Custom, Excise & Service Tax Tribunal
Nagarjuna Construction Co. Ltd vs Commissioner Of Customs (Imports) on 26 June, 2012
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI COURT No. II Appln. No.C/S/676/12 APPEAL No.C/256/12 (Arising out of Order-in-Original No.CAO No.2/2011/CAC/CC(I)/ APS/Gr.VB dated 30/12/2011 passed by Commissioner of Customs (Imports), Mumbai) For approval and signature: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.R. Chandrasekharan, Member (Technical) 1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether Their Lordships wish to see the fair copy :Seen of the Order? 4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================
Nagarjuna Construction Co. Ltd., Appellant Vs. Commissioner of Customs (Imports) Respondent Mumbai Appearance:
Shri.S.Jaikumar, Advocate for appellant Ms.D.M.Durando, Dy. Comm. (AR), for respondent CORAM:
Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.R.Chandrasekharan, Member (Technical) Date of Hearing : 26/06/2012 Date of Decision : 26/06/2012 ORDER NO Per: P. R. Chandrasekharan
1. The appeal is directed against order-in-original No. 2/2011/CAC/CC(I)/APS/GR.VB dated 30/12/2011 passed by the Commissioner of Customs (Imports), New Custom House, Mumbai.
2. The facts relevant for consideration in this case are as follows. The appellant, M/s Nagarjuna Construction Company Ltd., Medapalli Open Cast Project, Karimnagar District, Andhra Pradesh (appellant importer in short) filed a B/E No. 960349 dated 30-7-2010 for the import of Off Road Refuelling Truck ATZ with accessories classifying the goods under CTH 8704 declaring an assessable value of Rs.94,83,900/-. On examination of the goods, the department was of the view that the vehicle under importation is not off road vehicles as claimed by the importer and therefore, the licensing notes of Chapter 87 will apply. Since the vehicle under import was left hand driven and type approval certificate/ARAI certificate as per the conditions of the licensing notes from notified agencies was not produced, The Commissioner of Customs passed an order dated 24-9-2010 confiscating the goods under section 111(d) of the Customs Act, 1962. However, he gave an option to the importer to re-export the goods within one month on payment of a penalty of Rs.3 lakhs imposed under section 112(a) of the said Customs Act. The appellant preferred an appeal against the said order before this Tribunal and submitted that subsequent to the passing of the order dated 24-9-2010, they have obtained a relaxation from the Director General of Foreign Trade vide letters dated 24-3-2011 and 29-7-2011 from licensing condition No. 2(II)(a)(ii) and therefore, the order of the department confiscating the goods are not sustainable in law. Since the letters from the DGFT was not produced before the adjudicating authority, this Tribunal vide order No.A/331 to 332/11/CSTB/C.I remanded the case back to the adjudicating authority to decide the issue afresh after taking into account the letters issued by the DGFT. In pursuance to the said direction of this Tribunal, the impugned order has been passed.
2.1 In the impugned order also the goods have been confiscated under section 111(d) of the Customs Act with an option to re-export the same within one month on payment of a redemption fine of Rs.5 lakhs and payment of a penalty of Rs.3 lakhs under section 112(a) ibid. The grounds adduced in the impugned order is that the type approval certificate produced by the appellant in the instant case is from Russian State Standards (Gost R) Certification System which is not listed as a notified agency vide Policy Circular No. 26 dated 9-2-2004 for imports from Russia and the vehicle under importation does not satisfy condition 2(II)(a) (i) and (iii) of the licensing notes and hence the goods are liable to confiscation under section 111(d).
3. The ld. Advocate for the appellant makes the following submissions:-
3.1 The type approval certificate has been issued by the Federal Agency for Technical Regulation and Metrology of Russia which is the Soviet Government Agency responsible for standardization, metrology and quality management. The Policy circular No. 26 dated 9-6-2004 has notified Gossstandart Rossii (Committee of the Russian Federation for Standardisation, Metrology and Certification) as the agency for imports from the Russian Federation. The said federation, established in 1925 was renamed a number of times and merged with Gossstandart Rossii and to-day its name is Federal Agency on Technical Regulation and Metrology. In support of this contention, they have produced the write up available in Wikipedia which gives the history of the said organization. Therefore, it is incorrect to say that the certificate has been issued by an agency not specified in the policy circular.
3.2 As regards the finding of the adjudicating authority that the vehicle is not off road vehicle type, the type approval certificate issued by the agency categorises the vehicle as N3G. As per European Commission Directive 2001/116/EC Category N refers to Motor Vehicles with at least 4 wheels designed and constructed for the carriage of goods and N3 refers to Large Goods vehicles constructed for the carriage of goods and having a maximum mass exceeding 12 tonnes. Symbol G refers to Off-road vehicles. Thus the vehicles under importation are off-road vehicles.
