"1 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \n \nCUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL \nNEW DELHI \n \nPRINCIPAL BENCH-COURT NO. 4 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \n(Arising out of Order-in-Original No. 11/2022/SG/Pr. CommrICD-Import/TKD dated \n02.05.2022 passed by the Principal Commissioner of Customs, ICD (Import), TKD. New \nDelhi) \n \nM/s Y. C. Electric Vehicle \n \n \n \nAppellant \nPlot No. 1, Gali No. 11, Mundka \nNew Delhi – 110041 \n \nVERSUS \n \nPRINCIPAL COMMISSIONER, \nCUSTOMS (IMPORT) \n \n \n \n \nRespondent \nNEW DELHI (ICD TKD) \n \nAppearance: \nPresent of the Appellant: Shri Rajat Bose, Shri AnkitSachdeva, Advocates \nPresent for the Respondent: Shri S.K.Rahman, Authorized Representative \n \nCORAM: \nHON’BLE DR. RACHNA GUPTA, MEMBER (JUDICIAL) \nHON’BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) \n \n \n \n \n \n \n \n \n \nDate of Hearing: 23.10.2024 \n \n \n \n \n \n \n \n \nDate of Decision: 10.02.2025 \n \nFINAL ORDER NO. 50298/2025 \nHEMAMBIKA R. PRIYA \n \nThe appellant has filed the present appeal assailing the Order-in-\nOriginal No. 11/2022/SG/Pr. Commr./ICD-Import/TKD dated 02.05.2022 \npassed by the Principal Commissioner of Customs, ICD (Import), \nTughlakabadNew Delhi(herein after referred as ‗OIO‘). Wherein the \nadjudicating authority has ordered for reclassification of impugned goods \nand confirmed the demand of differential duty with penalty. \n\n2 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \n2. The brief facts of the case are that the appellant has imported ―converter, \ncharging socket, connection box…..‖ etc declaring them as spare parts of e-\nrickshaw under CTH of 8708 9900 vide 18Bills of Entry during the period \nMay 2019 to November 2019 following a post clearance audit of the \nAppellant‘s Business premises in April 2021, a consultative letter no. \nDLCUSADT/104/Circle-3/2021 dt. 20.04.2021 was issued to the appellant \nstating that the importer had mis-classified the imported items under CTI \n8708 9900 and paid BCD@ 15%, SWS@ 10% and IGST @28%. The \ndepartment alleged that the said items were correctly classifiable under CTI \n8703 90 00 and consequently duty payable was BCD@125%, SWS@ 10%, \nand IGST @28%. Consequently, a show cause notice was issued and the \nimpugned order was passed. \n3. Considering the written reply to SCN from the Noticee and the \nsubmissions made by the Noticee during the Personal Hearing, the \nAdjudicating authority vide the impugned has ordered as follows:- \n”(a) The imported goods is ordered to be classified under 87039000 instead \n87089900 as classified by the importer \n(b) The impugned goods are confiscated under Section 111(m) of the Customs Act, \n1962. However, I refrain from imposing any redemption fine under Section 125 of \nthe Customs Act, 1962. \n(c) I order recovery of differential duty amounting to Rs. 14,82,28,083/- (Rupees \nFourteen crore Eighty two Lakhs Twenty eight thousand Eighty three only), \n(including Basic Customs Duty, Social Welfare Surcharges and IGST), on the \nimpugned goods imported vide Bills of Entry mentioned in Annexure A' under Section \n28(1) of the Customs Act, 1962 along with Interest at appropriate rate under Section \n28AA of the Customs Act, 1962 \n(d) I impose a penalty of Rs. 1,00,00,000/- (Rupees One Crore only) upon M/s. Y. C. \nElectric Vehicle under Section 112(a)(ii) of the Customs Act, 1962. \n(e) I refrain from imposing any penalty under Section 117 of the Customs Act, 1962. \n \n4. \nThe present appeal is filed before this Tribunal against the impugned \norder. \n\n3 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \n5. \nShri Rajat Bose and Shri Ankit Sachdeva, learned Counsels for the \nappellant made