2025-VIL-1837-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Import of parts of wind-operated electricity generator (WOEG), Levy of Countervailing Duty (CVD), Scope of CVD Notification, Vivisection of value of imported goods - Respondent-importer imported certain parts of a WOEG (windmill) from China. The parts were provisionally assessed to levy CVD under Notification No. 1/2016-Customs (CVD) - Respondent challenged the provisional assessment in appeal, contending that the CVD Notification covers only 'castings' and not the specific and distinct products used in WOEGs that have acquired a different character and nomenclature - Whether the CVD Notification covers only 'castings' or also the specific and distinct parts/products used in WOEGs that have acquired a different character and nomenclature – HELD - The Notification primarily seeks to impose CVD on castings. However, in describing the state in which these castings may, in any given case exist, the Notification has extended the scope of the levy to castings existing in “raw, finished or sub-assembled form” or, crucially, "as a part of a sub-assembly”, equipment or component meant for WOEGs. The meaning of these words, particularly the words “as a part of a sub-assembly” are perfectly clear that the CVD Notification clearly authorizes the levy of CVD on 'castings' even if they form a part of the sub-assembly, equipment or component meant for WOEGs. The language of the Notification is plain and unambiguous in this regard - the Commissioner (Appeals) erred in holding that if the castings are a part of other equipment/ components, such equipment/ components cannot be vivisected, to subject only the castings to duty. If the castings cannot be subjected to duty when they are imported as a part of other equipment, then that portion of the Notification which expressly and specifically authorises this, is rendered nugatory. Where the casting is a part of some other component or equipment, duty may be imposed on the casting - The matter to the Adjudicating Authority to reasonably determine the value of the casting portion as per law after considering the submissions of the respondent-importer. If the Authority is unable to determine such a value, no CVD can be levied – The Revenue appeal is allowed for statistical purposes - Whether the value of the imported goods can be vivisected into 'castings' and 'parts' which are not 'castings' to impose CVD only on the 'castings' – HELD - The Commissioner was correct in concluding that vivisection of the value of the imported goods is not possible. Once a casting has undergone value addition to become a distinct product, its value would be subsumed in the value of the resulting item. Therefore, CVD can only be levied on the value of the casting portion and not on the entire value of the imported goods.
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