whether the imported goods be confiscated if appellant fails to comply with the conditions of notification?

PJ/Case Law/2016-2017/3450

Case - SHIPPING AGENCIES DEPE GLOBAL P. LTD. VersusC.C. (IMPORT), NHAVA SHEVA
Citation- 2017 (345) E.L.T. 248 (Tri. - Mumbai)
Issue-  whether the imported goods be confiscated if appellant fails to comply with the conditions of notification?
Brief Facts–The appellant, M/s. Depe Global Shipping Agencies Pvt. Ltd. imported a car for use by the company. The import of car was restricted as per the relevant import export policy and not permitted except against a licence or in accordance with the public notice issued in this behalf. As the importer was unable to comply with the said condition and as per their request the car was provisionally released on ITC Bond pending compliance with the conditions of the Notification No. 4/97-2002, dated 31-3-2001 by the department of commerce. The appellant failed to satisfy the conditions of the said notification and therefore, the car was confiscated and an option to redeem the same on payment of fine under Section 125 of the Customs Act was given. A penalty was also imposed on the appellant. Aggrieved by this order, the appellants are in appeal before the Tribunal.
Appellant’s Contention- The learned Counsel for the appellant argued that the Notification No. 4/97-2002, dated 31-3-2001 was not applicable to them as the same was intended for the manufacture of cars. He pointed out that the Clause 5(II)(c) of the said notification required the following from the importer or dealer of motor vehicles :
“Whoever being an importer or dealer in motor vehicles who imports or offers to import a new vehicle into India shall, -
(i)         at the time of importation have valid certificate of compliance as per the provisions of Rule 126 of Central Motor Vehicle Rules (CMVR), 1989, for the vehicle model being imported issued by any of the testing agencies, specified in the said rule;
(ii)        be responsible for all the provisions assigned to the manufacturer as per Rules 122 & 138 of CMVR, 1989 and for issuing Form 22 as per provisions of CMVR 1989; and
(iii)       give an undertaking in writing that the proof of compliance to conformity of production as per rule 126A of CMVR shall be submitted within six months of the imports. In case of failure to do so, no further import of new vehicle of that model shall be allowed thereafter.
He further argued that these conditions are meant for the manufacturers of motor vehicles who intend to import the prototype of motor vehicles. He argued that these conditions cannot be complied with individual who intended to import for personal use. He further pointed out that Notification No. 31/97-2002, dated 14-9-2001 clarified as follows :
“2. The conditions relating to import of vehicles [as classified under Chapter 87 of ITC (HS) Classifications of Export and Import items, 1992-2002] as per Notification No. 4 (RE-2001)/97-2002, dated 31-3-2001, shall not be applicable on imports made under the provisions of aforementioned Public Notice No. 3 dated 31-3-2000. However, these imports shall be subject to the condition that, the vehicle should have right hand steering and controls (applicable on vehicles other than 2 and 3 wheelers).
3. The import of vehicles [as classified under Chapter 87 of ITC (HS) Classifications of Export and Import Items, 1997-2002] by Foreign Diplomats and Other Privileged Persons in this category, who are exempt from payment of customs duty shall be exempt from all the conditions of Notification No. 4(RE-2001)/97-2002, dated 31-3-2001. However, such imported vehicles cannot be sold in India except to another diplomat or privileged person and are compulsorily required to be re-exported. This exemption shall be applicable on all imports made subsequent to 31-3-2001”.
In view of the above, he argued that there has been no violation of ITC and therefore, the car could not have been confiscated.
Respondent’s Contention- The learned AR for the Revenue argued that the notice clearly pointed out that the import of car was restricted under import-export policy. He pointed out that the show cause notice clearly stated that the import can be allowed against a licence or in accordance with the public notice issued in this behalf. (Notification No. 4/97-2002, dated 31-3-2001). The appellant chose to produce the certificate required under Notification No. 4/97-2002 and gave the bond accordingly.
He argued that it was open to the appellant to approach the Ministry of Commerce for a licence to import car. In these conditions they cannot claim that the Notification No. 4/97-2002 was not applicable to them.

Reasoning of Judgment –after going through rival submissions they held that the import of car was restricted. Anyone wishing to import a car has alternate route. The first route was to obtain a licence from the Ministry of Commerce and the 2nd route was to fulfil the conditions of Notification No. 4/97-2002. The appellant chose the second route and had failed to produce necessary certificate to avail the benefit of said notification. In these circumstances, the import of car was in violation of import-export policy. The impugned order rightly confiscated the car and imposed penalty. The appeal was therefore, dismissed.

Decision:-Appeal dismissed.
Comment – The gist of the case was that to import a car under Notification No. 4/97-2002, all the conditions are to comply with. The appellant herein failed to produce necessary certificate to avail the benefit of said notification and hence the import was considered to be in violation of import-export policy. Considering same the tribunal held confiscation and imposition of penalty to be correct.
Prepared by- NEHA

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PJ/Case Law/2016-2017/3450

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