the following submissions during the hearing. \na) The Bills of Entry which are orders of assessment have not been appealed \nagainst and have attained finality. Relied upon case of ITC Ltd. Versus \nCommissioner of Central Excise, Kolkata-IV \n[2019 (368) E.L.T. 216 (S.C.)] \nb) The Appellant is not importing all the essential components of E rickshaw \nand procuring major parts locally. The copies of invoices relating to local \nprocurement were submitted. The ld. Counsel relied on case of Bharat Heavy \nElectricals Ltd Vs CC [1987(28)ELT 545] \nc) Imported goods must be classified as in the manner and form in which they \nare presented before customs officials. In this context, he relied on case law \nof Advani Pleasure Cruise Co. P. Ltd. Versus Commr. ofCus. (I), NhavaSheva, \nRaigad2020 (371) E.L.T. 408 (Tri. - Mumbai) \nd) Office Order dt 12-03-2014 of ICD TKD is not applicable. Relied upon case \nlaw of Dynamo Electricals VsUoI 1995(76)ELT 41 (Guj): \ne) On 04-09-2024, the Learned counsel for the appellant prayed for and was \ngranted three weeks time to place on record the remaining four Bills of Entry \nand also to prepare a chart showing the items that have been imported by \nthe appellant against each Bill of Entry. The statement of list of such Bills of \nEntry submitted on 08-10-2024 is placed on record and taken into \nconsideration \nf) The Compilation of case laws submitted in two sets by appellant are taken on \nrecord and considered \n6. Shri S.K.Rahman, learned Authorized Representative for the Revenue has \nmade the following submissions during the hearing. \n \na) Classification Under CTH 87039000: \nAs per the HSN Explanatory Notes , incomplete or unfinished vehicles are \nclassified under the heading of their corresponding complete vehicles if they \nhave the essential character of the latter, as outlined in General \nInterpretative Rule 2(a). Examples include motor vehicles missing wheels, \ntyres, or batteries. \nLd. AR submitted that the importer has brought in complete sets of essential \nE-Rickshaw components, including converters, charging sockets, controllers, \nthrottles, motors, and more. For example, under Bill of Entry No. 3557682 \ndated 07.06.2019, 1,000 sets of these components were imported, indicating \n\n4 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \nthe intent to assemble complete E-Rickshaws. Similar patterns are noted in \nother Bills of Entry (Annexure D). \n \n \n \nb) General Rules of Interpretation: \nRule 2(a) states that incomplete or unassembled items are classified as \ncomplete if they possess the essential character of the finished article, even \nwhen imported unassembled. \nc) CBIC Circular & ICD TKD Office Order: \nThe CBIC Circular No. 55/1995-CUS specifies that incomplete, unassembled \narticles should be treated as complete if they acquire the essential character \nwhen assembled. For automobiles, examples include vehicles without \nbatteries or tyres. \nThe ICD TKD Office Order dt 12-03-2014 classifies imports of key \ncomponents—motor, axle, chassis, transmission, and controller—as complete \nvehicles under CTH 8703, provided they collectively form a functional vehicle. \nHere, all essential components are imported, enabling complete E-Rickshaw \nassembly. \nThus, the goods fall under CTH 87039000. \n \n7. Having heard both sides, the issues before us is classification issue with \nconsequent rate of duty as shown below: \n \n \nREVENUE \nAPPELANT \nCTH \n8703 9000 \n8708 9900 \nCTH \ndescription \nElectric Motor vehicles \n \nParts & accessories \nof automobiles \nDescription of \ngoods \ne \n– \nrickshaw \nin \nSKD/CKD condition \nspare \nparts \nof \ne \nrickshaw \nRoD BCD \n125%+10%+28%= \n172.5% \n15%+10%+28%= \n48.7% \n \n8. \nIn the instant