2024 (4) TMI 377 - AT - Customs

Confiscation - imported four Mercedes Benz cars - Failure to comply with provisions of Para 2 of Import Licensing Note of Chapter 87 - restricted goods or not - HELD THAT - It is 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. 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. It is also observed 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 it is opined that substantial benefit of duty exemption shall not be denied on account of mere procedural lapse. As already discussed, the intent of the policy condition as is held to have been violated stands fulfilled in view of the certificate issued by Transport Authority. The order under challenge is not sustainable - Appeal allowed.

Summary

Issues involved:
The issues involved in this case include the classification of imported goods, compliance with import regulations, confiscation of goods under Section 111(d) of the Customs Act, imposition of penalties, and the requirement of type approval certificates for imported vehicles.

Classification of Imported Goods:
The appellant imported four "New Mercedes Benz V220D Sport Extra Long Auto" vehicles classified under CTH No. 87032391 from the United Kingdom. The goods were examined to verify compliance with import regulations and it was found that the vehicles had an Engine Capacity of 2143 CC. The appellant claimed Import policy exemption under Para 7 of Import Licencing Note to Chapter 87, which required a type approval certificate. However, the appellant failed to provide the necessary documents for compliance.

Confiscation of Goods and Imposition of Penalties:
The Department formed an opinion that the imported cars were liable for confiscation under Section 111(d) of the Customs Act as they were considered restricted goods under the Foreign Trade Policy due to non-compliance with import conditions. The appellant denied having the requisite certificate, leading to the confiscation of the cars valued at Rs.1,41,56,704.64. A redemption fine of Rs.20,00,000/- and a penalty of Rs.10,00,000/- were imposed. The appellant challenged this decision before the Tribunal.

Compliance with Import Regulations:
The appellant argued that the vehicles complied with European Standards and had been certified by the Transport Department of the Government of NCT of Delhi as meeting all provisions of the Central Motor Vehicles Act and Rules. The appellant contended that the Certificate of Compliance was redundant after such certification, and there was no violation of import policy. The appellant cited relevant case law to support their argument.

Decision and Rationale:
After considering the arguments, the Tribunal analyzed the import policy notes and the requirement of type approval certificates under the Central Motor Vehicle Rules. The Tribunal noted that the vehicles had been registered and certified by the Delhi Government, indicating compliance with all relevant provisions. The Tribunal held that the confiscation based on procedural lapses was not justified, as the intent of the policy condition had been fulfilled. The Tribunal set aside the order of confiscation and allowed the appeal.

Conclusion:
The Tribunal ruled in favor of the appellant, setting aside the order of confiscation and penalties imposed. The Tribunal found that the vehicles' registration and certification by the Delhi Government demonstrated compliance with the necessary provisions, rendering the confiscation based on procedural lapses unjustified.