2018 (5) TMI 1244 - AT - Customs

Classification of imported goods - Hover Board - whether classified under CTH 9506 or under CTH 8711? - Held that - Chapter 95 covers toys whereas chapter 87 deals with all kinds of motor vehicles other than Railway or tramway and rolling stock - as regards the disputed item, it is an electrically powered two wheeled transportation device designed to be used at low speed, for transportation of one person. As such from the size of the item, it is evident that it is more appropriate to be considered as Motor vehicle rather than a toy - The W.C.O. has recommended classification of the item as 8711 - appeal allowed - decided in favor of Revenue.

Summary

Issues:
Classification of imported goods under Customs Tariff heading 9506 as 'toys' challenged by Revenue for classification as 'Motor Vehicle' under heading 8711.

Analysis:
The appeal before the Appellate Tribunal CESTAT NEW DELHI involved a dispute regarding the classification of imported goods. The respondent-assessee imported goods, including a 'Hover Board,' which was initially classified under CTH 95069990 by the Original Authority. However, the Commissioner (Appeals) changed the classification to Chapter 95, considering it as a toy. The Revenue contended that the 'Hover Board' should be classified under heading 8711 as a 'Motor Vehicle.' The Tribunal heard arguments from both sides and examined the issue in detail.

The ld. AR for the Revenue argued that the 'Hover Board' is essentially a 'Motor vehicle' powered by electric motors for transportation. He referred to a decision by the Harmonisation Committee of the World Customs Organisation, which recommended classifying similar devices under 8711. The ld. AR highlighted that the item had been consistently classified under 8711 in various Custom houses, supporting the contention that it should not be considered a toy under CTH 9506.

On the other hand, the ld. Counsel for the respondent-assessee defended the classification under heading 9506, asserting that the 'Hover Board' should be treated as a toy due to its design and limited speed capabilities. The Tribunal carefully considered the arguments presented by both parties and examined the nature of the disputed item.

After thorough deliberation, the Tribunal observed that Chapter 95 covers toys, while Chapter 87 pertains to motor vehicles. Upon reviewing the characteristics of the 'Hover Board' and the Harmonisation Committee's decision, the Tribunal concluded that the item should be classified as a 'Motor vehicle' under heading 8711. The Tribunal emphasized that the Indian Custom Tariff aligns with the Harmonised System of Nomenclature provided by the World Customs Organisation, making the W.C.O. rulings influential in classification disputes. Consequently, the impugned order was modified, and the 'Hover Board' was classified under heading 8711, in line with the Original Authority's decision.

In conclusion, the appeal filed by the Revenue was allowed, and the classification of the 'Hover Board' as a 'Motor vehicle' under heading 8711 was upheld by the Appellate Tribunal CESTAT NEW DELHI.