2008 (10) TMI 221 - AT - Customs

Import of Car Exemption Notification 21/2002 - The appellants imported a new Toyota Land Cruiser car through Cochin Port. During the relevant period the Cochin Port is not one of the designated ports for import of new car. Though it is a new car according to the appellants its registration was done abroad prior to its export into India. Revenue proceeded against the appellants on grounds of violation of (i) EXIM Policy and (2) Customs Notification. Held that - benefit of Customs Notification for import of new car cannot be denied simply on the basis of its prior registration before shipment to India. The Board s Circular has also clarified the point. It is also seen from the impugned order that the car was registered in October 2007 and the shipment was made in January 2008. Further from the Examination Report it is seen that the car has run only for 16 km. From this it is very clear that the registration is only a formality car can not be held as used car Exemption allowed penalty and fine reduced.

Summary

Issues:
1. Violation of EXIM Policy by importing a new car through a non-designated port.
2. Interpretation of Customs Notification regarding registration of new cars prior to importation.

Detailed Analysis:
Issue 1: The appellants imported a new Toyota Land Cruiser car through Cochin Port, which was not a designated port for new car imports during the relevant period. The Revenue alleged violations of the EXIM Policy and Customs Notification. The Commissioner held the car liable for confiscation and imposed fines and penalties under the Customs Act. The advocate acknowledged the violation of the EXIM Policy but argued against the Customs Notification violation, citing a Ministry clarification that registration as a technical formality should not negate the Notification's benefit.

Issue 2: The Customs Notification in question specified that a new car should not be registered anywhere prior to importation to qualify for benefits. The Board clarified that temporary registrations for transportation purposes should not affect the Notification's benefits. The Tribunal considered the timing of registration in comparison to the shipment date and the purpose of registration. They concluded that the car's registration before importation was a mere formality, not indicative of it being a used car, thereby upholding the benefit of the Customs Notification.

Judicial Precedents: The advocate distinguished a previous Tribunal decision from 2002, emphasizing the availability of the Board's clarification and the change in policy. Additionally, the advocate referenced another case to argue for a reduction in fines and penalties for EXIM Policy violations, which the Tribunal partially accepted by lowering the imposed amounts based on the cited precedent.

Conclusion: The Tribunal ruled in favor of the appellant, allowing the appeal partially and granting consequential relief. They held that the Customs Notification benefit should not be denied based solely on the car's prior registration, considering it a technical formality. The Tribunal also reduced the fines and penalties imposed for the EXIM Policy violation in line with the cited precedent.