Import conditions and confiscation: impossible certificate requirement failed, but breach of country-of-manufacture rule sustained.

A customs import condition requiring a Type Approval Certificate/COP from an accredited agency was held unsustainable where the notified country was not covered and a manufacturer's COP was already on record, making compliance impossible; that ground of confiscation and penalty was set aside. By contrast, the separate licensing condition that the vehicle be imported from the country of manufacture was breached because the bill of lading showed shipment from Thailand and no reliable proof of U.S. import was produced; confiscation was therefore upheld on that ground, with only the redemption fine and penalty reduced. The document states the challenge succeeded only in part.

---

---

Issues: (i) Whether confiscation and penalty were unsustainable for want of a Type Approval Certificate/COP under Policy Circular No. 26 dated 9-2-2004, and (ii) whether import of the vehicle from Thailand rather than the country of manufacture attracted confiscation under the Import Licensing Note to Chapter 87 of the ITC (HS) Policy.

Issue (i): Whether confiscation and penalty were unsustainable for want of a Type Approval Certificate/COP under Policy Circular No. 26 dated 9-2-2004.

Analysis: The requirement under Notification No. 34/(RE-2003)/2002-2007 dated 9-2-2004 and the corresponding Policy Circular was to furnish a Type Approval Certificate/COP from an international accredited agency from the country of origin at the time of customs clearance. The country of manufacture in the present case was the U.S.A., but that country was not covered in the notified circular. The record also showed a COP from the manufacturer. In these circumstances, the insistence on a certificate from an accredited agency was treated as impossible of compliance.

Conclusion: The allegation based on Para 2 (II)(c) and Policy Circular No. 26 dated 9-2-2004 was not sustainable and was set aside in favour of the assessee.

Issue (ii): Whether import of the vehicle from Thailand rather than the country of manufacture attracted confiscation under the Import Licensing Note to Chapter 87 of the ITC (HS) Policy.

Analysis: The licensing note required the vehicle to be imported from the country of manufacture. The Bill of Lading showed loading from Thailand and no reliable evidence was produced to establish import from the U.S.A. The Tribunal therefore treated the condition as breached and upheld confiscation on this ground.

Conclusion: Confiscation for breach of Para 2 (II)(a)(iv) was upheld in favour of the Revenue, though the redemption fine and penalty were reduced.

Final Conclusion: The challenge succeeded only to the extent that the alleged violation relating to the Type Approval Certificate/COP was rejected, while confiscation based on import from a country other than the country of manufacture was sustained with reduced fine and penalty.

Ratio Decidendi: Where a notified import condition requires compliance by obtaining a certificate from an accredited agency in a country not covered by the notification, insistence on such compliance is unsustainable; however, breach of a distinct import condition relating to import from the country of manufacture can still justify confiscation and penalty.

---