“Enormous Push to Environmentally Safer and Friendly Vehicles”: Delhi HC reduces CESTAT Pre-Deposit to ₹5.5 Lakh on E-Rickshaw Import Classification [Read Order]

The High Court of Delhi, in a matter concerning the classification of imported e-rickshaw consignments, reduced the pre-deposit to ₹5.5 lakh and directed Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) to hear the petitioner’s and its Director’s appeals on merits.

Soni E Vehicle Private Limited, petitioner-assessee, filed a petition under Article 226 of the Constitution of India seeking to quash the office order dated 12th March 2014 issued by the Commissioner of Customs, ICD Tughlakabad, New Delhi. The order aimed to clarify how many imported components would constitute a complete vehicle under the Motor Vehicles Act, 1988.

The petitioner, engaged in manufacturing and importing e-rickshaws, had filed shipping bills between 2015 and 2019 for importing components for manufacturing and sale in India. Two consignments were intercepted, and a Show Cause Notice was issued on 13th August 2019. A seizure memo was later issued on 25th February 2019, stating that the goods were liable to confiscation under Section 111 of the Customs Act, 1962.

The Customs Department alleged that the imports included almost all major parts of an e-rickshaw, which together formed a complete vehicle rather than just components. An Order-in-Original dated 20th August 2020 found that the consignments contained integrated devices such as different axles, transmission systems, brake drum assemblies, and chassis, amounting to 142 incomplete e-rickshaws in unassembled condition. The goods were reclassified under CTSH 87038040 instead of the classifications declared by the petitioner.

The Order-in-Original dated 20th August 2020 reclassified the petitioner-assessee’s imports under CTSH 8703 9010 (up to 31st December 2016) and CTSH 8703 8040 (thereafter). It ordered confiscation of goods covered under six live Bills of Entry worth ₹1.18 crore with a redemption fine of ₹12 lakh, and goods under 13 previous Bills of Entry worth ₹2.65 crore with a fine of ₹27 lakh.

The duty on the six live Bills of Entry was increased from ₹56.71 lakh to ₹1.96 crore, and a demand of ₹3.58 crore in short-paid duty for the 13 previous Bills of Entry was confirmed with interest.

Penalties included ₹13.90 lakh and ₹3.58 crore on the petitioner-assessee, ₹45 lakh on its Managing Director, ₹10 lakh on an employee of the Customs Broker, and ₹40 lakh on the Customs Broker firm.

The petitioner suffered financial loss due to the seizure of consignments and filed an appeal before CESTAT on 17th February 2021 without making the required pre-deposit. Despite being given time after a defect notice on 9th March 2021, the petitioner did not deposit the determined amount of ₹10,74,025. As a result, CESTAT dismissed the appeal for non-compliance.

The petitioner then approached the High Court seeking to quash the 12th March 2014 office order of the Commissioner of Customs and to direct CESTAT to hear the case without or with a reduced pre-deposit.

The petitioner’s counsel claimed that the 2014 order created confusion about the nature of the goods, while the respondent argued that the imports were CKD/SKD units attracting 125% duty.

Justice Prathiba M.Singh and Justice Shail Jain considered the 12th March 2014 office order, which stated that five key components: transmission, motor, axle, chassis, and controller together made a complete e-rickshaw in CKD/SKD form, classifiable under heading 8703. If along with the motor, any two of these parts were missing, the goods would be treated as parts under heading 8708 and not attract the Motor Vehicles Act, 1988.

After examining photographs of the imported goods, the Court noted that CESTAT needed to decide whether the consignments were components or complete e-rickshaws. It was informed that the goods were still lying confiscated.

Considering the government’s push for eco-friendly vehicles and the petitioner’s financial constraints, the Court reduced the pre-deposit to ₹5.5 lakh, to be paid within a month from 31st July 2025.

The Division Bench of the High Court thus directed CESTAT to hear the petitioner’s and the Director’s appeals on merits against the Order-in-Original dated 20th August 2020, including the validity of the 2014 order, and to decide the case by 15th November 2025.

The matter was listed before CESTAT on 4th September 2025, and the petition was disposed of with the clarification that the Court’s observations would not affect the final outcome.

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