MANN TOURIST TRANSPORT SERVICE (P) LTD. Versus Commissioner of Customs (I), Nhava Sheva>2014(10)LCX0145

2014(10)LCX0145

IN THE CESTAT, WEST ZONAL BENCH, MUMBAI [COURT NO. II]

S/Shri P.R. Chandrasekharan, Member (T) and Ramesh Nair, Member (J)

MANN TOURIST TRANSPORT SERVICE (P) LTD.

Versus

Commissioner of Customs (I), Nhava Sheva

Final Order No. A/1547/2014-WZB/C-I(CSTB), dated 7-10-2014 in Appeal No. C/85905/2013-Mum

Cases Quoted -

Commissioner v. Mahindra and Mahindra Ltd. - 2005(07)LCX0227 Eq 2006 (197) ELT 0341 (Tribunal)
- Relied on [Paras 3.3, 5.2]
K. Jayachandran v. Regional Transport Officer - W.P. No. 28702 of 2007,
decided on 19-11-2012 by Kerala High Court - Relied on [Paras 3.3,5.2]

Advocated By -

Shri P.A. Augustian, Advocate, for the Appellant.
Shri Ahibaran, Addl. Commissioner (AR), for the Respondent.

[Order per : P.R. Chandrasekharan, Member (T)]. -

The appeal is directed against Order-in-Original No. 125/2012/CC(J)/JNCH, dated 26-11-2012 passed by the Commissioner of Customs (Import), JNCH, Nhava Sheva. In the impugned order the Id. Adjudicating authority has classified Chrysler 300C Sedan RHD car imported by the appellant M/s. Mann Tourist Transport Service Pvt. Ltd., New Delhi, vide B/E No. 880348, dated 4-5-2009 under CTH 8703 23 99 for the purpose of assessment. Aggrieved of the same, the appellant is before us.

2. The brief facts relevant to the case are as follows. The appellant herein imported the above vehicle from M/s. Paramount Auto Exports Inc., USA who is a dealer for Chrysler vehicles and engaged in converting the vehicles into limousines. The original vehicle had a seating capacity of 5. The same was modified by the supplier by inserting a 140 inch of additional bodywork in the middle and the seating capacity was increased to 12. The appellant claimed classification under CTH 87021019 as "Motor vehicle for the transport of 10 or more persons, including the driver". However, the department sought to classify the same under CTH 8703 as a motor car vide order dated 16-7-2009 which was taken in appeal before this Tribunal along with other issues. This Tribunal vide Final Order No. A/349/10/CSTB/C-II, dated 7-10-2010 held as follows :-

"19. In the result, it is ordered as under :

(a) It is held that the car imported by the appellant is a secondhand/used car and not a new car;

(b) Its declared value is however accepted;

(c) The confiscation of the vehicle is upheld but redemption fine is reduced to Rs. 5 lakhs;

(d) The quantum of penalty is reduced to Rs. 2 lakhs;

(e) The classification issue is remanded to the Commissioner for fresh decision in terms of this order;

(f) The amount of duty shall be redetermined on the basis of fresh classification and also of the declared value of the vehicle.

The appeal is disposed of in the above terms."

As regards classification, it was held by this Tribunal in para 16 of the said order that - "we would hold that the adjudicating authority could obtain expert opinion from competent agencies/authorities like ARAI and VRDE on the designed seating capacity of the vehicle and then proceed to determine its classification under the Tariff".

2.1 The said decision of this Tribunal was challenged by the Revenue by way of Civil Appeal No. 15014 of 2011 and the appeal was dismissed by the Hon'ble Apex Court vide order dated 11-7-2011. Thereafter, the vehicle was released provisionally vide letter dated 19-4-2011 by the Customs authorities on execution of a bond for Rs. 54,62,939/- and a bank guarantee for Rs. 15 lakhs. The fine and penalty confirmed by this Tribunal was ordered to be paid. However, the department did not make any effort to get the vehicle examined by ARAI/VRDE and decide the classification as directed by this Tribunal in the order dated 7-10-2010.

