The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that when parts of E-Rickshaw are imported and assembled into E-Rickshaw, the goods are liable to be classified under CTH 8703 9000 as complete E-Rickshaw in CKD/SKD condition and not as parts and accessories of Automobiles falling under CTH 8708 9900.
The Bench of Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya, (Technical Member) has observed that the impugned components imported are essential components of the E-Rickshaw. As per HSN Explanatory Notes to Chapter 87 read with Rule 2(a) of General Interpretative Note for HSN classification, the correct classification of the impugned goods is CTH 8703 9000.
The appellant/assessee imported a converter, charging socket, connection box, On-off switch, digital speedometer, alarm system, throttle with left grip, controller, left right switch, hand brake with wire, handle T, lamp ear, shocker, arm rest and motor and these form the essential components of the E-Rickshaw. The appellant had imported each of these items in the same number that is in equal numbers e.g., in a Bill of Entry, the appellant imported 1000 sets of the essential items.
The HSN Explanatory Notes for the Chapter 87 that “An incomplete or unfinished vehicle is classified as the corresponding complete or finished vehicle provided it has the essential character of the latter”. As per Rule 2 (a) of General Rules of Interpretation for HSN classification, once the essential character is achieved then the impugned goods should be classified as complete finished item.
The assessee contended that the goods were imported alone do not constitute automobile i.e. E-rickshaw. They have procured many of the components domestically in India. Both imported goods and domestically procured goods are put together to make a complete E-rickshaw. They have argued that articles must be presented together to be considered as complete product.
The department contended that appellant had imported the converter, charging socket, connection box, On-off switch, digital speedometer, alarm system, throttle with left grip, controller, left right switch, hand brake with wire, handle T, lamp ear, shocker, arm rest and motor and these form the essential components of the E-Rickshaw. The appellant had imported each of these items in the same number that is in equal numbers for e.g. in the Bill of Entry No. 3557682 dated 07.06.2019, the appellant imported 1000 sets of the essential items. Thus, it appears that the appellant had imported most of the E-Rickshaw components.
The tribunal noted that there were some parts such as battery etc. which were procured domestically by the Appellant. Combining both imported and domestically procured items the E-Rickshaw was assembled.
The CESTAT took a view that the imported components give the essential character of E-Rickshaw particularly, in view of the ICD, TKD Order dt. 12.03.2014 and Rule 2 (a) of General Rules of Interpretation for HSN classification.
The Tribunal opined that the impugned goods imported in 18 consignments (Bill of Entry), are indeed E-rickshaw parts that were imported to assemble and make an E-rickshaw and it’s a case where E-rickshaw was imported in completely knocked down condition.
Case Details
Case Title: M/s Y. C. Electric Vehicle vs Principal Commissioner, Customs (Import), New Delhi (Icd Tkd)
Case No.: Customs Appeal No. 51965 of 2022
Date: 10.02.2025
Counsel For Appellant: Shri Rajat Bose, Shri Ankit Sachdeva, Advocates
Counsel For Respondent: S.K. Rahman, Authorized Representative
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