2016 (8) TMI 481 - AT - Customs

Classification importation of e-bykes in CKD condition - Notification No.06/2006-CE providing concessional rate of 4% ad valorem only on electrically operated vehicles interpretation whether e-bikes in CKD condition to be interpreted as parts and components required to be assembled to make e-bikes or to be interpreted as electrically operated vehicles Held that - there is no basis to treat the impugned goods as e-bikes for the purpose of classification and as parts (and not as e-bikes) for the purpose of exemption Notification. Notification No.06/2006-CE, at Sl. No.35 of the table appended thereto allows concessional rate of duty of 4% ad valorem to electrically operated vehicles including two and three wheeled electric motor vehicles. In this scenario, once the goods have been classified to be electrically operated bikes, they clearly get covered under the scope of entry at Sl. No.35 of the table appended to the said Notification - the impugned goods are entitled to the benefit of Notification No.6/2006-CE decided in favor of appellant.

Summary

Issues: Interpretation of Notification No.06/2006-CE for concessional rate of duty on electrically operated vehicles

Analysis:
1. Issue: Classification of impugned goods as e-bikes under heading CTH 87119091 and applicability of Notification No.06/2006-CE.

- The appellant imported electrically operated motor cycles (e-bikes) in CKD condition and Revenue classified it under 87119091. The benefit of concessional rate of duty was disallowed as the goods were in CKD condition.
- The appellant argued that the goods were correctly classified as e-bikes under CTH 87119091, making them eligible for the concessional rate of duty under Notification No.06/2006-CE for electrically operated vehicles.
- The Tribunal noted that once the goods were classified as electrically operated bikes, they fell under the scope of the Notification, supported by a Supreme Court judgment and CBEC circular emphasizing classification consistency for exemption benefits.

2. Issue: Interpretation of the wordings of Notification No.06/2006-CE strictly.

- The Departmental Representative argued for a strict interpretation of the Notification, granting exemption only to fully assembled electrically operated vehicles, not to CKD kits.
- The Tribunal analyzed the wording of the Notification and held that the exemption applied to components and parts falling within Chapter 87 of the Tariff Act, emphasizing that if goods were classified as components for duty payment, they should also be considered as components for exemption purposes.

3. Judgment:

- The Tribunal found that the impugned order disallowing the concessional rate of duty was not sustainable and set it aside.
- It concluded that the impugned goods, correctly classified as e-bikes, were entitled to the benefit of Notification No.06/2006-CE, allowing the concessional rate of duty.
- The appeal was disposed of in favor of the appellant, confirming their eligibility for the concessional rate of duty on electrically operated vehicles under the said Notification.