2009 (5) TMI 796 - AT - Customs

Summary

Issues:
1. Import of new motor vehicles without required compliance certificate.
2. Interpretation of Rule 126 of Central Motor Vehicle Rules, 1989.
3. Applicability of Import Licensing Note conditions.

Analysis:
1. The main issue in this case revolves around the import of two new cars without the necessary compliance certificate, as mandated by the Import Licensing Note of Chapter 87. The Department alleged that the appellants failed to submit the required certificate of compliance, leading to a violation of the import conditions.

2. The interpretation of Rule 126 of the Central Motor Vehicle Rules, 1989 is crucial in determining the obligations of importers regarding compliance certificates. The appellants argued that since they were not the manufacturers of the vehicles, they were not obligated to provide the compliance certificate as per Rule 126. However, the Department contended that the Import Licensing Note required importers to possess a valid compliance certificate, irrespective of their role as manufacturers.

3. The tribunal analyzed the provisions of Rule 126 and the Import Licensing Note to ascertain the responsibilities of importers regarding compliance certificates. It was observed that the Import Licensing Note encompassed both individuals and manufacturers as importers, emphasizing the need for compliance with the specified rules. Consequently, the tribunal concluded that the appellants had indeed contravened the import conditions by failing to adhere to the compliance certificate requirement.

4. Additionally, the tribunal considered the purpose behind the import of the vehicles, noting that they were intended for display in a showroom for brand promotion rather than for sale. As a result, the tribunal deemed the redemption fine and penalties imposed by the adjudicating authority to be excessive. Subsequently, the tribunal decided to reduce the redemption fine and penalties significantly, providing relief to the appellants under the Customs Act, 1962.

In conclusion, the judgment highlighted the importance of complying with import conditions, specifically regarding the submission of compliance certificates as per the relevant rules and notes. The tribunal's decision to reduce the penalties reflects a balanced approach considering the circumstances surrounding the import of the vehicles for promotional purposes.