By TIOL News Service

MUMBAI, SEPT 01, 2016: THE appellant 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, 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 31/03/2001 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.

The appellant is before the Tribunal. The year is 2005.

The matter was heard recently.

It is submitted that the clause 5(II)(c) of the notification 4/97-2002 dated 31/03/2001 mandated the following:

"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."

Inasmuch the appellant submitted that these conditions are meant for the manufacturers of motor vehicles who intend to import the prototype of motor vehicles and cannot be complied by individuals who intended to import motor vehicles for personal use.

It is further submitted that Notification No. 31/97-2002 dated 14/09/2001 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)/97-02 dated 31/03/2001, shall not be applicable on imports made under the provisions of aforementioned Public Notice No. 3 dated 31/03/2000. However, these imports shall be subject to the condition that, the vehicle should have right 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)/97-02 dated 31/03/2001. 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 31/03/2001."

It was, therefore, submitted that there has been no violation of ITC and, therefore, the car should not have been confiscated.

The AR argued that the import of car is restricted under import export policy; that it was open to the appellant to approach the Ministry of Commerce for a licence to import car; that they cannot claim that the Notification No. 4/97-02 is not applicable to them.

The Bench observed -

"4. …We find that the import of car is restricted. Anyone wishing to import a car has alternate route. The first route is to obtain a licence from the ministry of commerce and the 2 nd route is to fulfill the conditions of Notification No. 4/97-02. The appellant chose the second route and have failed to produce necessary certificate to avail the benefit of said notification. In these circumstances, the import of car is in violation of import export policy. The impugned order rightly confiscated the car and imposed penalty…."

The appeal was dismissed.

(See 2016-TIOL-2271-CESTAT-MUM )