Import of Cars - Cars manufactured in America and transshipped to India via Dubai and Thailand - Cannot be treated as imported from USA - Tribunal by Majority upholds confiscation
By TIOL News Service
NEW DELHI, JULY 12, 2013: NETIZENS may recall our story - Cars manufactured in America and transshipped to India via Dubai and Thailand - Whether satisfy policy condition of ‘Imported from country of manufacture' - Matter referred to Third Member
The Tribunal has now decided the issue by a Majority order.
A quick recap of the facts.
One of the Conditions for import of a new vehicle as per Import Policy ( Chapter 87 in Schedule 1 of the ITC HS) is that the vehicle should have been imported from the country of manufacture.
In the instant case, the cars were shipped from USA to India via Dubai and Thailand. It is the argument of revenue that that the car should have been imported from the Country of Origin. The argument of the importer that the goods were shipped from USA to UAE to Thailand and then to India and hence the condition is complied is meaningless. For any goods, if the country of manufacture and place of shipment are different there will be evidence that the goods have come from the country of manufacture to the country of shipment. To argue that such proof is enough for complying with the condition virtually renders the condition redundant.
Member (T) held that proving the path of the goods imported is not sufficient to meet the condition that the goods should have been imported from the country of manufacture. The cars were imported in contravention of the condition that they should have been imported from the country of manufacture and the cars were rightly confiscated under section 111 (d) of the Customs Act.
However, Member (J) held that the evidences showed that vehicles were originally shipped from USA and reached India via Dubai and Thailand. As such it can be safely concluded that the export of the vehicles originated from 'country of manufacture' and the same have undergone transhipment . Inasmuch as there is no doubt about the vehicles having been shipped from the country of manufacture, i.e., USA and having reached India through UAE and Thailand, it cannot be held to be violation of the policy condition.
In view of the difference of opinion, the matter was referred to the third Member. The third Member held:
There is no dispute that the country of manufacture of the car was USA and no export was made from USA. It is admitted fact that import was made from Thailand which was the port of landing and port of destination was India. Import policy had mandate that the import of the car should be from the country of manufacture.
The car import policy being the law of the land which was subject matter of scrutiny by Customs and Import having been made under that policy, contravention of that law is prevented by Customs. The appellant having contravened policy without the import being made from the country of manufacture defeats the spirit and object of the policy. That made the car confiscable and the car became smuggled goods liable to penal consequence of law of customs.
Perusal of the import condition as per policy clearly throws light that legislature intended import of car to enjoy notification benefit only if such import is made from the country of manufacture. The landing port should be the port of export and if it is in a land locked country, that may be imported from the adjoining country situated in the land locked country of coastal line from which export was permissible. When the car in question came from USA to UAE, it was exported from USA to UAE and thereafter export was from UAE to Thailand. India was third destination and USA not being land locked country which remained undisputed, no inference can be drawn to equate the import from Thailand into India as import from USA into India.
Accordingly, the Tribunal upheld the confiscation of the imported cars.
It is interesting to note that the third Member observed that the Adjudicating Authority imposed very mild penalty and redemption fine while there was an attempt made by appellants to be enriched at the cost of the country in violation of import policy. However, the Bench has reduced the redemption fine to Rs 2 lakhs and penalty to Rs 1 lakh .
(See 2013-TIOL-1055-CESTAT-DEL)
