Four imported Mercedes Benz cars avoid confiscation despite Import Licensing Note Para 2 violation as transport certificates show substantial compliance

CESTAT New Delhi allowed appeal against confiscation of four imported Mercedes Benz cars. The appellant failed to comply with Para 2 of Import Licensing Note of Chapter 87. However, the vehicles were registered and certified by Delhi Transport Department as complying with CMVR provisions, and received All India Tourist Permit Certificates of Fitness. CESTAT held these government certificates constituted substantive compliance with the Import Licensing Note. The order acknowledged no mis-declaration of description, classification, quantity, or value - only procedural violation. The tribunal ruled substantial duty exemption benefits should not be denied for mere procedural lapses when policy intent was fulfilled through transport authority certification.

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Issues involved:
The issues involved in this case include the classification of imported goods, compliance with import regulations, confiscation of goods under Section 111(d) of the Customs Act, imposition of penalties, and the requirement of type approval certificates for imported vehicles.

Classification of Imported Goods:
The appellant imported four "New Mercedes Benz V220D Sport Extra Long Auto" vehicles classified under CTH No. 87032391 from the United Kingdom. The goods were examined to verify compliance with import regulations and it was found that the vehicles had an Engine Capacity of 2143 CC. The appellant claimed Import policy exemption under Para 7 of Import Licencing Note to Chapter 87, which required a type approval certificate. However, the appellant failed to provide the necessary documents for compliance.

Confiscation of Goods and Imposition of Penalties:
The Department formed an opinion that the imported cars were liable for confiscation under Section 111(d) of the Customs Act as they were considered restricted goods under the Foreign Trade Policy due to non-compliance with import conditions. The appellant denied having the requisite certificate, leading to the confiscation of the cars valued at Rs.1,41,56,704.64. A redemption fine of Rs.20,00,000/- and a penalty of Rs.10,00,000/- were imposed. The appellant challenged this decision before the Tribunal.

Compliance with Import Regulations:
The appellant argued that the vehicles complied with European Standards and had been certified by the Transport Department of the Government of NCT of Delhi as meeting all provisions of the Central Motor Vehicles Act and Rules. The appellant contended that the Certificate of Compliance was redundant after such certification, and there was no violation of import policy. The appellant cited relevant case law to support their argument.

Decision and Rationale:
After considering the arguments, the Tribunal analyzed the import policy notes and the requirement of type approval certificates under the Central Motor Vehicle Rules. The Tribunal noted that the vehicles had been registered and certified by the Delhi Government, indicating compliance with all relevant provisions. The Tribunal held that the confiscation based on procedural lapses was not justified, as the intent of the policy condition had been fulfilled. The Tribunal set aside the order of confiscation and allowed the appeal.

Conclusion:
The Tribunal ruled in favor of the appellant, setting aside the order of confiscation and penalties imposed. The Tribunal found that the vehicles' registration and certification by the Delhi Government demonstrated compliance with the necessary provisions, rendering the confiscation based on procedural lapses unjustified.

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