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2025 (3) TMI 827 - AT - CustomsClassification of imported goods - e-bikes in CKD-Kit or part of e-bike? - to be classified under HS code 8711 (1) (b) or HS code 8711 (2)? - assessment under S.No. 531A(1)(b) of N/N. 50/2017-Cus. dated 30.06.2017. Whether the goods imported by the appellant under Bill of Entry No. 5864756 dated 28.11.2019 declared as E-Bike in CKD Condition merit assessment under S.No. 531A(1)(b) of Notification No. 50/2017-Cus. dated 30.06.2017? - HELD THAT - Admittedly the goods at the time of 100% examination were found to be the parts of e-bike like plastic cover chasis disc brake shocker front fork seat wheel rim converter controller etc. Admittedly the goods do not contain battery/battery pack and the electric compressor. The bare perusal in the light of above two admitted facts makes it clear that the E-Bikes in CKD Condition were eligible for the benefit of customs duty/BCD at the rate as given in the said notification (at the rate of 15%) provided the knocked down kit of e-bike along with all necessary components parts or subassemblies also has the disassembled battery pack the motor controller etc. sub clause (a) or the preassembled battery pack the motor controller etc. sub clause (b) . The duty benefit of 15% is available in case of disassembled battery pack and that of 25% is available to preassembled battery pack. For any other form of knocked down kit of e-bike the duty to be paid is at the rate of 50%. Since admittedly the impugned Bill of Entry does not contain the battery pack either disassembled or preassembled a clear understanding of this entry of notification establishes that the benefit of this notification was not available to the appellant. Entry at S.No. 531A of Notification No. 50/2017 dated 30.06.2017 has apparently no ambiguity. If for sake of it the ambiguity been there it should be understood in favour of Revenue. The entry cites three situations with three different rates of duties. S.No. 531A(1)(a) required duty at the rate of 15% 531A(1)(b) requires duty at the rate of 25% and S.No. 531A(2) required duty at the rate of 50%. Apparently and admittedly the impugned goods do not fall under 1(a) and 1(b) of 531A hence the benefit of the Notification No. 50/2017 has rightly been denied. Imported goods to be considered as the part of e-bikes which merit classification under CTH 87141090 or not? - the Commissioner (Appeals) has denied that relief based on the declaration of the appellant in the impugned Bill of Entry that the imported goods are E-Bike in CKD Condition - HELD THAT - It is opined that the said declaration was made with a view of taking benefit of N/N. 50/2017-Cus. dated 30.06.2017. It is already held appellant not entitled for the said benefit. In the given circumstances there has to be a specific finding vis- -vis the entitlement of the appellant about the said alternate plea. It is deemed necessary that the original adjudicating authority shall examine the entitlement/eligibility of the appellant vis- -vis impugned Bill of Entry as to whether the imported goods can fall under CTH 87141090 in the given set of circumstances. Conclusion - The appellant was not entitled to the duty benefit under the claimed notification due to the absence of necessary components in the imported kit. However matter remanded to the original adjudicating authority to examine the appellant s alternate plea regarding classification under a different tariff heading. Appeal allowed by way of remand.
ISSUES PRESENTED and CONSIDERED
The core legal question considered in this judgment is whether the goods imported by the appellant under Bill of Entry No. 5864756 dated 28.11.2019, declared as E-Bike in CKD Condition, merit assessment under S.No. 531A(1)(b) of Notification No. 50/2017-Cus. dated 30.06.2017. ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents The legal framework revolves around the interpretation of Notification No. 50/2017-Cus. dated 30.06.2017, specifically entry at S.No. 531A, which outlines the conditions under which electrically operated motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without side cars, can be imported at different rates of duty, depending on the configuration of the knocked down kit. The court also considered precedents such as Navopan India Ltd. Vs. Collector of Central Excise and Customs and Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar & Company, which emphasize the strict interpretation of exemption notifications and the burden of proof lying with the taxpayer to establish entitlement to such exemptions. Court's Interpretation and Reasoning The Tribunal interpreted the notification to mean that the benefit of reduced customs duty rates is contingent upon the presence of specific components, such as battery packs and electric compressors, in the imported kit. The absence of these components in the appellant's consignment led to the conclusion that the goods do not qualify for the reduced duty rates under S.No. 531A(1)(b). Key Evidence and Findings The Tribunal noted that the goods, upon examination, consisted of parts of e-bikes such as plastic covers, chassis, disc brakes, shockers, front forks, seat, wheel rim, converter, and controller, but did not include battery packs or electric compressors. This finding was crucial in determining that the goods did not meet the criteria for the duty benefit under the notification. Application of Law to Facts The Tribunal applied the strict interpretation principle to the exemption notification, concluding that the appellant failed to meet the burden of proof required to claim the benefit of the reduced duty rates. The absence of necessary components in the consignment meant that the goods fell under a different category that attracted a higher duty rate. Treatment of Competing Arguments The appellant argued that the battery packs were imported separately due to shipping guidelines prohibiting their inclusion in the same container. They also cited an office memorandum suggesting that other components could substitute for the battery pack. However, the Tribunal found these arguments unpersuasive, emphasizing the need for strict adherence to the notification's terms. The Departmental Representative argued that the exemption notification must be strictly construed, and the burden of proof lies with the appellant. The Tribunal agreed with this position, citing relevant case law to support its decision. Conclusions The Tribunal concluded that the appellant was not entitled to the duty benefit under S.No. 531A(1)(b) of Notification No. 50/2017-Cus. due to the absence of critical components in the imported kit. The appeal was allowed by way of remand to the original adjudicating authority for further examination of the appellant's alternate plea regarding classification under CTH 87141090. SIGNIFICANT HOLDINGS Core Principles Established The Tribunal reaffirmed the principle that exemption notifications must be strictly construed, and the burden of proof lies with the taxpayer to establish entitlement to such exemptions. In case of ambiguity, the benefit of the doubt goes to the Revenue, not the taxpayer. Final Determinations on Each Issue The Tribunal determined that the appellant was not entitled to the duty benefit under the claimed notification due to the absence of necessary components in the imported kit. However, it remanded the matter to the original adjudicating authority to examine the appellant's alternate plea regarding classification under a different tariff heading.
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