2006 (1) TMI 126 - AT - Customs

Tribunal Rules in Favor of Appellants, Releases Bank Guarantee

METRO PALACE HOTEL PVT. LTD. Versus COMMR. OF CUS. (IMPORTS), MUMBAI-Il

The Tribunal ruled in favor of the appellants, setting aside the impugned order and releasing the Bank Guarantee and Bond. It upheld the exemption granted ... Import of vehicle (BMW) under EPCG licence issued by DGFT – license issued by DGFT for import of particular model of car by homologus condition under not. no. 34/04 cannot be questioned by custom authorities – confiscation not justified - importer not informed that their vehicle is first vehicle of particular model – homologation certificate cannot be insisted from appellants - Bank Guarantee and Bond shall be released and discharged – appeal allowed Issues:- Interpretation of EPCG Licence conditions- Enforcement of Bank Guarantee and Bond- Scope of DGFT's authority in issuing licences- Compliance with CMVR regulations- Monitoring of imports by customs authoritiesInterpretation of EPCG Licence conditions:The appeal involved the interpretation of the EPCG Licence conditions in relation to the import of a vehicle. The appellants argued that the licence exempted them from certain restrictions under the EXIM Policy, and the DGFT had the authority to waive conditions of import and export. The Tribunal found merit in the appellants' contentions, emphasizing that the DGFT's powers should not be challenged by Customs authorities. The Tribunal also highlighted a case where a similar waiver was granted by the DGFT, supporting the appellants' position.Enforcement of Bank Guarantee and Bond:The Customs authorities sought to enforce the Bank Guarantee and Bond due to non-fulfillment of conditions within the stipulated timeframe. However, the Tribunal ruled in favor of the appellants, stating that the Bank Guarantee and Bond were executed for specific purposes related to export obligations and customs conditions. The Tribunal noted that attempting to enforce the Bank Guarantee contravened instructions from the Central Board of Excise & Customs, and therefore, set aside the confiscation of the vehicle, redemption fine, and penalty imposed on the appellants.Scope of DGFT's authority in issuing licences:The Tribunal analyzed the scope of the DGFT's authority in issuing licences and found that the licence exempted the importers from certain restrictions under the EXIM Policy. It emphasized that Customs authorities should not question the licence issued by the DGFT for import purposes, especially when waivers had been granted by the DGFT in similar cases. The Tribunal upheld the exemption granted by the DGFT and set aside the impugned order of the Commissioner of Customs.Compliance with CMVR regulations:The Tribunal examined the compliance of the import with Central Motor Vehicles Rules (CMVR) regulations. It referenced a relevant case law and concluded that the homologation certificate could not be insisted upon from the importers. The Tribunal highlighted the duty of Customs authorities to monitor imports and ensure compliance with CMVR regulations, especially regarding the first import of a specific model.Monitoring of imports by customs authorities:The Tribunal criticized the Customs authorities for failing to monitor imports effectively and ensure compliance with CMVR regulations. It noted that the onus should not be placed solely on the importer, especially when the importer is the end user and not the manufacturer or dealer of the vehicles. The Tribunal emphasized the importance of Customs authorities fulfilling their duty to monitor imports and verify compliance with regulations to avoid errors in enforcement actions.In conclusion, the Tribunal set aside the impugned order, released the Bank Guarantee and Bond, and ruled in favor of the appellants based on the interpretation of the EPCG Licence conditions, enforcement of Bank Guarantee and Bond, scope of DGFT's authority, compliance with CMVR regulations, and monitoring of imports by customs authorities.