol run vehicle and more than 2500CC for diesel run vehicles by (a) Individuals, (b) companies and firms or (c) OEMs (Original Equipment Manufacturers who have manufacturing and service network in India) will be exempt from the conditions at S. No. 2(II)(a)(iv) and 2(II)(c) above. However, at the time of Customs clearance, a type approval certificate/COP of an international accredited agency from the country of origin or an EC Type Approval Certificate/ Certificate of COP, of an accredited agency from any member state of EU, including a notarized English translation thereof, shall be furnished. This Type Approval shall stipulate that the vehicle to be imported complies with all the ECE Regulations for the complete vehicle. The importer has to comply with provisions of Para 2 of Import Policy Note which they failed to prove.
1.3 Department therefore formed an opinion that the goods i.e. four Mercedes Benz cars imported vide said four Bills of Entry are liable to confiscation under Section 111(d) of the Customs Act, 1962 as the same shall fit into the category of restricted goods under the Foreign Trade Policy since its import are regulated with certain conditions which have not been allegedly complied by the appellants. Importer was given opportunity to make good the deficiency of the documents requisite for complying with the conditions for the purpose. But vide letter dated 30.08.2017, importer/appellant denied the availability of the requisite certificate even with the ex parte. Hence vide Order-in-Original No. 99/2017 dated 17.10.2017 four of the imported cars valued at Rs.1,41,56,704.64 were ordered to be confiscated under Section 111(d) of the Customs Act, 1962 with an option to redeem on payment of Rs.20,00,000/- as redemption fine. Penalty of Rs.10,00,000/- was also imposed under Section 112(a)(i) of the Act. Proof of compliance to conformity of production as required under Rule 126A of Central Motor Vehicle Rules was directed to be submitted within 6 months of the imports. Being aggrieved the appellant is before this Tribunal.
I have heard Shri Anup Kumar Srivastava, learned Advocate for the appellant and Shri V.J. Saharan, learned Authorized Representative for the department.
Learned counsel for the appellant submitted that the European Council Certificate of Conformity issued by Surrey Chamber of Commerce (Place of supply) and Type Approval from M/s Mercedes Benz (manufacturer) from abroad, shows that the vehicles adhered to European Standards. As per Rule 126 of Central Motor Vehicles Rules (CMVR), there has to be a type approval certificate to satisfy that the vehicles comply with Central Motor Vehicles Act and Central Motor Vehicles Rules (CMVR) and meet the relevant technical and safety requirements laid down by the Government. It can be seen that these vehicles have been registered and certified by the Transport Department of Government of NCT of Delhi as complying with all provisions of CMVR. Moreover, these have been given All India Tourist Permits, Insurance and Certificate of Fitness by the Delhi Government. The Certificate of Fitness dated 03.11.2017 specifically states that the vehicle complies with all provisions of Central Motor Vehicle Act and Rules. Therefore, after Delhi Government has certified that these vehicles comply with CMV Act and Rules, the Certificate of Compliance becomes redundant. Thus, it cannot be said that there was violation of import policy. Learned counsel has relied upon the following decisions:
(i) Polixel Security System Pvt. Ltd. Vs. Commissioner of Customs (Import), New Delhi reported as (2023) 5 Centax 167 (Tri.-Del)
(ii) Polyplex Corporation Ltd. Vs. Commissioner of C. Ex., Mumbai reported as 2007 (211) ELT 548 (Tri.-Del)
(iii) Modern Trading & Logistics LLP Vs. Commissioner of Customs (NS-V) reported as (2023) 5 Centax 21 (Tri.-Bom)
(iv) Commissioner of Customs Vs. Ankineedu Manganti reported as 2012 (275) ELT 551 (Ker.)
With these submissions the order under challenge is prayed to be set aside and appeal is prayed to be allowed.
While rebutting these submissions learned Departmental Representative has relied upon the findings in Para 5.3, 5.4 and 5.5 of the impugned order in appeal. No infirmity is impressed. While relying upon the decision of this Tribunal in the case of DEPE Global Shipping Agencies Pvt. Ltd. Vs. Commissioner of Customs (Import), Nhava Sheva reported as 2016 (9) TMI 217 – CESTAT Mumbai, learned Departmental Representative has prayed for dismissal of appeal.
Having heard the rival contentions and perusing the entire records of this appeal, I observe and hold as follows:
5.1 In the present case the appellant is alleged to have failed to comply with provisions of Para 2 of import policy note. Hence four Mercedes Benz cars imported by appellant are alleged to have become restricted goods and thus are ordered confiscation. To adjudicate as to whether these findings are correct, it is necessary need to look into the said provision. As per Para 2(II)(b) and (c) of Import Licensing Note of Chapter 87:
“(b) the vehicle shall confirm that the provisions of the Motor Vehicles Act, 1988 and the rules made thereunder, as applicable, on the date of import
(c) whoever being an importer or dealer in motor vehicles who imports or offers to import a new vehicle into India shall-
(i) at the time of importation have valid certificate of compliance as per the provisions of rule 126 of Central Motor Vehicle Rules (CMVR), 1989, for the vehicle model being imported, issued by any of the testing agencies, specified in the said rule;
(ii) be responsible for all the provisions assigned to the manufacturer as per Rules 122 & 138 of CMVR, 1989 and for issuing form 22, as per provisions of CMVR, 1989; and
(iii) give an undertaking in writing that the proof of compliance to conformity of production as per rule 126A of CMVR shall be submitted within six months of the imports. In case of failure to do so, no further import of new vehicle of that model shall be allowed thereafter.”
