2025-VIL-1239-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Classification of ‘Track Assembly’ – Appellant imported essential parts of 'Track Assembly' from its overseas supplier by availing 'nil' rate of Basic Customs Duty (BCD) under Sl. No. 961 of Notification No. 152/2009-Cus dated 31.12.2009 - Department reclassified the goods under CTI 8708 9900 denying the exemption benefit, demanded differential duty, confiscated the goods, and imposed penalties - Whether the subject goods are 'parts of Car Seats' falling under CTI 9401 9000 as contended by the Appellant or are 'accessories' of motor vehicles coming under CTI 8708 9900 as determined by the Revenue – HELD - Going by the principal function test, the track assembly is not merely a sliding mechanism and is solely and principally designed for the front seat of motor vehicle and have no other usage - The track assembly is essential to the operation of modern-day car seats, is a necessary and integral sub-assembly/part of the car seat, is installed in the car seat by the car seat manufacturers, and is a part of the common trade usage and practice - The track assembly manufactured by the appellant is an integral part of the car seat and is classifiable under CTH 9401 - The Tribunal distinguished the Supreme Court's judgment in Insulation Electrical, finding that the goods in the present case are more evolved and not identical to the 'rail assembly' considered in that case – Further, the Department has taken inconsistent stand, as it had earlier accepted the classification of the goods under CTH 9401 for Drawback purposes - The classification of the goods under CTH 9401 is upheld, and the demand for duty, interest, and fine in lieu of confiscation are set aside. The penalties imposed under Section 114AA are upheld for tampering with the description in the Certificate of Origin (COO) certificate, while the penalties under Sections 112 and 114A are set aside – The appeal is partly allowed
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