The Madras High Court has ruled that Anti-Dumping Duty (ADD) prescribed on castings used in Wind Operated Electricity Generators cannot be extended to the entire gear box or equipment in which such castings are incorporated. 

The bench of Justice Hemant Chandangoudar has observed that the statutory notification specifically covers castings, including castings forming part of a sub-assembly, equipment or component, but does not authorise levy of duty on the value of the entire equipment or component. Customs cannot extend the anti-dumping levy beyond the specific goods covered by the notification and direct acceptance of self-assessment and release of bond and bank guarantees.

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The Court further ordered cancellation and release of the bond and bank guarantees furnished towards the differential duty assessed on the gear boxes. 

The dispute concerned the import of Gear Boxes for 750/57 Wind Turbine Generator and Castings for Gear Boxes, falling under Customs Tariff Heading 84834000 and imported from China.

The Customs Department relied upon Notification No. 42/2017-Customs (ADD) dated August 30, 2017, which provides for definitive Anti-Dumping Duty on castings for Wind Operated Electricity Generators originating in or exported from China.

The importer contended that the notification imposed duty only on the castings and not on the gear boxes as a whole. Accordingly, it argued that the Department had no statutory authority to impose ADD on the total value of the imported gear box merely because castings formed part of it. 

The matter had earlier undergone reassessment under Section 17(4) of the Customs Act, 1962. By an order dated July 30, 2021, the Customs authorities concluded that the gear boxes and castings were primarily in the form of castings and that Anti-Dumping Duty was leviable under Notification No. 42/2017-Customs (ADD).

The importer challenged the assessment on the ground that the order had been passed without providing an opportunity of hearing. The Madras High Court, in earlier proceedings, set aside the order and remanded the matter for fresh consideration after granting an opportunity of hearing.

Following the remand, the goods were provisionally reassessed and the Bill of Entry was eventually finalised through the impugned order dated December 29, 2022. 

Before the High Court, the importer emphasised that the imported goods consisted of two distinct items—gear boxes and castings. According to the importer, Notification No. 42/2017 specifically contemplated a levy on castings and did not authorise Customs to impose ADD on the complete gear box.

Reliance was placed on a CESTAT, Chennai decision dated November 4, 2025, in Customs Appeal No. 40917 of 2017, in which the Tribunal examined the same notification.

The CESTAT had held that although the notification covers castings even when they form part of a sub-assembly, equipment or component, the levy remains confined to the castings themselves and cannot be extended to the entire equipment or component. 

The importer also pointed out that in subsequent imports of the same products from the same manufacturer, Customs itself had levied Anti-Dumping Duty only on the castings while accepting the importer’s self-assessment for the gear boxes. 

The Customs Department, however, defended the assessment by arguing that the castings formed part of the gear boxes and that the importer was effectively attempting to avoid Anti-Dumping Duty on the gear boxes by importing the castings and gear boxes separately.

The Department contended that Notification No. 42/2017 covered castings used in or forming part of equipment intended for Wind Operated Electricity Generators and therefore the levy on the imported goods was justified. 

The central issue before the High Court was therefore whether the notification authorised Customs to impose Anti-Dumping Duty on the gear box as a whole, or only on the castings forming part of the gear box. 

The High Court examined the origin and language of Notification No. 42/2017-Customs (ADD).

The Court noted that the designated authority, through its recommendation dated July 28, 2017, had recommended levy of Anti-Dumping Duty on castings. The recommendation was accepted and the notification dated August 30, 2017 was subsequently issued.

Serial No. 1 of the notification provides for levy of Anti-Dumping Duty on Castings for Wind Operated Electricity Generators. 

Importantly, the notification contains a note explaining the expression “Castings for Wind Operated Electricity Generators”. The definition includes castings for windmills or wind turbines whether machined or unmachined, in raw, finished or sub-assembled form, or as a part of a sub-assembly, equipment or component meant for Wind Operated Electricity Generators.

The Customs Department relied heavily on this extended wording to justify its levy. However, the High Court found that the wording did not transform the entire equipment or component into the subject goods for the purpose of the levy.

The High Court placed considerable reliance on the earlier CESTAT decision dated November 4, 2025.

The Tribunal had examined the significance of the notification covering castings in different forms, including where they exist as part of a sub-assembly, equipment or component.

According to the Tribunal’s interpretation, the notification permits levy on castings even when they form part of a sub-assembly, but that does not mean that the entire sub-assembly, equipment or component becomes liable to the levy.

The High Court specifically noted the Tribunal’s conclusion that, where castings are incorporated into another component or equipment, duty may be imposed on the casting, but not on the equipment or component as a whole. 

A significant factor in the High Court’s decision was that the Customs Department had not challenged the CESTAT order dated November 4, 2025.

The High Court therefore observed that the CESTAT’s interpretation of Notification No. 42/2017 had attained finality and was binding on the Customs authorities in relation to the issue.

The Court also took note of the subsequent Bills of Entry produced by the importer. Those documents showed that when the same products were imported from the same supplier subsequently, Anti-Dumping Duty was imposed only on the castings and not on the gear boxes. The Court considered this as further support for the importer’s case. 

The High Court concluded that Customs was not justified in extending the Anti-Dumping Duty to the gear boxes as a whole.

The Court held that the final assessment, insofar as it treated the gear boxes themselves as liable to Anti-Dumping Duty, lacked statutory authority and therefore could not be sustained. 

The Court further directed Customs to cancel and release the bond and bank guarantees furnished towards the differential duty assessed on the gear boxes.

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