ORDER
SHEET W.P.No.789 of 2014 IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction ORIGINAL SIDE MACNEILL ENGINEERING LTD & ANR.
Versus COMMISSIONER OF CUSTOMS (PORT).CUSTOM HOUSE & ORS.Petitioners Respondents BEFORE: The Hon'ble JUSTICE I.P.MUKERJ.Date : 4th September, 2014.
For Petitioners : Mr.Bhaskar Sen, Sr.Adv.with Ms.S.Sengupta with Mr.S.Basu, Adversus For Respondents : Mr.R.Bharadwaj with Mr.T.M.Siddiqui, Adversus More often than not, in the interpretation of statutes, the Court should make a purposive interpretation of their provisions.
A strictly literal interpretation may not serve the purpose of justice.
The same principle should be applied to the interpretation of the Customs Act, 1962 and the related statutes and rules, for example the Customs Tariff Act, 1975 and the schedules appended thereto.
The subject matter of controveRs.in this case are all the components of a battery operated tricycle, except its battery, packed together and imported into India.
The Customs authorities do not accept the selfassessment made by the writ petitioners that these items are parts of a motorcycle and are making an assessment under Section 17(3) of the Customs Act, 1962, as submitted by Mr.Bharadwaj, learned Advocate for the respondents.
They have raised the following query while making this assessment as contained in Annexure P-4 at page 30 of the writ petition : “Pl.
submit necessary cft.
in terms of import licensing note 2(II).to the Chapter 87.” According to Mr.Sen, learned Senior Advocate for the petitioneRs.the concerned note under Chapter 87 of the current Import and Export Policy related to “a vehicle”.
His client was not importing a vehicle but parts thereof.
Let me now set out the provisions mentioned in note 2(II)(c) to Chapter 87 of the current Import and Export Policy : “(2)(II).The import of new vehicles shall be subject to the following conditions : * (c) * * * Whoever being an importer or dealer in motor vehicles who imports or offers to import a new vehicle into India shall, (i) at the time of importation, have valid certificate of compliance as per the provisions of Rule 126 of Central Motor Vehicle Rules [CMVR]., 1989, for the vehicle model being imported, issued by any of the testing agencies, specified in the said rule; (ii) be responsible for all the provisions assigned to the manufacturer as per Rules 122 & 138 of CMVR, 1989 and for issuing Form 22, as per provisions of CMVR, 1989; and (iii) give an undertaking in writing that the proof of compliance to conformity of production as per Rule 126A of CMVR shall be submitted within six months of the imports.
In case of failure to do so, no further import of new vehicle of that model shall be allowed thereafter.” Mr.Sen also showed me the definition of a motor vehicle in Section 2(28) of the Motor Vehicles Act, 1988.
A motor vehicle is defined as follows: “(28) “motor vehicle” or “vehicle” means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding [twenty-five cubic centimetres].;” On the other hand, Mr.Bharadwaj submitted that the entire vehicle except the battery was being imported by parts in a “completely knocked down condition”.
He showed me the explanatory notes of Chapter 87 of the above Tariff Act to the following effect : “An incomplete or unfinished vehicle is classified as the corresponding complete or finished vehicle provided it has the essential character of the latter (see interpretative Rule 2 (a)).as for (A) A motor vehicle, not yet fitted with the wheels or tyres and battery.
(B) A motor vehicle not equipped with its engine or with its interior fittings.
(C) A bicycle without saddle and tyres.
This Chapter also covers parts and accessories which are identifiable as being suitable for use solely or principally with the vehicles included therein, subject to the provisions of the Notes to Section XVII (see the General Explanatory Note to the Section).” He also placed entry 8714 of the schedule to Chapter 87 which related to parts of a motorcycle.
These are exigible to 10% duty.
Entry 8711 of the same chapter pertains to motorcycles, mopeds etc.and entry 8711 90 91 relates to electrically operated motorcycles, attracting 100% duty.
It is very clear to me that this kind of importation of an entire vehicle, except the battery, broken down into its parts, was not contemplated by the legislature.
The cardinal test of a motor vehicle, appears to me to be that it should be capable of mechanical propulsion from power derived from a source, external or internal, in the state in which it is.
It is true that when an entire motor vehicle or a substantial part thereof is imported, which includes the description of motor vehicles in the explanatory notes cited by Mr.Bharadwaj, only accessories like wheels, tyres, batteries are to be joined to it.
This kind of importation, by the petitioner in my opinion, does not fit into this description.
What is imported cannot be called a vehicle, by any principle of purposive interpretation.
Therefore, the insistence of the Customs authorities on the certificates, mentioned in their query, was not proper.
It is not part of their job to ask for the certificates because the vehicle has not been manufactured as yet.
After the parts are assembled and the vehicle assumes its status, then it is upto some other authority to deal with it in accordance with law.
Now I come to the duty element.
As I have said before, it appears that this kind of importation in a “completely knocked down state” was not within the contemplation of the legislature.
The imported items may not be “parts” wholly and are not a vehicle, according to my interpretation.
Then will they not be assessed to duty?.
While making an assessment of duty it should be the duty of every officer to make a purposive interpretation of the Act, the Rules, the subject headings and the tariff thereunder.
If it is found on taking into account the entirety of the parts in one package that it is closer to a vehicle, the assessment should be made accordingly.
On the other hand, if it is found that they are closer to the description “parts” and if assembled, may constitute a vehicle, assessment should be made treating them as parts.
Therefore, the assessment part is left to the Customs officials.
Therefore, this writ application is disposed of with the direction that the respondent authorities will be free to make the assessment under Section 17 of the Customs Act without insisting on the certificates mentioned in their query appearing in the Annexure P-4 at page 30 of the writ petition.
However, the assessment will be made in accordance with law and the above observations upon giving an opportunity of hearing to the writ petitioners by a reasoned order by 31st October, 2014.
This writ application is accordingly disposed of.
Affidavits were not invited.
The allegations contained in the petition, are deemed not to be admitted.
Certified copy of this order, if applied for, be supplied to the parties upon compliance with requisite formalities.
(I.P.MUKERJI, J.) K.
Banerjee A.R.[C.R.].