2026-VIL-125-CESTAT-KOL-CU
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CUSTOMS CESTAT Cases

Customs – Valuation and Classification of Electric Motor Controller – Respondent imported motor controllers and electric tricycle spare parts. The Assessing Officer reassessed the importation by enhancing the CIF value and reclassifying the "Motor Controller" from CTH 8503 0090 to CTH 8708 9900. The respondent, to avoid delay and demurrage charges, cleared the goods on payment of the enhanced customs duty, under protest, and requested the lower authority to issue the order(s) of assessment under Section 17(5) of the Customs Act, 1962. The Ld. Commissioner (Appeals) subsequently set aside the orders of assessment, accepted the transaction value declared by the respondent, and classified the goods as "Motor Controller" under CTH 8503 0090 - Whether the Ld. Commissioner (Appeals) erred in accepting the transaction value declared by the respondent and not enhancing the value under the Customs Valuation Rules, 2007 – HELD - The assessing officer had rejected the transaction values without any valid basis/reasons and without following the due procedure as laid down under Section 14 and Valuation Rules. There was nothing on record to suggest that the transaction values declared by the respondent were not the price actually paid for the goods when sold for export to India, or that the buyer and seller were related or the price was not the sole consideration for sale. The Department also did not adduce any evidence that the respondent had paid any amount over and above the invoice value to the foreign supplier. Accordingly, the Ld. Commissioner (Appeals)'s decision to accept the transaction value declared by the respondent is upheld – Further, the "Motor Controller" imported by the respondent is rightly classifiable under CTH 8503 0090 as it is a part suitable for use solely or principally with the machines of heading 8501 or 8502 (electric motors). The controller performs functions like starting, stopping, and regulating the speed of the motor, which are connected to the motor and principally used with it. There is no specific entry for the controller in the Customs Tariff Act, 1975, and the goods imported by the respondent did not fulfill the description of parts and accessories of e-rickshaw under CTH 8708. Therefore, the Ld. Commissioner (Appeals)'s decision to classify the "Motor Controller" under CTH 8503 0090 is upheld – The Revenue appeal is dismissed
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