case, it is seen that the appellant had imported \ncomponents \nof \nthe \nE-Rickshaw \ni.e.converter. \ncharging \nsocket, \nconnection box, On-off switch, digital speedometer, alarm system, \nthrottle with left grip, controller, left right switch, hand brake with wire, \nhandle T, lamp ear, shocker, arm rest and motor. It is to be examined \nwhether these components imported are essential components of the E-\n\n5 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \nRickshaw. \n9. \nThe learned Counsels for the appellant have submitted that the \nimpugned goods that were imported alone do not constitute automobile \ni.e. E-rickshaw. They have procured many of the components \ndomestically in India . Both imported goods and domestically procured \ngoods are put together to make a complete E -rikshaw. They have \nargued that articles must be presented together to be considered as \ncomplete product. They have stated that out of 18 Bs/E, there are 10 \nBs/E against which only 1 or 2 items have been imported. \n \n10. The learned Authorized Representative for the Revenue has made \nsubmissions that the appellant had imported converter. charging socket, \nconnection box, On-off switch, digital speedometer, alarm system, \nthrottle with left grip, controller, left right switch, hand brake with wire, \nhandle T, lamp ear, shocker, arm rest and motor and these form the \nessential components of the E-Rickshaw. Ld. AR has drawn our \nattention to the fact that the appellant had imported each of these \nitems in the same number that is in equal numbers for e.g. in the Bill of \nEntry No. 3557682 dated 07.06.2019, the appellant imported 1000 \nsets of the above mentioned essential items. Thus, it appears from the \nabove that the appellant had imported most of the E-Rickshaw \ncomponents. \n \n11. After considering the arguments of both the counsels on this issue, \nwe have examined to note as to what the common parts of E Rickshaw are \nthat would constitute a complete E Rickshaw. \n\n6 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \nTABLE-1 \n \n \n \n \n \nMOTOR \nREAR AXLE \n \nCONTROLLER \n \nHYDRAULIC SHOCKER \n \n \n \n \n \nBRAKE DRUM \n \nCHARGER \n \nHORN (FRONT/REVERSE) \n \nSPEEDOMETER \n \n \n \n \n \nWHEEL RIM \n \nTHROTTLE \n \nLED HEADLIGHT \n \nT SET \n \n \n \n \n \nE RICKSHAW WIRING \n \nE RICKSHAW CABLES \n& BRAKE CABLES \n \nCONVERTERS \n \nE RICKSHAW TYRES \n \n \nThe components listed in the above are the most common parts and \ncomponents of E Rickshaw as noted from websites, which are essential for \nmaking up an E Rickshaw. \n \n12. The \nlearned \nAuthorized \nRepresentative \nin \nhis \nsubmissions \ndemonstrated as to how the parts of E Rickshaw were imported, which is \nreproduced below:- \nTABLE-2 \n \nS. \nPARTS \nQUAN\nTITY \nPARTS \nQUAN\nTITY \nPARTS \nQUAN\nTITY \nPARTS \nQUAN\nTITY \nPARTS \nQUAN\nTITY \nPARTS \nQUAN\nTITY \nN\nO \n(Pcs.) \n(Pcs.) \n(Pcs.) \n(Pcs.) \n(Pcs.) \n(Pcs.) \n\n7 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \nB/\nE \nN\no. \nan\nd \nda\nte \n317563\n2 \n10.05.\n2019 \n321846\n2 \n14.05.\n2019 \n355768\n2 \n07.06.\n2019 \n383616\n3 \n27.06.\n2019 \n422763\n3 \n26.07.\n2019 \n461977\n7 \n23.08.