3.3 The vehicles are to be used in Singareni Collieries in Andhra Pradesh for mining purposes and it is not for use as transport vehicles in public roads. They have also produced certificate dated 6-1-2009 issued by the Singareni Colliery Company Ltd. (A Government Company) in support of the above. Since the vehicles are to be used in mines, they do not violate the policy provisions 2(II)(a) (i) which relates to having a speedometer indicating the speed in Kilometers per hour and (II)(a)(iii) relating to having photometry of the headlamps to suit keep left traffic. In as much as the DGFT vide letter dated 24-3-2011 has already relaxed the condition relating to para 2(II)(a)(ii) relating to right hand steering and controls subject to the appellant not plying the vehicle on public roads and using the vehicle on the project site, the same conditions can be imposed in respect of condition (II) (a)(i) and (II) (a) (iii) also.
3.4. Accordingly he pleads for releasing the vehicles on payment of appropriate duty of customs amounting to Rs.25,60,691/- which they have already discharged on 6-8-2010 at the time of assessment of bill of entry, so that they can use the vehicles in the mines.
4. The ld. Dy. Commissioner (AR) appearing for the Revenue re-iterates the findings of the adjudicating authority.
5. We have carefully considered the rival submissions.
5.1 As regards the finding of the ld. Adjudicating authority that the type approval certificate has not been issued by the notified agency, this finding is completely wrong. A visit to the website of the agency shows that it was set up in September, 1925 and the Committee of the Russian Federation for Standardization Metrology and Certification was transformed in to the Federal Agency on Technical Regulation and Metrology (GOST R) in May, 2004, on the basis of a Statute approved by Decree no. 294 dated 17th June, 2004 of the Russian Federation Government. The address of the organization given in the website also tallies that specified in the policy circular of the DGFT. Accordingly, we hold that the Type Approval Certificate produced by the appellant is from the accredited agency notified in the policy circular. If the ld. Commissioner had any doubt about the organization, he should have verified the same with the DGFT who issued the policy circular. Suffice to say that the casual manner in which the matter has been examined does not befit the status of an adjudicating authority.
5.2 The next issue for consideration relates to the category of vehicle under importation. Is it an off road vehicle as claimed by the appellant or on road vehicle as claimed by the department? As per the type approval certificate, the category is N3G. As per the European Commission Directive 2001/116/EC, it refers to Off-road vehicles with a maximum mass exceeding 12 tonnes for carriage of goods. Thus as per the type approval certificate read with the EC directives, produced before us by the appellant, the vehicle is an off the road vehicle and not on road vehicle as concluded by the adjudicating authority. These documents do not appear to have been examined by the adjudicating authority at all. Thus the conclusion drawn by the adjudicating authority that the vehicle is an on road vehicle is neither supported by any expert opinion nor based on any documentary evidence. In matters involving interpretation of technical specifications, it is always advisable to seek expert advice as the customs might not have the technical expertise to come to authoritative conclusions. The matter could have been easily got verified from the Automotive Research Association of India, Pune, (ARAI), a Govt. of India Research Organization under the Ministry of Heavy Industry.
5.3 The appellant has already produced a relaxation certificate from the DGFT with regard to the right hand steering and controls specified in licensing note (2) (II) (a) (ii). The only question left for consideration is whether there is violation of licensing condition (2) (II) (a)(i) regarding the speedometer indicating the speed in kilometer per hour and 2 (II) (a) (iii) regarding photometry of the headlamps to suit keep left traffic and if so, is the violation so serious as to warrant refusal of permission to clear the goods for home consumption. Both the above conditions, by their nature, seems to apply to on the road vehicles. The vehicle under importation being off the road in nature as per the type approval certificate produced by the appellant, in our view, the violation, if any, does not warrant refusal of permission for home consumption as the same is technical in nature rather than a substantive one. The clearance for home consumption can be subject to the same condition that the vehicle is permitted to be used in the project site only and would not ply on the public roads, as stipulated by the DGFT while relaxing the conditions relating to right hand steering and controls. Thus the matter needs to go back to the adjudicating authority for re-consideration of the issues afresh in the light of what has been discussed above. The adjudicating authority could also consult the licensing authority and/or ARAI, Pune, if necessary. As the vehicle has been imported almost two years back and still lies in customs custody, in the interest of justice, we direct the adjudicating authority to decide the matter expeditiously, preferably within 30 days of the receipt of this order.
6. Accordingly, we set aside the impugned order and remand the matter back to the adjudicating authority for fresh consideration of the issues as discussed above after giving a reasonable opportunity to the appellant of being heard. The appeal is allowed by way of remand.
(Operative portion of the order pronounced in the Court) (Ashok Jindal) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) pj 1 9