Continental Automotive Brake Systems India Private Limited Vs Commissioner of Customs (CESTAT Delhi)
Customs Duty Exemption Rejected as Imported Brake System Parts Were Capable of Use in Vehicles; CESTAT Upholds Duty Demand Because ‘Suitable for Use’ Includes Parts Used in ABS Systems; Imported ABS Motors and Sensors Not Eligible for Concessional Duty Due to Vehicle Use Connection; CESTAT Applies ‘Part of Part Is Part of Whole’ Principle to Deny Customs Exemption.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi, partly allowed the appeal filed by Continental Automotive Brake Systems India Private Limited against the order denying concessional customs duty under Notification No. 50/2017-Cus and reclassifying imported Pressure Transducers/Sensors under Tariff Item 90318000.
The appellant manufactures Anti-lock Brake Systems (ABS), Electronic Stability Control Systems (ECS), and brake sensors supplied to automobile manufacturers in India. During the period from 1 April 2021 to 30 September 2022, it imported ABS Motors, MK 100 MAB Motors, Pressure Transducers/Sensors, and Brake Light Sensors while availing concessional customs duty under Sl. Nos. 485A and 581B of Notification No. 50/2017-Cus. The appellant claimed that the imported goods were components used in manufacturing ABS/MAB/ECS systems and were not directly usable in motor vehicles.
Following amendments made through Notification No. 21/2021-Cus dated 31.03.2021, the Directorate of Revenue Intelligence alleged that the imported goods were “suitable for use” in motor cars and motorcycles and therefore excluded from the exemption. A show cause notice sought denial of exemption and recovery of differential duty for 179 Bills of Entry. The Commissioner confirmed differential customs duty of Rs. 7.24 crore along with interest and penalty, and upheld classification of Pressure Transducers/Sensors under CTH 90318000.