2.2 Much after the provisional release of the vehicle, the department referred the matter to ARAI, Pune, vide letter dated 12-11-2012 followed up by a visit by the Appraising Officer on 19-11-2012. In response thereto, ARAI vide letter dated 19-11-2012 has, inter alia, responded as follows :-

"1. From the copy of certificate available in your office record file, it is evident that this model is originally certified for 5 seats. It is advised to verify from the concerned vehicle manufacturer about type approval certification issued from the country of origin for the above vehicle with modified seating capacity.

2. Under provisions of Motor Vehicles Act, any modification/alteration to the original vehicle are not permitted under Section 52 of the Motor Vehicle Act, a copy is enclosed for ready reference. However, being an individual second hand import, this vehicle is not falling under the purview of Central Motor vehicle Rules certification.
On the basis of the above certificate, the impugned order has been passed by concluding that ARAI has also confirmed that the vehicle imported is principally designed for 5 persons. Hence the appeal.

3. The Id. Counsel for the appellant made the following submissions :-

3.1 The Revenue has not got the impugned vehicle tested by ARAI as directed by the Tribunal in the remand order. The said authority has merely observed that the vehicle was originally designed for a seating capacity of 5 persons. However the design of the vehicle was modified/altered to increase the seating capacity to 12 persons. Thus when the vehicle was presented at the time of imports, it had a seating capacitv of 12, meriting classification under CTH 8702.

3.2 Subsequent to the release of the vehicle, the appellant has got the vehicle registered with the Regional Transport Authorities at Delhi. The vehicle registration certificate dated 5-9-2011 issued by the RTO, Delhi, describes the seating capacity as 10. The certificate of fitness issued by the Transport Department of the Govt, of National Capital territory of Delhi also certifies the seating capacity as 10. The tourist vehicle permit issued for the said vehicle by the State Transport authority also show the seating capacity as 10 (9 + one). Thus the transport authorities who are concerned with the registration, fitness and use of the vehicle has unequivocally confirmed the seating capacity as ten. Therefore, the vehicle merits classification under CTH 8702.

3.3 Reliance is placed on the decision of the Hon'ble High Court of Kerala in K. Jayachandran v. Regional Transport Officer, Trichur & Others. In W.P. No. 28702 of 2007 decided on 19-11-2012. The question for consideration in the said case was whether alteration in a vehicle is permissible at variance with the manufacturer's specification contained in the "prototype test certification". In the said decision it was held by the Hon'ble High Court that - "the MV Act and the Rules contemplate such approved prototype to be the core on which a body is to be built upon. Such building of bodies on the approved prototype chassis also has to conform to the provisions of the Act and the Rules to ensure the safety and road-worthiness of the vehicle when used with the body built on it. The Registering authority has to verify such safety and road-worthiness with reference to the specifications in the Act and the Rules as also specification issue under Rule 261 of the K.M.V. Rules." Accordingly the matter was remanded to the Registering Authority and the appellant was allowed to ply the vehicle based on the provisional registration given. Reliance is placed on the decision of this Tribunal in the case of Mahindra & Mahindra [2006 (197) ELT 341] wherein it was held that vehicles with a seating capacity of 10 persons or more merited classification under CETH 87.02 and not under CETH 87.03. The ratio of these decisions apply to the facts of the present case. Accordingly it is pleaded that the impugned order be set aside and the appeal allowed.

4. The Id. Addl. Commissioner (AR) appearing for the Revenue reiterates the findings of the adjudicating authority.

5. We have carefully considered the submissions made by both the sides.

5.1 In the remand order dated 7-10-2010, this 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.

5.2 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 certificate 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. In this factual scenario, the decisions of the Hon'ble High Court of Kerala in K. jayachandran v. Regional Transport Officer, Trichur & Others in W.P. No. 28702 of 2007 and the decision of this Tribunal in the Mahindra & Mahindra case (cited supra) become relevant and applicable.

6. In view of the foregoing, the 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. Accordingly, we set aside the impugned order and allow the appeal with regard to the classification of the vehicle.

(Operative part of the order pronounced in the Court on 7-10-2014)

Equivalent 2015 (319) ELT 0153 (Tri. - Mumbai)