The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), set aside condition of testing in Vehicle Research and Development Establishment (VRDE) the ground that Vehicle complies stipulations for operation and running on Indian roads.
The appellant, Sai Charan Tours and Travels had filed bill of entry for import of a brand new ‘Toyota Alphard SC 3500 CC’ and which, upon determination being found to be ‘second-hand’ and liable to be proceeded against for violation of policy condition (II)(d)(iv) in chapter 87 of the ITC (HS) classification appended to the Foreign Trade Policy for the relevant period, was seized under section 110 of Customs Act, 1962.
On request of the importer, provisional release was permitted subject to payment of duty of Rupees eighty-nine lakhs, submission of bond equal to value of the goods including duty amount and furnishing of bank guarantee equal to half of duty liability. The appellant was also directed to be in compliance with policy condition (II)(iii) of chapter 87 by having the vehicle tested at the Vehicle Research and Development Establishment (VRDE), under the Ministry of Defence or at the Automotive Research Association of India (ARAI).
The Counsel for the appellant argued that separate policy conditions have been notified for new vehicles and for used vehicles and that, in accordance with the licencing note 7 in chapter 87 of the ITC(HS) classification appended to the Foreign Trade Policy. The Counsel also submitted that the vehicle, after clearance on import, had been registered by the competent authority under the Motor Vehicles Act, 1988 without insistence on the condition which, if mandated, would have been.
A Bench consisting of Ajay Sharma, Judicial Member and CJ Mathew, Technical Member held that “The policy condition is not one incorporated merely for the sake of regulating imports and exports of the country but to ensure that the imported goods are compliant with the regulatory measures, other than that relating to imports and exports, under the municipal laws of the country. As the impugned vehicle has already been registered with the authorities concerned, it would appear that the vehicle complies with all the stipulations for operation and running on Indian roads.”
“Accordingly, we hold that the inclusion of this condition as necessary for provisional release is redundant and superfluous and we allow this appeal by expunging the said condition as requirement of provisional release.”
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