Parts of Tricycle Imported Separately cannot be Clubbed for Classification Purpose: CESTAT Quashes Appeal Filed for Value Enhancement [Read Order]

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Big Bull Traders Pvt Ltd (Appellant 1) is a manufacturer of Tricycle and holds ICAT certificate issued by the designated agency. They are authorized to manufacture Tricycles operated by battery under Motor Vehicle Rules. Baba Baidyanath (Appellant 2) is a Trading Company dealing in parts of Tricycle.

The Appellant 1 imported some parts of the Tricycle and procured some parts from Appellant 2, which were imported by him separately. The allegation of the department is that both the parts imported by Appellant 1 and Appellant 2 together would constitute a fully assembled Tricycle.

Accordingly Show Cause Notice was issued to the Appellants 1 and 2 proposing to club both the imports together and to assess the goods as fully finished Tricycles, instead of parts of tricycles, as claimed by the Appellants.

The counsel for the appellants contended that matching of the spare parts imported by both of them together is of no consequence since both these imports together would not make Tricycles in Completely Knocked Down (CKD) condition There is no expert evidence submitted by the Department to establish that the import by both the Appellants together would make any Tricycle in CKD condition.

A Two-Member Bench of the Tribunal comprising PK Choudhary, Judicial Member and K Anpazhakan, Technical Member concluded that “We observe that the Notice proposes to adopt the value of Rs 33,000 per Tricycle as per the assessable value available for fully finished tricycle in the National Import Database (NIDB) data. There is no evidence available to establish that the goods for which value is available in NIDB and the impugned goods imported by the Appellants together are similar goods. Hence, we hold that the adjudicating authority has rightly rejected the value of 33,000 proposed in the Notice. Accordingly, we hold that the department’s appeal for value enhancement is liable for rejection.” “The goods imported by both the Appellants cannot be clubbed for classification purpose. The goods imported by the appellants were not in CKD condition and therefore goods cannot be classified under Customs Tariff Heading (CTH) 87038040. The goods are rightly classifiable under CTH 87089900” the Bench noted.

To Read the full text of the Order CLICK HERE

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