Commissioner of customs Vs Toyota Kirloskar Motor Pvt. Ltd. (CESTAT Chennai)
The appeal was filed by the Revenue (Commissioner of Customs) against an Order in Appeal dated June 30, 2014, passed by the Commissioner of Customs (Appeals), Chennai, concerning the respondent, Toyota Kirloskar Motor Pvt. Ltd. The core issue involved the classification of imported goods described as “Side Outer Panels for Motor Vehicle” and a resulting demand for short-levy of customs duty.
The Classification Dispute
The respondent, Toyota Kirloskar Motor Pvt. Ltd., initially classified the imported Side Outer Panels under Heading 7326 1910 as “other articles of iron and steel – other for automobiles and earth moving equipment,” which attracted a Basic Customs Duty (BCD) of 5%.
The Department (Revenue) sought to re-classify the goods under Tariff heading 8708 9900 as “other parts and accessories for motor vehicles,” arguing this attracted a higher duty rate. The Revenue contended that, as per HSN Notes, doors and parts are classifiable under 8708 9900. The Department argued that the goods are stamped metal panels of specific design for use only as a door and have attained the essential character of a motor vehicle door. They relied on Rule 2(a) of the General Rules for the Interpretation (GRI) of the Import Tariff Act, 1975, which includes incomplete or unfinished articles in the heading for the complete article, provided they have the essential character of the finished article. This re-classification resulted in a short-levy demand of Rs. 71,08,910/-.
