2015 (1) TMI 794 - AT - Customs

Tribunal reclassifies Chrysler 300C Sedan as transport vehicle, criticizes Revenue negligence.

MANN TOURIST TRANSPORT SERVICE (P) LTD Versus COMMISSIONER OF CUSTOMS (IMPORT), NHAVA SHEVA

The Tribunal set aside the Commissioner of Customs' classification of a Chrysler 300C Sedan RHD car under CTH 8703 and allowed the appellant's appeal for ... Classification of goods - import of Chrysler 300C Sedan RHD car from M/s Paramount Auto Exports Inc., USA, a dealer for Chrysler Vehicles and engaged in converting vehicles into limousines - Classification under CTH 8702 1019 or under CTH 8703 - Held that:- Tribunal had clearly directed the Revenue to get the vehicle examined and obtain expert opinion from agencies such as ARAI/VRDE with regard to the seating capacity and determine the classification issue. When the said order was passed, the vehicle was very in the possession of the department and they could have got the necessary examination/verification done, which they failed to do. Even after the apex court decision, before allowing release of the vehicle, the said action could have been undertaken. This shows gross negligence and complete disregard on the part of the department to the directions given by this Tribunal. Thus the entire blame for the inaction lies squarely on the department. In the letter dated 19-11-2012, ARAI has not given any opinion on the seating capacity of the impugned vehicle. They have merely observed that the vehicle was originally designed for seating 5 persons. However, they advised the department to verify from the concerned vehicle manufacturer about the type approval certification issued from the country of origin for the above vehicle with modified seating capacity. This direction has also not been complied with. As regards the ARAI's observation that – 'under provisions of Motor Vehicles Act, any modification/alteration to the original vehicle are not permitted under section 52 of the Motor Vehicle Act', this observation is quite irrelevant as the modification has been undertaken abroad before importation and the Indian Motor Vehicle Act does not have any extra-territorial jurisdiction. It is a well-settled position in law that imported goods have to be assessed to duty in the form in which they are presented. In the facts of the present case, the vehicle as imported has been presented with a seating capacity of 12. Further, the regional transport authorities at Delhi has registered the vehicle as having a seating capacity of 10. The certificate of fitness and the tourist permit for the vehicle issued by the RTO authorities at Delhi also confirm this fact - impugned order is not sustainable in law and the claim of the appellant that the vehicle merits classification under CTH 8702 has to be allowed in the light of the registration certificate, fitness certificate and the tourist permit granted to the appellant by the RTO authorities in Delhi - Decided in favour of assesse. Issues: Classification of imported vehicle under CTH 8702 or CTH 8703Classification Issue:The appeal challenged the classification of a Chrysler 300C Sedan RHD car imported by the appellant, initially classified under CTH 8703 23 99 by the Commissioner of Customs. The appellant claimed classification under CTH 87021019 as a 'Motor vehicle for the transport of 10 or more persons, including the driver.' The Tribunal's previous order remanded the classification issue to the Commissioner for a fresh decision based on expert opinion regarding the designed seating capacity of the vehicle.Expert Opinion and Negligence of Revenue:The Tribunal directed the Revenue to obtain expert opinion from agencies like ARAI and VRDE to determine the seating capacity and classification. However, the Revenue failed to comply with this direction even after the apex court's decision and the provisional release of the vehicle. ARAI's observation that the vehicle was originally designed for 5 persons was not a conclusive opinion on the seating capacity. The failure to verify the modified seating capacity from the vehicle manufacturer abroad was highlighted, indicating negligence on the part of the Revenue.Vehicle Registration and Authorities' Certifications:The appellant presented evidence post-importation, including the vehicle's registration certificate, fitness certificate, and tourist permit issued by the RTO authorities in Delhi, all confirming a seating capacity of 10 persons. The registration certificate explicitly stated the seating capacity as 10, aligning with the appellant's claim for classification under CTH 8702. The modifications made abroad before importation were deemed irrelevant under the Indian Motor Vehicle Act, and the vehicle's presentation with a seating capacity of 12 at importation was considered significant.Legal Precedents and Decision:The appellant cited legal precedents, including a High Court decision and a Tribunal case, to support their argument that vehicles with a seating capacity of 10 or more should be classified under CTH 8702. The Tribunal found the impugned order unsustainable in law due to the negligence of the Revenue, the evidence provided by the appellant, and the relevant legal principles. Consequently, the Tribunal set aside the impugned order and allowed the appeal regarding the classification of the vehicle under CTH 8702.This detailed analysis of the judgment highlights the issues surrounding the classification of the imported vehicle, the failure of the Revenue to obtain expert opinion as directed, the significance of post-importation evidence, the legal precedents cited, and the final decision in favor of the appellant's classification claim under CTH 8702.