2024 (11) TMI 17 - AT - Customs

Classification of imported goods - Respondent had declared the goods as Spare Parts of E-rickshaw - lower authority has classified the goods under CTH 8703.80 which covers the vehicle propelled through motor powered by a battery - HELD THAT - As decided in in the case of Twinkle Tradecom Pvt. Ltd. 2024 (5) TMI 472 - CESTAT KOLKATA in order to have the essential characteristics of any machine or vehicle, the parts involved in the manufacturing should fulfil the basic principle of that vehicle or machine. The lower authority has classified the goods under CTH 8703.80 which covers the vehicle propelled through motor powered by a battery. The goods imported as such, by the respondent, if assembled together, will not provide the basic function of propulsion as required for the classification under CTH 8703. Accordingly, we uphold the findings of the Id. appellate authority in the impugned order and hold that the goods imported would not constitute a fully finished e-rickshaw as it did not have all essential components for a fully finished e-rickshaw. Enhancement of value without following the due process as laid down in the Act and CVR, 2007 and in violation of the principles of natural justice is not sustainable. Since the mis-declaration of the description, classification and value as alleged by the Department has not been established, we hold that the goods Imported are not liable confiscation. Appeal filed by the Revenue is dismissed.

Summary

Issues:
Classification of imported goods under CTH 8703 or 8708, Mis-declaration of goods, Confiscation, Redemption fine, Penalty under Customs Act, 1962.

Analysis:

1. Classification of imported goods: The appeal was filed by the revenue challenging the order passed by the Commissioner of Customs (Appeals) classifying the imported goods under CTH 8708 instead of 8703. The revenue contended that goods in CKD condition should be classified as a complete article. They cited legal precedents to support their argument. However, the Tribunal, in a similar case, held that the imported goods did not constitute a fully finished e-rickshaw as they lacked essential components, such as a battery for propulsion. The Tribunal upheld the Commissioner's classification under CTH 8708, emphasizing the need for a purposive interpretation of statutes.

2. Mis-declaration of goods: The revenue argued that the goods were mis-declared in terms of description, classification, and value, justifying confiscation and penal action under the Customs Act, 1962. However, the Tribunal found that the mis-declaration was not established, leading to the dismissal of the appeal and upholding the setting aside of redemption fine and penalty imposed by the Commissioner of Customs (Appeals).

3. Confiscation, Redemption fine, and Penalty: The lower authority had confiscated the goods, imposed a redemption fine, and penalty under the Customs Act, 1962. The Tribunal, based on the lack of evidence supporting mis-declaration, upheld the decision of the Commissioner of Customs (Appeals) to set aside the redemption fine and penalty, ultimately dismissing the appeal filed by the revenue.

In conclusion, the Tribunal upheld the classification of the imported goods under CTH 8708, rejected the revenue's arguments regarding mis-declaration, and affirmed the setting aside of redemption fine and penalty. The judgment emphasized the importance of a purposive interpretation of statutes and the need for evidence to support claims of mis-declaration under the Customs Act, 1962.