\n2019 \n1 \nConvert\ner \n1000 \nConvert\ner \n1000 \nConvert\ner \n1000 \nConvert\ner \n1000 \nConvert\ner \n1000 \nConvert\ner \n1000 \n2 \nChargin\ng \nSocket \n1000 \nChargin\ng \nSocket \n1000 \nChargin\ng \nSocket \n1000 \nChargin\ng \nSocket \n1000 \nChargin\ng \nSocket \n1000 \nChargin\ng \nSocket \n1000 \n3 \nConnec\ntion \nBox \n1000 \nConnec\ntion \nBox \n1000 \nConnec\ntion \nBox \n1000 \nConnec\ntion \nBox \n1000 \nConnec\ntion \nBox \n1000 \nConnec\ntion \nBox \n1000 \n4 \nDigital \nSpeedo\nmeter \n1000 \nDigital \nSpeedo\nmeter \n1300 \nOn/Off \nSwitch \n1000 \nDigital \nSpeedo\nmeter \n1000 \nDigital \nSpeedo\nmeter \n1000 \nDigital \nSpeedo\nmeter \n1000 \n5 \nAlarm \nSystem \n1000 \nLeft \nRight \nSwitch \n1000 \nDigital \nSpeedo\nmeter \n1000 \nAlarm \nSystem \n1000 \nAlarm \nSystem \n1000 \nAlarm \nSystem \n1000 \n6 \nOn/Off \nSwitch \n1000 \nThrottle \nwith left \ngrip \n1000 \nAlarm \nSystem \n1000 \nOn/Off \nSwitch \n1000 \nOn/Off \nSwitch \n1000 \nOn/Off \nSwitch \n1000 \n7 \nLeft \nright \nswtich \n1000 \nOn-off \nswitch \n1000 \nThrottle \nwith left \ngrip \n1000 \nLeft \nRight \nSwitch \n1000 \nLeft \nRight \nSwitch \n1000 \nLeft \nright \nswtich \n1000 \n8 \nControl\nler \n100 \nControl\nler \n1300 \nControl\nler \n1000 \nControl\nler \n1000 \nControl\nler \n1000 \nControl\nler \n1000 \n9 \nThrolltle \nwith left \ngrip \n1000 \nHandbr\nake with \nwire \n450 \nLeft \nRight \nSwitch \n1000 \nThrottle \nwith left \ngrip \n1000 \nThrottle \nwith left \ngrip \n1000 \nThrolltle \nwith left \ngrip \n1000 \n10 \nHand \nbrake \nwith \nwire \n500 \nFront \nShocker \n1000 \nHand \nBrake \nwith \nwire \n500 \nHand \nBrake \nwith \nwire \n500 \nShocker \n1000 \nHand \nbrake \nwith \nwire \n500 \n11 \nShocker \n1000 \nHandle \nT \n1000 \nHandle \nT \n1000 \nShocker \n1000 \nLamp \nEar \n1000 \nShocker \n1000 \n12 \nHandle \nT \n1000 \nLamp \near \n1000 \nLamp \nEar \n1000 \nHandle \nT \n1000 \nHandle \nT \n1000 \nHandle \nT \n1000 \n13 \nLamp \near \n1000 \nMud \nGuard \n1000 \nShocker \n1000 \nLamp \nEar \n1000 \nRotor \nfor \nMotor \n200 \nLamp \near \n1000 \n14 \nArm \nRest \n1000 \nMotor \n1300 \nArm \nRest \n1000 \nArm \nRest \n1000 \nCover \nfor \nmotor \n200 \nArm \nRest \n1000 \n15 \nMotor \n1000 \n \n \nMotor \n1000w \n1000 \nMotor \n1000w \n1000 \nMotor \n1000W \n1000 \nMotor \n1003 \n16 \n \n \n \n \n \n \n \n \nMagnet \nfor \nmotor \n200 \n \n \n17 \n \n \n \n \n \n \n \n \nBarring \nfor \nmotor \n200 \n \n \n18 \n \n \n \n \n \n \n \n \nAxle for \nmotor \n200 \n \n \n19 \n \n \n \n \n \n \n \n \nHall \nplate for \nmotor \n200 \n \n \nTABLE 2 \n \n \n13. A comparison of the contents of Table-2 with the contents of the \nwith Table 1, it is clear that most of the common & essential parts of E-\nRickshaw have been imported . We are convinced from the above tables \nthat that the appellant had indeed imported most of the E-Rickshaw \ncomponents which by merely assembling these components, an E-\n\n8 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \nRickshaw can be generated . \n \n14. We find that the HSN Explanatory Notes for the Chapter 87 states \nas follow: \n \n“An incomplete or unfinished vehicle is classified as the corresponding complete or \nfinished vehicle provided it has the essential character of the latter [see \nInterpretative Rule 2 (a)], as for example: (A) A motor vehicle, not yet fitted with \nthe wheels or tyres and battery, (B) A motor vehicle not equipped with its engine \nor with its interior fittings, and (C) A bicycle without saddle and tyres”. \n \n15. In the instant case, we note that the appellant have imported \ncertain components of the E-Rickshaw i.e.converter. charging socket, \nconnection box, On-off switch, digital speedometer, alarm system, \nthrottle with left grip, controller, left right switch, hand brake with wire, \nhandle T, lamp ear, shocker, arm rest and motor. We also note that \neach of these items are in imported equal numbers, as is evident from \nthe Table 2 above. Thus, it is seen from the above components, an E-\nRickshaw can be assembled, even though it might be in an incomplete \nE-Rickshaw. \n16. We take note of the HSN Explanatory Notes which categorically \nstates that an incomplete or unfinished vehicle is classified as the \ncorresponding complete or finished vehicle, provided