2026-VIL-734-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Classification and Valuation of components [heater, gear assembly, CAM, and lip seal] for compressors and automotive air conditioners – The Premises Based Audit (PBA) conducted by the Department found that the appellant had misclassified certain goods and short paid duty without applying the correct value – SCN seeking demand of duty of over Rs.77 crores. The Commissioner confirmed a demand of only Rs. 6.84 crores and dropped the rest. There is no appeal by the Revenue against the demand dropped by the Commissioner. Appeal by party against the demand confirmed by the Commissioner – HELD - Since there is no dispute on the legal position regarding the valuation, the matter insofar as the valuation is concerned is remanded to the Commissioner so that he can get an opportunity to examine the freight certificates now said to have been obtained by the appellant and decide the issue - The classification of 'O' Ring, Snap Ring and Gear Assembly has been conceded by the appellant. The classification of Heater is remanded to the Commissioner as the appellant disputes the recording in the order that it had accepted the department's classification. The classification of CAM is also remanded so that the appellant can explain its role of CAM in the Air conditioners. As for classification of Lip Seal, automobile parts such as washers, joints and the like and articles of vulcanised rubber, even if they are identifiable as such, cannot be classified under Chapter 87 and must be classified under the respective headings. Applying this section note, the Lip seals deserve to be classified under CTI 4016 93 30. The classification of the lip seal under CTI 8708 99 00 in the impugned order is not correct and set aside - The demands for extended period of limitation and the penalty imposed cannot be sustained as there is no evidence of collusion, wilful misstatement or suppression of facts. Classification of goods under a CTI is a matter of opinion. Simply because one holds a different and even an incorrect view regarding classification of the goods, it does not imply that the person has colluded or wilfully misstated or suppressed facts with an intent to evade duty - The appeal is partly allowed by remand
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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