2018 (1) TMI 1096 - AT - Customs

Import of vehicle - it was alleged that new vehicle imported is not meeting the requirement of Centre Motor Vehicle Rules (CMVR), 1989 - whether the impugned goods under consideration were imported in violation of policy? - Held that - Admittedly, the goods imported are motor vehicle brought in CKD condition for the ease of import and transport. Necessarily, these items are to be used as motor vehicle in India and are governed by Motor Vehicle Rules - When the appellant intended to import motor vehicle the requirement of Motor Vehicle Rules are to be complied. The Policy stipulations clearly make out that various conditions including Type Approval Certificate by the competent authority is a mandatory requirement for any vehicle imported into India. The imported goods are in violation of Import Policy Notes applicable during the relevant time - quantum of penalty reduced as goods have been completely confiscated by the department - appeal allowed in part.

Summary

Issues:
Classification of imported goods under Customs Tariff Act, 1975; Violation of Import Export Policy; Confiscation of imported goods under Customs Act, 1962; Imposition of penalty under Customs Act, 1962.

Classification of Imported Goods:
The appellant imported electrical tricycles without batteries in CKD condition along with spare parts and claimed classification under specific CTH numbers of the Customs Tariff Act, 1975. The assessing authority held that the importation violated the Import Export Policy applicable at the time, specifically noting non-compliance with the Centre Motor Vehicle Rules (CMVR), 1989. The original authority ordered confiscation of the goods under relevant sections of the Customs Act, 1962, and imposed a penalty on the appellant.

Violation of Import Export Policy:
The appellant argued that the goods were declared as motor vehicles for customs purposes due to being in CKD condition and capable of assembly into functional motor vehicles in India. However, the appellant contended that the goods did not qualify as new vehicles under the Policy provisions, as they were to be assembled in India. The Revenue maintained that the imported goods were considered new vehicles under customs classification rules and needed to comply with CMVR for registration in India.

Confiscation of Imported Goods and Penalty Imposition:
The impugned order upheld the original authority's decision regarding the violation of the Import Policy Notes. The tribunal found that the imported goods were in violation of the Import Policy Notes and CMVR requirements, leading to no interference with the impugned order. The penalty imposed on the appellant was reduced to ?2,00,000 considering the complete confiscation of the goods by the department.

In conclusion, the tribunal upheld the decision that the imported goods were in violation of the Import Policy Notes and CMVR requirements, leading to the confiscation of the goods and imposition of a reduced penalty on the appellant.