Case Note & Summary
The case involves an appeal by the Commissioner of Customs against an order of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) which allowed the respondent's appeal and expunged a policy condition imposed for provisional release of an imported vehicle. The respondent, Modern Trading & Logistics LLP, imported a Toyota Hiace Commuter Van and filed a bill of entry on 3rd January 2019. The vehicle was seized on 6th February 2019 on suspicion that it was a second-hand vehicle, not new as declared, violating policy condition (1)(II)(d)(iv) of Chapter 87 of the Customs Tariff Act, 1975. The respondent sought provisional release, and the Deputy Commissioner of Customs allowed it subject to conditions including payment of duty and submission of bond and bank guarantee. Aggrieved by the conditions, the respondent appealed to the Commissioner (Appeals), who rejected the appeal. The respondent then appealed to CESTAT, which allowed the appeal by expunging the condition requiring testing by VRDE/ARAI, holding it redundant. The appellant proposed two substantial questions of law: whether CESTAT was right in holding the condition redundant and whether it correctly relied on the Kerala High Court decision in Commissioner of Customs v. Ankineedu Maganti. The High Court noted that the policy condition is to ensure roadworthiness and not just to regulate imports. Since the vehicle was already registered under the Motor Vehicles Act, 1988, it complied with road regulations, making the condition redundant. The court agreed with the Kerala High Court's view and held that no substantial question of law arises. The appeal was dismissed.
Headnote
A) Customs Law - Provisional Release - Policy Condition - Chapter 87 of Customs Tariff Act, 1975 - Condition requiring testing by VRDE/ARAI - The court held that the policy condition is to ensure roadworthiness and not merely to regulate imports; if the vehicle is already registered under the Motor Vehicles Act, 1988, the condition is redundant. (Paras 8-9)
B) Customs Law - Precedent - Reliance on Kerala High Court - Commissioner of Customs v. Ankineedu Maganti [2012 (275) ELT 551 (Ker.)] - The court agreed with the view that the type approval certificate is to ensure compliance with road regulations, not just import control. (Para 8)
Issue of Consideration
Whether the CESTAT was right in holding that the policy condition (1)(II)(d)(iv) of Chapter 87 of the Customs Tariff Act, 1975 requiring testing by VRDE/ARAI is redundant for provisional release of a vehicle that is already registered under the Motor Vehicles Act, 1988.
Final Decision
Appeal dismissed. No substantial question of law arises. CESTAT order upheld.
Law Points
- Policy condition for testing by VRDE/ARAI is not for regulating imports but to ensure roadworthiness
- registration under Motor Vehicles Act
- 1988 indicates compliance
- condition redundant if vehicle already registered.
Case Details
2024 LawText (BOM) (8) 142
Customs Appeal No.18 of 2023 with Interim Application (L) No.14158 of 2023
K.R. Shriram, Jitendra Jain
Mr. Mataprasad Sharma i/b. Ms. Maya Majumdar for appellant/applicant, Mr. Mutahhar Khan a/w. Mr. Kenneth Martin i/b. Advani Law LLP for respondent
Commissioner of Customs, JNCH, Nhava Sheva-V JNPT, Customs House, District- Raigad, Maharashtra-400 707
Modern Trading & Logistics LLP, Shop No.4, Patel Compound Body Lane, Opp. Tardeo RTO, Mumbai Central, Mumbai 400 034
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Nature of Litigation
Appeal by Commissioner of Customs against CESTAT order expunging a policy condition for provisional release of an imported vehicle.
Remedy Sought
Appellant sought to set aside CESTAT order and restore the condition requiring testing by VRDE/ARAI for provisional release.
Filing Reason
Appellant aggrieved by CESTAT order dated 7th December 2022 which allowed respondent's appeal and expunged the policy condition (1)(II)(d)(iv) of Chapter 87 of the Customs Tariff Act, 1975.
Previous Decisions
Deputy Commissioner of Customs allowed provisional release subject to conditions; Commissioner (Appeals) rejected respondent's appeal; CESTAT allowed appeal expunging the condition.
Issues
Whether the CESTAT was right in holding that the policy condition (1)(II)(d)(iv) of Chapter 87 of the Customs Tariff Act, 1975 requiring testing by VRDE/ARAI is redundant for provisional release of a vehicle that is already registered under the Motor Vehicles Act, 1988.
Whether the CESTAT correctly relied on the Kerala High Court decision in Commissioner of Customs v. Ankineedu Maganti.
Submissions/Arguments
Appellant argued that the policy condition is mandatory and CESTAT erred in expunging it.
Respondent argued that the vehicle was already registered under the Motor Vehicles Act, 1988, indicating compliance with roadworthiness, making the condition redundant.
Ratio Decidendi
The policy condition requiring testing by VRDE/ARAI is to ensure roadworthiness and not merely to regulate imports. If the vehicle is already registered under the Motor Vehicles Act, 1988, it complies with road regulations, making the condition redundant. The CESTAT correctly followed the Kerala High Court decision.
Judgment Excerpts
The Court held that the type of approval certificate mentioned in the policy condition of Chapter 87 to be issued by VRDE or ARAI was only to ensure that the import of any goods, post clearance, would not be in breach of the essential requirements of law subject to which motor vehicles will be registered for operation on roads.
If the vehicle did not comply with the stipulations for operation and running on Indian roads, certainly the vehicle would not have been registered under the Motor Vehicles Act, 1988.
Procedural History
Respondent filed bill of entry on 3rd January 2019; vehicle seized on 6th February 2019; respondent sought provisional release; Deputy Commissioner allowed release subject to conditions on 15th February 2019; respondent appealed to Commissioner (Appeals) which rejected appeal on 15th May 2019; respondent appealed to CESTAT which allowed appeal on 7th December 2022; appellant filed present appeal in High Court on 14th August 2024.
Acts & Sections
- Customs Act, 1962: Section 111(d)
- Customs Tariff Act, 1975: Chapter 87, policy condition (1)(II)(d)(iv)
- Motor Vehicles Act, 1988:
