2014 (1) TMI 638 - AT - Customs

Denial of refund claim - Import of E-bikes in CKD condition - Exemption Notification No. 102/2007-Cus., dated 14-9-2007 - Refund of the Additional Duty of Customs if imported goods were sold after the discharge of VAT - Commissioner allowed refund claim - Held that - goods were assessed at the time of their import as E-bikes in CKD condition and not as part of E-bikes. If that be so, we really are unable to appreciate the Revenue s contention that for the purpose of refund of ACD, same has to be considered as E-bikes part. Revenue relies on Boards Circular No. 15/2010-Cus., dated 29-6-2010 is not appropriate inasmuch as in the said circular reference was made to the imports of timber logs which were sawn or cut logs and were sold as sawn and cut log . Similarly, Revenue s reference to the Chapter Note 6 of Section XVII does not advance their case inasmuch as the same is in respect of incomplete or unfinished articles having essential character of that article but not ready for direct use - admittedly the imported goods were E-bikes in CKD condition and same were assessed to duty as E-bikes. If that be so, the respondents are admittedly entitled to refund of ACD paid by them at the time of import of the goods when subsequently they were sold as E-bikes and upon discharge of VAT - Decided against Revenue.

Summary

Issues:
1. Refund of Additional Duty of Customs on imported E-bikes in CKD condition under exemption Notification No. 102/2007-Cus.
2. Classification of imported goods as E-bikes or parts of E-bikes for the purpose of refund.

Analysis:

Issue 1: Refund of Additional Duty of Customs
The case involved the appellant importing E-bikes in CKD condition and clearing them by paying Additional Duty of Customs. Subsequently, the appellant claimed a refund of the duty paid under exemption Notification No. 102/2007-Cus. The Revenue denied the refund, alleging that the imported goods were parts of E-bikes, not complete E-bikes. The Commissioner (Appeals) allowed the appeal, stating that the goods were assessed as E-bikes in CKD condition at the time of import, making them eligible for the refund under the notification. The Tribunal upheld the Commissioner's decision, emphasizing that the goods were imported and assessed as complete E-bikes, entitling the appellant to the refund upon sale and discharge of VAT.

Issue 2: Classification of imported goods
The crucial point of contention was whether the imported goods should be classified as E-bikes or parts of E-bikes for the purpose of refund. The Commissioner (Appeals) highlighted that the goods were classified as E-bikes in CKD condition at the time of import under Tariff Item No. 8711 90 91. This classification as complete E-bikes, not parts, was crucial for determining eligibility for the refund under the Customs Tariff Act. The Tribunal concurred with the Commissioner's analysis, rejecting the Revenue's argument that the goods should be considered as parts of E-bikes for the refund. The Tribunal emphasized that the assessment by Customs as complete E-bikes at the time of import was decisive in establishing the appellant's entitlement to the refund under the exemption notification.

In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the Commissioner (Appeals) decision regarding the refund claim. The judgment underscored the importance of the initial classification of imported goods as complete E-bikes, not parts, for determining eligibility for refunds under relevant notifications and the Customs Tariff Act.