it has the essential \ncharacter of the latter. As per the HSN Explanatory Notes, even though \nparts of E-Rickshaw falling under CTH 8708 9900 were imported, on \nassembly, the said e-rickshaw is liable to be classified as complete or \nfinished vehicle under CTH 8703 9000 provided it has the essential \ncharacter of the latter. We now examine whether the incomplete or \nunfinished vehicle has the essential character of the complete or finished \nvehicle. The learned counsels for the appellant has submitted that they \n\n9 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \nhave procured many of the components domestically in India. The Rule \n2(a) of General Rules of Interpretation for classification under HSN is \nreproduced here under:- \n ―2. (a) Any reference in a heading to an article shall be taken to include a \nreference to that article incomplete or unfinished, provided that, as entered, \nthe incomplete or unfinished article has the essential character of the \ncomplete or finished article. It shall also include a reference to that article \ncomplete or finished (or falling to be classified as completed or finished by \nvirtue of this rule), entered unassembled or disassembled. \n \nIt says that an incomplete or unfinished article can be classified as \na complete article provided the incomplete or unfinished article has the \nessential character of the complete or finished article. In the instant \ncase some parts of E-Rickshaw are imported and some parts are \ndomestically procured . The question arises which are the major \ncomponents/assemblies that provide essential characteristics to make a \ncomplete E-rickshaw in CKD SKD condition. \n17. \nLearned Authorized Representative has drawn our attention to the \noffice order dated 12.03.2014 is shed by port of import i.e. Principal \nCommissioner, Customs (Import) New Delhi (ICD TKD). It was \nsubmitted \nthat \na \nCommittee \nwas \nconstituted \nin \n2014 \nby \nthe \nCommissioner of Customs ICD TKD to decide as to what percentage of \ncomponents/assemblies combine together make E-rickshaw in CKD SKD \nas per Rule 2(a) of the Interpretative Rules to the First Schedule to the \nCustoms Tariff Act, 1975. On the basis of recommendations of this \nCommittee, \nan \nOffice \nOrder \ndt \n12-03-2014 \nfrom \nC.No. \nVIII/ICD/TKD/6AG/104/2013/pt was issued, which is reproduced as \nbelow: \n \n \n“C.No. VIII/ICD/TKD/6AG/104/2013/pt Dated 12-3-2014 \n\n10 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \nOFFICE ORDER \nA Committee was constituted by Commissioner of Customs ICD TKD New \nDelhi comprising of following below mentioned officers \nto decide up as to what percentage of components/assemblies combine \ntogether make E-rickshaw in CKD SKD as per Rule 2(a) of the \nInterpretative Rules to the First Schedule to the Customs Tariff Act, 1975. \n(1) Shri Karamvir Singh, Joint Commissioner of Customs, SUR \n(2) Shri Gauri Shankar Sinha, Deputy Commissioner of Customs, AG \n(3) Shri Vikash, Deputy Commissioner of Customs Import Seed \n(4) Shri Nalin Kumar, Deputy Commissioner of Customs Group V \n(5) Shri Prashant Kumar Jha, Deputy Commissioner of Customs SUB, and \n(6) Shri AbhinavYadav, Assistant Commissioner of Customs Import Shed. \n2. A meeting of the Committee was held on 6.0-.2014 and after \ndeliberation the matter the Committee has decided that as per Rule 2(a) of \nthe Interpretative Rules to the First Schedule to the Customs Tariff Act, \n1975 there are five major components/assemblies such as transmissions \nmotors axles, chassis and controller that provides essential characteristics \nto make a complete E-rickshaw in CKD SKD condition classifiable at 8703 \nand are covered under the provisions of Motor Vehicles Act, 1988. However \nif