2022 (12) TMI 669 - AT - Customs

Provisional release of seized goods - allegation import of second hand card in the guise of new car - violation of policy condition (II)(d)(iv) in chapter 87 of the ITC (HS) classification - the mandate to produce the certificate insisted upon as condition for provisional release from among the prescriptions in the licencing notes pertaining to imported vehicles. HELD THAT - 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. The 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 High Court 2010 (5) TMI 654 - KERALA 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. 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.

Issues:
1. Appellant seeking intervention in terms and conditions for provisional release of seized goods.
2. Compliance with policy conditions for import of a second-hand vehicle.
3. Requirement of a type approval certificate for imported vehicles.
4. Interpretation of licensing notes and mandatory conditions for release of goods.
5. Validity of conditions for provisional release beyond the empowerment in Customs Act, 1962.
6. Compliance with Foreign Trade Policy and licensing norms for imported vehicles.
7. Applicability of policy conditions for ensuring compliance with regulatory measures under municipal laws.

Analysis:
1. The appeal sought intervention in the terms and conditions for the provisional release of seized goods, specifically a second-hand vehicle imported by M/s Modern Trading & Logistics LLP. The appellant contested the requirement imposed for provisional release, including payment of duty, submission of bond, and furnishing a bank guarantee, along with compliance with policy conditions related to the vehicle's classification under the Foreign Trade Policy.

2. The issue revolved around the compliance with policy conditions for the import of a second-hand vehicle, which was initially declared as a brand new Toyota Hiace Commuter Van. The appellant highlighted discrepancies in the classification and subsequent seizure under section 110 of the Customs Act, 1962, based on the vehicle's status as second-hand, leading to the need for provisional release subject to specific conditions.

3. A significant contention was the necessity of a type approval certificate for imported vehicles, as per the licensing notes in the ITC (HS) classification appended to the Foreign Trade Policy. The appellant argued that compliance with this requirement had been attempted but faced challenges due to refusals from designated agencies, despite the vehicle being registered under the Motor Vehicles Act, 1988.

4. The Tribunal deliberated on the interpretation of licensing notes and the mandatory conditions for the release of goods, emphasizing the relevance of policy conditions in ensuring compliance with regulatory measures. The Learned Counsel referenced previous judgments to support the argument that the type approval certificate was primarily essential for the vehicle's safety and roadworthiness, factors to be considered during registration rather than importation.

5. The Tribunal examined the validity of conditions for provisional release, emphasizing that circulars or instructions should not exceed the Commissioner of Customs' powers under section 110A of the Customs Act, 1962. The decision highlighted that the conditions imposed for provisional release, beyond the statutory empowerment, were redundant, especially when the imported vehicle had already been registered with the competent authority.

6. In considering compliance with the Foreign Trade Policy and licensing norms for imported vehicles, the Tribunal underscored the importance of ensuring that imported goods met essential requirements under municipal laws. The ruling emphasized that the policy conditions were not merely for regulating imports and exports but aimed at guaranteeing compliance with broader regulatory measures for vehicles operating on Indian roads.

7. The judgment concluded by expunging the redundant condition of producing a type approval certificate as necessary for provisional release, citing previous rulings and emphasizing that the vehicle's registration under the Motor Vehicles Act, 1988, indicated compliance with operational stipulations for running on Indian roads. The decision aligned with the principle that the importer should not be burdened with requirements beyond practical feasibility, ultimately dismissing the appeal filed by the department.

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