Subash Iyappan Vs Arun Kumar Kandhan (CESTAT Chennai)
CESTAT Rejects CKD Classification Because Battery Was Not Imported With E-Scooter Parts; CESTAT Quashes Rs.156 Crore Customs Demand Due to Failure of Essential Character Test; Multiple Bills of Entry Cannot Be Clubbed to Reclassify Imports as CKD Vehicles: CESTAT; Customs Duty Demand on E-Scooter Parts Set Aside Because Goods Must Be Assessed ‘As Presented’.
The appeals before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, arose from a common Order-in-Original dated 27 January 2024 passed by the Commissioner of Customs, Chennai-II (Imports). The principal appellant, M/s. Greaves Electric Mobility Pvt. Ltd. (earlier M/s. Ampere Vehicles Pvt. Ltd.), was engaged in manufacturing electric two-wheelers in India and importing various components for such manufacture. The dispute related to imports made during the period from 20 March 2018 to 31 December 2021. The Department alleged that the appellant imported electric scooters/e-bikes in completely knocked down (CKD) condition but declared them as “parts” under Chapter Heading 8714 to avail lower customs duty, whereas they should have been classified under Heading 8711 as complete electric scooters/e-bikes in terms of Rule 2(a) of the General Rules for Interpretation (GRI).
The impugned order confirmed customs duty demand of Rs.156.45 crore under Section 28(4) of the Customs Act, along with redemption fine of Rs.16 crore, penalty of Rs.156.43 crore under Section 114A, and interest. Penalties were also imposed on company officials and the Customs House Agent.