along with motor any two of the essential components mentioned above \nare missing then it may be considered as parts of electric rikshaw falling \nunder C.H 8708 and will not attract the provisions of Motor Vehicles Act, \n1988. All officers are accordingly directed to decide all pending matters on \nthe above lines. \n3. This issues with the approval of the Commissioner of Customs, ICD TKD \nNew Delhi. \n(Karamvir Singh) \nJoint Commissioner of Customs (SUB) \nICD, TKD, New Delhi.” \n \n \n18. As \nper \nthis \nOffice \nOrder, \nthere \nare \nfive \nmajor \ncomponents/assemblies viz. (i)transmissions (ii)motors (iii)axles (iv) \nchassis and (v)controller that provides essential characteristic to make a \ncomplete E-rickshaw in CKD SKD condition classifiable at 8703. The \norder also states that along with motor, any two of the essential \ncomponents mentioned shall be imported to make a complete E-\nrickshaw in CKD SKD condition, classifiable at 8703. In this context, we \nnote that as per Table-2 above, connection box, controller and motor \nwere imported, along with other parts of E Rickshaw. We note that the \nappellant and has imported connection box for the e-rickshaw. The \nConnection box in an E rickshaw also known as junction box, is an electrical \n\n11 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \nenclosure that protects wiring connections. It is an important safety feature \nthat protects people from electric shock and the connections from \nenvironmental conditions. We also note that as per open source available \non internet, the transmission system or the gearbox is essentially \nconnected to the electric motor through a shaft, which then connects to the \nmotor's wiring that would likely be routed through a dedicated connection \nbox for managing the electrical power coming from the battery controller to \nthe motor; effectively making the gearbox indirectly linked to the electrical \nconnection points. This makes the component an integral part of the \ntransmission system. In addition, we also note that the appellant has \nimported identical numbers of other parts of an e-rickshaw. Therefore, we \nare of the view that with the three major components/assemblies in \naddition to the other components provide essential characteristics to \nmake a complete E-rickshaw in CKD SKD condition, classifiable at 8703 \nhave been imported. In addition, a perusal of the proximity of imports \nvide various Bills of Entry importing the parts of an E-Rickshaw \nestablishes that complete e-Rickshaw in CKD/SKD condition was \nimported by the appellant. \n19. The learned Counsel for the appellant has raised doubts as the \nextent \nto \nwhich \nthe \nsaid \nOffice \nOrder \nissued \nby \nICD \nTKD \nCommissionerate can be relied upon. In this context, we note that the \nlearned Authorized Representative submitted the Hon‘ble High Court of \nDelhi in the case of Rama Krishna Sales Pvt. Ltd. Versus Union of \nIndia reported as 2019 (366) E.L.T. 273 (Del.) [31-01-2019] has \nrelied on the aforesaid order. The relevant paras in this regard is \nreproduced hereinafter:- \n\n12 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \n \n“16. It is apparent that the scope of Rule 2(a) of the Interpretative Rules is \nonly to interpret Customs duties as applicable to an articleimported by any \nimporter. Import of the said Rule is that even an incomplete or unfinished \narticle, which has an essential character of acomplete article, would bear \nthe same duties as applicable to the complete article. Rule 2(a) of the \nInterpretative Rules creates a legal fictionfor the purposes of imposition of \nduties, whereby even an unfinished article or an incomplete article is \ndeemed to be treated as a completearticle for the