Custom, Excise & Service Tax Tribunal
Olympic Exports vs New Delhi Icd Tkd Export on 24 July, 2018
1 A.No.C/51061/18
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. 1
Customs Appeal No. 51061/2018
(Arising out of Order-in-Appeal No. CC(A)CUS/D-II/ICD/TKD/Export/221/2018 dated
15.02.2018 passed by the Commissioner of Customs (Appeals) New Delhi)
DATE OF HEARING : 24.07.2018
DATE OF DECISION : 24.07.2018
M/s Olympic Exports ..... Appellants
(Rep. by Sh. Bipin Garg, Adv.)
VERSUS
CC, New Delhi ..... Respondent
(Rep by Sh. Rakesh Kumar, DR) CORAM : HON'BLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. C.L. MAHAR, MEMBER (TECHNICAL) FINAL ORDER No. 52630/2018 PER C.L. MAHAR:
The present appeal is filed by the Appellants against the Order-in-Appeal No. CC(A)CUS/D-II/ICD/TKD/Export/ 221/2018 dated 15.02.2018 passed by the Commissioner of Customs (Appeals) New Delhi.
2. The brief facts of the case are that, the Appellants imported 57 numbers of electrical tricycle without battery in CKD 2 A.No.C/51061/18 condition along with spare parts. They filed Bill of Entry on 27.12.2013 claiming classification under CTH No. 87039010 of the Customs Tariff Act, 1975. The assessing authority held that the said goods cannot be allowed to be cleared as importation is in violation of Import Export Policy applicable at relevant time. More specifically, it is held that new vehicle imported is not meeting the requirement of Centre Motor Vehicle Rules (CMVR), 1989. Type approval certificate is required to be used in India for any vehicle, which is a mandatory requirement which is not fulfilled in this case. Accordingly, the original authority ordered confiscation of the imported goods under section 111(d) of the Customs Act, 1962 and imposed penalty of Rs. 5 lakh on the Appellants under Section 112 (a) of the Customs Act, 1962. On appeal, the said order was upheld by the impugned order. Being aggrieved, the Appellants have filed the present appeal.
3. The learned Counsel appearing for the Appellants submitted that for customs purpose, the imported goods were declared as motor vehicle. This is because the consignment is in CKD condition which when assembled in India can make a functional motor vehicle. However, such classification of imported goods as 'motor vehicle' is not applicable to the Policy provisions. He drew our attention to the license notes under Chapter 87. Note 2 states that new motor vehicle for the purpose of said Chapter shall mean a vehicle that is not being manufactured/assembled in India. He submitted that in the present case, the components in CKD condition are to be assembled in India and as such, the 3 A.No.C/51061/18 import consignment are not new vehicles. As such, the provisions of Centre Motor Vehicle Rules are not violated and no violation of any other provision has been committed by the Appellants.
4. Shri Rakesh Kumar, learned DR for the Revenue, strongly contested the appeal. He submitted that vehicle(s) imported is considered as new vehicle under Rule 2(a) of 'General Rules for the Interpretation' for customs classification. This position has been admitted. However, the Appellants had tried to make a distinction in Policy stating that the imported goods are not new vehicles. He submitted that such dual approach is not permissible. It is the case of the Revenue that vehicle which is imported in CKD condition is necessarily to be used in India only after registration with competent Motor Vehicle Authority. For such registration, requirement of CMVR are to be fulfilled. The assessing authority cannot ignore the policy condition and Motor Vehicle Regulations which are allied Act, provisions, which the Customs authorities are bound to enforce. Even if, the goods were allowed to be cleared now, the same cannot be registered, as admittedly, requirement of CMVR are not fulfilled.
5. We have heard both the sides and perused the material available on record. The only point of dispute is, whether the impugned goods under consideration were imported in violation of policy. There is no dispute of Customs duty liability. Considering the policy, as mentioned in licensing Notes under 4 A.No.C/51061/18 Chapter 87, we note that the new imported vehicle is defined as not manufactured or assembled in India.
6. View of the Appellants is that, present products will be assembled in India to make a vehicle. We find such narrow view of the issue will not lead to proper appreciation of the licensing condition. 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. There is no dispute on this aspect. When the Appellants 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. We also note that the present vehicle (in CKD condition) was imported having electric capacity of more than 250 watt which as per mandatory requirement is to be registered with the Motor Vehicle Authority.
7. Considering these stipulations of Policy and the conditions of CMVR, we are of the considered view that the imported goods are in violation of Import Policy Notes, applicable during the relevant time. Accordingly, we find no reason to interfere with the impugned order.
5 A.No.C/51061/18
8. We note that counsel pleaded for consideration of reduction of penalty as goods have been completely confiscated by the Department. Considering the plea of the Appellants, we find it fit and proper to reduce the penalty from Rs. 5,00,000/- to Rs.1,00,000/- (Rupees One lakh only). Except for this modification of penalty, the impugned order is upheld.
9. In the result, the appeal filed by the Appellants is partly allowed.
(Dictated & pronounced in the open court) (ANIL CHOUDHARY) MEMBER (JUDICIAL) (C.L. MAHAR) MEMBER (TECHNICAL) Golay