5.2 Hon’ble Kerala High Court in the case of Ankineedu Manganti (supra) held that:
“……………….In our view type approval certificate is mainly required to ensure that the vehicle is safe and road worthy for public use and it is to be considered by the registering authority while registering the vehicle and not by the Customs authority when it is imported. Besides this, the assumption of the department that the importer has imported the vehicle which is unfit for use on road is also absurd……….”
5.3 However, it is also clear from the said provision that the certificate as required in terms of Rule 126 CMVR is a mandatory requirement as the word used therein is ‘shall’. Hence I hold that the decision of this Tribunal in Polixel Security System Pvt. Ltd. (supra), as relied upon by appellant, is not applicable to the present case. In the said case exemption from duty was denied invoking such procedural compliance which was not mandatory.
5.4 I further observe it to be an admitted fact that the imported vehicles have been registered and have got certified by the Transport Department of Government of NCT of Delhi as complying with all the provisions of CMVR. Not only this, All India Tourist Permit & Certificates of Fitness have been issued by Delhi Government stating that the vehicle complies with all provision of CMV Act and Rules including Rule 126A of CMVR. To our opinion these certificates by Government authorities of importer’s country amounts to substantive compliance of the impugned Import Licensing Note 2. The Note is therefore held to have been wrongly invoked and so is wrongly invoked the provisions of Foreign Trade Policy for ordering confiscation of imported cars. I draw my support from the decision of this Tribunal, Mumbai bench in the case of Modern Trading & Logistics LLP (supra), wherein it is held that once a vehicle has been registered with the competent authority under Motor Vehicles Act, it is evident that it complies with all stipulations for operation and running on Indian road and thus a Certificate is redundant and superfluous. The relevant portion is reproduced as follows:
“7…………………………………………Furthermore, it is on record that the vehicle has already been registered with the competent authority under the Motor Vehicles Act, 1988. Provisions under the Foreign Trade Policy including licensing norms relevant to chapter 87 in ITC (HS) classification are intended to ensure that the import of any goods, post-clearance, would not be in breach of the essential requirements of law subject to which motor vehicles may be registered for operation on roads. The policy condition is not one incorporated merely for the sake of regulating imports and exports of the country but to ensure that the imported goods are compliant with the regulatory measures, other than that relating to imports and exports, under the municipal laws of the country. As the impugned vehicle has already been registered with the authorities concerned, it would appear that the vehicle complies with all the stipulations for operation and running on Indian roads. This, in effect, is the sum and substance of the ruling of the Hon’ble High Court of Kerala in re Ankineedu Manganti holding that ‘The appeal is filed against the order of the Customs, Excise and Service Tax Appellate Tribunal [2010 (262) ELT 484 (Tribunal)] holding that the confiscation of respondent’s vehicle for non production of type approval certificate is untenable. The learned standing counsel appearing for the appellant contended that Import policy requires production of type approval certificate in respect of every model of vehicle imported. However, we notice from the Tribunal’s order that the vehicle imported is produced by the world renowned vehicle manufacturer Toyota. It is the further finding that same types of vehicles are imported to India on earlier occasions. In our view type approval certificate is mainly required to ensure that the vehicle is safe and road worthy for public use and it is to be considered by the registering authority while registering the vehicle and not by the Customs authority when it is imported. Besides this, the assumption of the department that the importer has imported the vehicle which is unfit for use on road is also absurd. In fact, in a similar case, the Delhi High Court has upheld the view of the Tribunal because the importer cannot be expected to get what is not possible to obtain. We therefore do not find any merit in the appeal filed by the department. Consequently the appeal is dismissed.’
Accordingly, we hold that the inclusion of this condition as necessary for provisional release is redundant and superfluous and we allow this appeal by expunging the said condition as requirement of provisional release.”
5.5 I also observe that it has been acknowledged in the Order-in-Original itself that there is no mis-declaration neither of description nor of classification nor even of quantity and value except the violation of procedural condition of policy. Confiscation of imported vehicle is ordered only because said violation is admitted. But I am of the opinion that substantial benefit of duty exemption shall not be denied on account of mere procedural lapse. As already discussed above the intent of the policy condition as is held to have been violated stands fulfilled in view of the certificate issued by Transport Authority. This particular fact of certificate issued by Delhi Transport Authority distinguishes present case from the case of DEPE Global Shipping Agencies Pvt. Ltd. (supra) as relied upon by learned Department Representative.
Hence in the light of the above discussion, I hold that the order under challenge is not sustainable. Same is hereby set aside. Consequently, the appeal stands allowed.