2026-VIL-1814-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Classification of Protector Tube of brake hose assemblies under CTH 40091100 or CTH 39172310 - Appellant imported brake hoses and other automobile brake components and declared Protector Tube under CTH 40091100 - Final Audit Report proposed classification under CTH 39172310, and the demand of differential duty was confirmed - Department relied upon the catalogue and photographs of the supplier showing that the Protector Tube is made of 100% PVC, while the Appellant contended that no testing report was produced - Whether Protector Tube is classifiable under CTH 40091100 as declared by the Appellant or under CTH 39172310 as held by the Department - HELD - The controversy in classification disputes must be resolved by relying upon the Harmonised System of Nomenclature and the Explanatory Notes, which are binding guidance unless a contrary finding is found within the First Schedule of the Tariff Act, as held by the Hon'ble Supreme Court. Under both the headings, the constituent material of the goods is the relevant criterion, since a tube made of PVC is classifiable under CTH 39172310 and a tube made of vulcanized rubber falls under CTH 40091100. The reliance of the Department on the catalogue and photographs was never disputed by the Appellant, and those documents sufficiently deal with the constituents and other details and declare the product to be a 100% PVC tube. The absence of a testing report does not affect the Department adversely, as the Appellant produced no other document to falsify the catalogue - The impugned order rightly held mis-declaration, the Protector Tube is classifiable under CTH 39172310 and the demand of differential duty is upheld - Denial of benefit of Notification issued pursuant to the ASEAN Trade Agreement on reclassification of Protector Tube - Appellant availed the benefit of the Notification on the strength of a Certificate of Origin declaring the goods under CTH 40091100, and the benefit was denied after the goods were held classifiable under CTH 39172310 - Whether the benefit of the Notification can be extended to goods held classifiable under CTH 39172310 - HELD - The Appellant had claimed the benefit by declaring the goods under CTH 40091100. Since the goods have been held to be classifiable under CTH 39172310, the benefit of the Notification cannot be extended to these goods - The benefit has rightly been denied and the order to that extent is upheld - Classification of Bracket used in manufacture of brake hose assemblies under CTH 83025000, CTH 73269099 or CTH 87089900 - Appellant declared the Bracket as parts of automobile under CTH 83025000 and CTH 73269099, whereas the Department proposed classification under CTH 87089900 on the ground that it forms an integral part of the brake assembly used in motor vehicles - Appellant did not contest that the goods are not of general purpose use, and had itself declared the goods as parts of automobile in the import documents - Whether the Bracket is classifiable under CTH 83025000 or CTH 73269099 as declared by the Appellant or under CTH 87089900 as held by the Department - HELD - Heading 8302 covers base metal mountings and fittings, Heading 7326 is a residuary entry for other articles of iron or steel, and Heading 8708 covers parts and accessories of motor vehicles of Headings 8701 to 8705. Section Note 1(g) of Section XV excludes articles of Section XVII from its ambit, and Section Note 3 of Section XVII provides that references to parts or accessories in Chapters 86 to 88 apply only to parts suitable for use solely or principally with the vehicles of those Chapters. As per General Rule 3, a part answering to a description in two or more headings is to be classified under the heading corresponding to its principal use. There was no evidence that the goods are excluded by the provisions of Section XVII, and both conditions of the Explanatory Notes to Chapter 87 stand fulfilled, namely that the goods be suitable for use solely or principally with motor vehicles and that they not be excluded by the Section Notes - The Bracket is classifiable under CTH 87089900, the Appellant had wrongly declared the goods under CTH 83025000 and CTH 73269099, and the demand of differential duty is upheld - Classification of Connector used in brake hose assemblies under CTH 3917 or CTH 8708 - Appellant declared the Connector under CTH 3917, whereas the Department held that it is a part of motor vehicles classifiable under CTH 8708 - Connectors are admittedly used in brake hose assemblies to regulate the flow of brake fluid and are specifically designed for integration into automobile brake systems - Whether the Connector is classifiable under CTH 39174000 as fittings of plastics for tubes, pipes and hoses or under CTH 87089900 as parts and accessories of motor vehicles - HELD - Chapter Note 2(t) to Chapter 39 expressly excludes parts of vehicles of Section XVII. Irrespective of the constituent material of the goods, if the goods are admittedly parts of motor vehicles, they stand excluded from Chapter 39, and this observation is sufficient to hold the declaration under CTH 3917 to be a mis-declaration. The Connectors are not generic plumbing fittings, so that even on the common parlance test they cannot be classified under CTH 39174000 - The classification under CTH 3917 is rejected and the order of the Department to that extent is upheld - Invocation of extended period of limitation under Section 28(4) of the Customs Act, 1962 and imposition of penalty on mis-classification of imported goods - Appellant contended that the documents were verified and the goods were physically examined by Customs officers so that everything was within their notice, and that a claim of classification is a mistake of understanding and belief and cannot amount to suppression - Appellant had admitted the alleged mis-declaration for all other products and voluntarily paid the differential duty, and the Department showed that the Appellant had earlier declared the goods under the same tariff headings claimed by the Department and later changed to the classifications declared in the impugned Bills of Entry - Whether the extended period was rightly invoked under Section 28(4) and whether the penalties were rightly imposed - HELD - The present being an era of self-assessment, Section 46(4) of the Customs Act, 1962 casts an obligation upon the importer to make a true and correct classification. The wrong declaration resulted in customs duty benefit to the Appellant and the outcome of the act was non-payment or short payment of customs duty. The Appellant was earlier declaring the tariff headings claimed by the Department and later changed to the alleged ones, which supports the conclusion that the wrong classification was intentional and resulted in evasion of customs duty - The extended period under Section 28(4) was rightly invoked, there is no infirmity in the penalties imposed for the same reasons, the order under challenge is affirmed and the appeal is dismissed.
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