2025-VIL-1952-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Import of Incomplete/unfinished e-rickshaw, classification under Customs Tariff Heading - Appellant, a manufacturer of e-rickshaws, imported various parts/spare parts of e-rickshaw for manufacture – Revenue alleged that the appellant had imported incomplete e-rickshaws in CKD/SKD condition, but classified them as parts of e-rickshaw to evade higher duty. The authorities invoked provisions of extended period of limitation and imposed penalties on the appellant and its officials - Whether the imported goods should be classified as incomplete e-rickshaws under CTH 8703 or as parts of e-rickshaw under CTH 8708 – HELD - HSN General Explanatory Notes to Chapter 87 provide that an incomplete or unfinished vehicle can be classified as a complete or finished vehicle if it has the essential character of a finished vehicle. The office order dated 12.03.2014 relied upon in SCN, identifies five major components/assemblies (transmission, motor, axle, chassis, and controller) that provide the essential character to a complete e-rickshaw in CKD/SKD condition. If along with the motor, any two of these essential components were missing, the goods would be considered as parts of e-rickshaw under CTH 8708 - In the present case, the appellant did not import the motor, which is the most vital essential component as per the office order. Therefore, the imported goods should have been classified as parts of e-rickshaw under CTH 8708 and not as incomplete e-rickshaws under CTH 8703 - The Principal Commissioner has also drawn a presumption from the number of parts imported by the appellant to conclude that they would constitute a fixed number of e-rikshaws. A finding has been recorded that the appellant had imported many e-rikshaws in CKD/SKD condition. Liability cannot be fastened on the basis of presumption, more particularly when the conditions set out in the office order dated 12.03.2014 for an e-rikshaw to be in CKD/SKD were not satisfied - The impugned order is set aside and the appeals are allowed - Whether the extended period of limitation under Section 28(4) of the Customs Act could be invoked for previous Bills of Entry – HELD - The Supreme Court has held that mere suppression of facts is not enough and there has to be a deliberate attempt to evade payment of duty for invoking the extended period of limitation. The impugned order merely held that the appellant had not disclosed that it had imported incomplete e-rickshaws, but there was no finding that such suppression was with an intent to evade payment of duty. In the absence of such a finding, the extended period of limitation could not have been invoked.
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