In a noted ruling, the Customs, Excise & Service Tax Appellate Tribunal, Chennai ( CESTAT ) held that camshaft assemblies imported by Hyundai are eligible for Basic Customs Duty (BCD) Exemption since the Country of Origin Certificate (COO) classification is at 6 digit level and duly covers the imported goods.
The decision was rendered by CESTAT while hearing multiple Customs Appeals filed by Hyundai Motors India Ltd. (Hyundai), Kanchipuram, a prominent manufacturer of passenger motor cars, against the Commissioner of Customs and vice versa. Hyundai imports various parts and accessories for use in their passenger motor cars and is involved in a number of taxation processes to facilitate their business.
The Directorate of Revenue Intelligence (DRI), on the basis of intelligence received by them, alleged that Hyundai had misclassified various goods imported by them to illicitly avail Basic Customs Duty (BCD) exemption in light of exemption Notification No. 152/2009-Customs dated 31.12.2009. The Notification provides Exemption of Customs duty on certain goods when imported into India from the Republic of Korea.
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One of the key issues before CESTAT was to determine the eligibility for customs duty exemption on Camshaft Assembly imported by Hyundai under the Customs Tariff Heading (CTH) 84831091, while the Customs sought to reclassify the Camshaft Assembly to CTH 84831099.
Commissioner P. Narasimha Rao, appearing for the Revenue contended before CESTAT that the Importer had accepted the proposed reclassification of the imported camshaft assembly by means of reply letter, but challenged the issue pertaining to the eligibility of the goods to be exempt from duty.
While the Appellant agreed with the reclassification of Camshaft Assembly under CTH 84831099, they maintained the stance that the goods were eligible for exemption since the COO Certificate was at 6-digit level as is the global standard laid down for member countries of the World Customs Organization (WCO).
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The two-member Bench of CESTAT, Chennai comprising P. Dinesha, Judicial Member and M. Ajit Kumar, Technical Member observed that a concessional rate of basic customs duty exemption have been proposed for the impugned goods by means of the COO certificate in accordance with in-force Bilateral Free-Trade Agreement (FTA).
In light of the overarching nature of the Bilateral FTA, the Customs, Excise & Service Tax Appellate Tribunal, Chennai held that Hyundai have already accepted the reclassification of the CTH and the goods still remain eligible for exemption as the COO Certificate at 6 digit level covers the disputed goods.
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