2025-VIL-1364-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Classification, Extended Period of Limitation, Confiscation, Penalties – Respondents imports of various automotive parts like Hub Assembly, Parts/Components of Door Checker, Stabilizer Link Assembly, Ball Joint and Tie Rod - Department proposed reclassification of these items under different headings of the Customs Tariff Act, 1975 and demanded differential duty by invoking the extended period of limitation under Section 28(4) of the Customs Act, 1962 - For the Hub Assembly and its parts, the Adjudicating Authority upheld the original classification under CTH 8708 99 00. Department appeal against the Adjudicating Authority's order - Whether "Hub Assembly" and "Parts/components of Hub Assembly" should be classified under CTH 87089900 or under CTH 87085000 – HELD - the purpose of Hub assembly is to rotate along with axle so that the power from engine is transmitted to the road wheel and hence the Hub assembly does the same function as the one done by the axle. Hence, Hub assembly is part and parcel of the Axle. Without Hub assembly, the purpose and function of the axle cannot get completed. Therefore, the Hub assembly is not a separate part carrying out a function independent of the axle. The function of both axle and Hub assembly is same. Having come to the conclusion that Hub assembly is a part of Axle, the same has to be classified as part of axle - The Hub Assembly and its parts are rightly classifiable under CTH 87085000 as per the Chapter Heading 8708 and the Explanatory Notes which specifically include "Hubs" under this heading. The Compendium of Classification Opinions of the World Customs Organization classified Hub Assembly under Heading 8708 50 - The Hub-assembly and its parts are rightly classifiable under CTI 8708 5000 and accordingly not eligible for 5% BCD under CN No. 152/2009 (Sl.No. 896) and thus the appeal of the Appellant-Department succeeds, as far as classification of Hub-assembly and their parts is concerned. However, the Adjudicating Authority's order restricting the demand to the normal period of two years and not invoking the extended period is upheld – The appeal is partly allowed - Whether the extended period of limitation under Section 28(4) of the Customs Act, 1962 is invocable in the present case – HELD - The Respondent had been classifying the goods under CTH 87089900 since 1997 and even after the issuance of the Customs Notification No. 152/2009 providing concessional rate of duty under the Indo-Korea Preferential Trade Agreement. Over 48 consignments were examined by the Customs officers without any objection to the classification. Mere non-payment of duty or classification dispute does not tantamount to 'wilful misstatement' or 'suppression of facts' to invoke the extended period. There was no mala fide intention established against the Respondent and hence the extended period under Section 28(4) is not invocable - Whether the imported goods are liable for confiscation and penalties – HELD - Since there was no mis-declaration of description, quantity or value, the goods are not liable for confiscation under Sections 111(m) and 111(q) of the Customs Act, 1962. Further, in the absence of any mala fide or wilful conduct to evade payment of duty, penalties under Sections 112(a), 114A and 114AA are also not imposable on the Respondent.
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