purposes of determining \nthe duties applicable thereon. \n17. At this stage, it is necessary to refer to the Office Order dated 12-3-\n2014, which is relied upon by the respondents. The same isset out below :- \n“C.No. VIII/ICD/TKD/6AG/104/2013/ptDated 12-3-2014 \nOFFICE ORDER \nA Committee was constituted by Commissioner of Customs ICD TKD New \nDelhi comprising of following below mentioned officersto decide up as to \nwhat percentage of components/assemblies combine together make E-\nrickshaw in CKD SKD as per Rule 2(a) of theInterpretative Rules to the First \nSchedule to the Customs Tariff Act, 1975. \n(1) Shri Karamvir Singh, Joint Commissioner of Customs, SUR \n(2) Shri Gauri Shankar Sinha, Deputy Commissioner of Customs, AG \n(3) Shri Vikash, Deputy Commissioner of Customs Import Seed \n(4) Shri Nalin Kumar, Deputy Commissioner of Customs Group V \n(5) Shri Prashant Kumar Jha, Deputy Commissioner of Customs SUB, and \n(6) Shri Abhinav Yadav, Assistant Commissioner of Customs Import Shed. \n2. A meeting of the Committee was held on 6.0-.2014 and after \ndeliberation the matter the Committee has decided that as per Rule \n2(a) of the Interpretative Rules to the First Schedule to the Customs Tariff \nAct, \n1975 \nthere \nare \nfive \nmajor \ncomponents/assemblies \nsuch \nas \ntransmissions motors axles chassis and controller that provides essential \ncharacteristics to make a complete E-rickshaw in CKD SKD condition \nclassifiable at 8703 and are covered under the provisions of Motor Vehicles \nAct, 1988. However if along with motor any two of the essential \ncomponents mentioned above are missing then it may be considered as \nparts of electric rikshaw falling under C.H 8708 and will not attract the \nprovisions of Motor Vehicles Act, 1988. All officers are accordingly directed \nto decide all pending matters on the above lines. \n3. This issues with the approval of the Commissioner of Customs, ICD TKD \nNew Delhi. \n(Karamvir Singh) \nJoint Commissioner of Customs (SUB) \nICD, TKD, New Delhi.” \n18. It is apparent from the above that the High Powered Committee was \nconstituted to decide as to what percentage of components/assembles \ncombined together should be considered as an E-rickshaw for the purposes \nof Rule 2(a) of the Interpretative Rules. \n19. The aforesaid Office Order indicates the combination of essential \ncomponents and assemblies of E-Rickshaws that are required to be \nconsidered \nas \nthe \nfinished \narticle \n(a \ncomplete \nE-Rickshaw). \nThe \naforementioned Office Order has to be read in the context of Rule 2(a) o \nfInterpretative Rules. It is, at once, clear that the import of the Office Order \nis that the duties as applicable to import of E-Rickshaws would also be \napplicable to the components which are determined as representing the \nessential character of the complete E-Rickshaw. The Committee had \nidentified five major components/assemblies, namely, (i) transmission, (ii) \n\n13 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \nMotor, (iii) axel, (iv) Chassis and (v) Controller which would essentially \nconstitute an E-rickshaw in CKD/SKD (Complete Knock Down/Semi- Knock \nDown) condition. The Committee had further opined that if any two of the \nessential components along with the motor are missing then the remaining \ncomponents could be considered as parts of the motor vehicle (E-\nRickshaw). In other words, if along with the motor other essential \ncomponents/assemblies were imported, the same would be considered to \nhave the essential character of an E-Rickshaw. The Chartered Engineer had \nalso submitted an addendum report dated 10-1-2018, \nclearly stating as under :- \n“We hereby once again submit that the goods received in consignment are \nessential parts