2026-VIL-1749-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Competence of officer issuing Show Cause Notice - Corrigendum making the notice answerable to the Principal Commissioner - Appellant imported electric two-wheeler components in CKD condition and claimed the concessional rate under Notification No.50/2017-Cus - SCN issued by an Assistant Commissioner culminated in confirmation of duty, confiscation under Section 111(m) and penalty under Section 112 - Appellant contended that the demand exceeded the monetary limits of the Assistant Commissioner, that a corrigendum cannot validate a notice void ab initio, and that the proceedings were without jurisdiction - Whether the issue of the SCN by the Assistant Commissioner followed by a corrigendum vitiates the proceedings - HELD - A corrigendum is valid where it corrects, clarifies or supplements the Show Cause Notice, with no prejudice to the noticee, before adjudication. Apart from making the notice answerable to the Principal Commissioner, no prejudice was caused to the Appellant. The expression proper officer is function specific and not officer specific, and an Assistant Commissioner who has been designated as an officer of Customs under Section 2(34) of the Customs Act is the proper officer - A corrigendum is nothing but a correction and relates back to the notice itself, and a change in the answerable to clause does not alter the nature of the notice - The contention that the Assistant Commissioner had no power to issue the notice is rejected, and the issue of a corrigendum does not vitiate the adjudication proceedings - Pre-notice consultation before issue of Show Cause Notice - Appellant contended that the consultative letter relied on in the impugned order was never received, that pre-consultation is a substantive safeguard and not an empty formality, and that there was no effective consultation before the Show Cause Notice was issued - Whether the Show Cause Notice is vitiated for want of pre-notice consultation - HELD - The impugned order notes that the Appellant itself referred to the receipt of the pre-consultative letter in its reply to the Show Cause Notice, and the Revenue pointed out that the reply admitted the receipt of such letter. Having admitted the receipt, the Appellant cannot now take up the plea of non-receipt or of the nature of the letter - The contention of lack of pre-consultation is rejected - Maintainability of demand under Section 28 of the Customs Act, 1962 where Bills of Entry were self-assessed and not challenged - Appellant contended that the Bills of Entry attained finality and the Revenue could not proceed without challenging the self-assessment - Whether the Revenue can issue a Show Cause Notice under Section 28 for differential duty without challenging the self-assessment - HELD - The Apex Court in the case relied on by the Appellant was concerned with a claim of refund under Section 27, where re-assessment is not permitted nor can conditions of exemption be adjudicated - Non-payment of duty during self-assessment is governed by Section 28, which deals with recovery of duties not levied or not paid and is entirely different from the refund provisions under Section 27 - Section 28(1) enables recovery where exemption has been wrongly availed. The coordinate Bench has held that a clearance order cannot debar the issue of a show cause notice. There is no bar in the issuance of a Show Cause Notice under Section 28 for demanding differential customs duty without challenging the self-assessment of goods - The contention of the Appellant is rejected - Classification of electric two-wheeler imported in CKD condition without battery pack and charger - Rule 2(a) of the General Rules for the Interpretation - Appellant declared the goods as e-Bike in CKD condition with all pre-assembled essential parts and components under CTH 87116020, whereas the Adjudicating Authority held that the goods retained the essential character of a complete vehicle - Whether the goods imported without certain components possess the essential character of a complete vehicle and are classifiable accordingly - HELD - Rule 2(a) is an expansion rule and prevents classification from being defeated merely because an article arrives incomplete, unfinished or knocked down, provided the conditions are met at the time and in the condition in which the goods are presented to Customs. The decisive inquiry is the identity and character of the goods as presented for assessment - The HSN Explanatory Notes for Chapter 87 state that an incomplete or unfinished vehicle is classified as the corresponding complete vehicle provided it has the essential character of the latter, as for example a motor vehicle not yet fitted with wheels, tyres and battery. Battery pack and charger, even though not imported, are precisely the components cited in the HSN Notes which do not affect the essential character of the imported goods. The Appellant itself declared the goods as e-Bike in CKD condition and not as parts - The goods possess the essential characteristics of a complete vehicle and satisfy Rule 2(a), and the classification under CTH 87116020 is upheld - Eligibility for concessional rate under Sl. No. 531A(1) of Notification No.50/2017-Cus and alternative claim under Sl. No. 531A(2) - Appellant imported electric two-wheeler kits in knocked down condition and claimed the concessional rate, but the battery pack, charger and electric compressor were not imported - Whether the Appellant is eligible for the benefit of the Notification and the alternative entry - HELD - The exemption is available to electrically operated motor cycles imported in knocked down condition containing all the necessary components, and it is an admitted fact that the battery pack, charger and electric compressor were not imported. The benefit under the Notification cannot therefore be extended to the Appellant - The alternative exemption under Sl. No. 531A(2) was not claimed at the time of import, and a notification benefit not claimed at the time of filing of the Bill of Entry cannot be entertained later, as held by the Tribunal on identical facts - The Appellant is not entitled to the benefit of the Notification, and the demand is upheld - Confiscation under Section 111(m) and penalty under Section 112(a)(ii) of the Customs Act, 1962 where no redemption fine was imposed - Appellant contended that since the goods were duly declared, there was no mismatch with the entry made, and that penalty falls if confiscation is set aside as no redemption fine was imposed - Whether the penalty imposed can be set aside on the ground that no redemption fine was imposed - HELD - Confiscation and redemption fine are separate actions and are legally distinct outcomes. The Tribunal has upheld the Order-in-Original in an identical case of confiscation without imposition of redemption fine. There is no reason to differ from those findings - The confiscation and penalty are upheld, and the appeal is dismissed.
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