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Issues: Classification of "Formula K. Indy Single Seat Go Kart" under Heading 95.08 or 87.03; Disclosure of evidence from RTO office; Lack of communication affecting natural justice; Need for expert scrutiny in classification.
In this judgment by the Appellate Tribunal CEGAT, Mumbai, the issue at hand was the classification of the "Formula K. Indy Single Seat Go Kart." The importers argued that these goods, designed for amusement parks and controlled by a central operator, should be classified under Heading 95.08. However, the Commissioner classified them under Heading 87.03 as passenger vehicles, requiring a specific license for import. The Commissioner's decision was based on the power source of IC Engines and the need for a license, despite the importers' reference to HSN sub-notes regarding playground vehicles. The Tribunal noted that the lack of disclosure of evidence from the RTO office, consulted by the Commissioner, was a violation of natural justice, impacting the classification process. The Tribunal observed that the specific inquiry with the RTO office, which influenced the Commissioner's decision, was not shared with the importers, affecting their ability to present a complete case. This lack of communication was deemed a breach of natural justice, rendering the proceedings legally flawed. Consequently, the Tribunal allowed the appeal on the grounds of non-disclosure of crucial evidence and remitted the case back to the Commissioner for proper disclosure and consideration of all relevant information. Regarding the classification of the contested goods, the Tribunal found it challenging to reach a definitive conclusion based on the available literature. Despite the claims that the vehicles were solely for amusement parks and not for road use, the presence of IC Engines, clutch, accelerator, and brake raised questions. The discrepancy between the engine power and the stated top speed, as well as the presence of wheels and tires, added complexity to the classification. To ensure accuracy, the Tribunal suggested expert scrutiny by transportation specialists, preferably from academia, to assist in determining the appropriate classification of the products. In conclusion, the Tribunal directed the Commissioner to disclose the evidence from the RTO office to the importers, organize an inspection by experts for classification assistance, allow the importers to present their case, and issue a comprehensive speaking order. This decision aimed to uphold principles of natural justice, ensure a fair classification process, and involve expertise for accurate determination in this complex case.
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