which have essential character of finished article of E-\nrickshaw in terms of Rule 2(a) of general rules for the interpretation of First \nSchedule of Customs Tariff. \nSubmitted without prejudice.” \n \nAs seen above, the Hon‘ble High Court of Delhi has relied upon the said \nOffice Order dt.12-03-2014 of ICD TKD, giving the same its judicial \nsanctity. In view of the above, we are of the view that impugned \ncomponents/assemblies combine together make E-rickshaw in CKD SKD as \nper Rule 2(a) of the Interpretative Rules to the First Schedule to the \nCustoms Tariff Act, 1975. Thus, the impugned goods are rightly \nclassifiable under CTH 8703 9000. We take note of the Tribunal‘s decision \nin the case of L.M.L. Limited versus Commissioner of Customs, \nBombay [1999 (105) E.L.T. 718 (Tri.-Del) [29-07-1998] and the \nrelevant para is reproduced below : \n \n“5. On the question of classification we are inclined to agree with the ld. \nSDR. Although on the basis of common parlance, ld. Advocate Shri R. \nSanthanam, rightly points out that a “body unit without an engine” cannot \nbe termed “scooter”. But in view of the Explanatory Notes to HSN we are \nleft with no doubt that the goods would be classifiable under Tariff Heading \n8711.90. In arriving at the decision we have taken into account the \nsubmissions of the ld. SDR that Explanatory Note to HSN have great \npersuasive value in view of the judgment of the Apex Court in the case of \nCollector of Central Excise, Shillong v. Wood Craft Products Ltd. reported in \n1995 (77) E.L.T. 23 (S.C.)” \n \n \nWe note that the aforesaid case relies on the HSN Explanatory Notes of \nChapter 87 of the Customs Tariff Act, 1975. The said CESTAT Order has \n\n14 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \nalso been upheld by the Hon‘ble Supreme Court [1997 (107) ELT A119 \n(S.C.)]. We also note that the Apex Court in the case of Pioneer \nEmbroideries Ltd. Versus Commissioner of Customs, Mumbai [2015 \n(322) E.L.T. 602 (S.C.) [22-07-2015] held as follows:- \n \n“3. The Commissioner, after adjudicating the matter, held that the old \nmachines were non-computerised and merely because the \nJacquard Control Device Reading System was installed in these machines \nafter its import into India thereby making the same as computerised \nmachines, would not give it a character of “computerised embroidery \nmachines” at the time of import. The Customs, Excise & Service Tax \nAppellate Tribunal (hereinafter referred to as „CESTAT‟) has affirmed the \naforesaid view of the Commissioner resulting into dismissal of the \nappeal filed by the appellant-assessee against the order of the \nCommissioner [2004 (178) E.L.T. 933 (Tri. - Bom.)]. It is this judgment \nof the CESTAT which is in appeal before us. The matter rests on the \nmeaning that is to be assigned to General Interpretative Rule (GIR) 2(a), \nwhich reads as under :- \n“Any reference in a heading to an article shall be taken to include a \nreference to that article incomplete or unfinished, provided that, as \npresented, the incomplete or unfinished article has the essential \ncharacter of the complete or finished article. It shall also be taken to \ninclude a reference to that article complete or finished (or falling to be \nclassified as complete or finished by virtue of this rule), presented \nunassembled or \ndisassembled.” \n4…. \n5….. \n6…….. \nA perusal of GIR 2(a) and the related Explanatory Notes makes it clear \nthat when a complete or finished article is presented unassembled, the \nsame has to be classified in the heading as applicable to the assembled \narticle. It also further indicates that the article must be complete or \nfinished but presentation in unassembled condition is only for reasons \nsuch as requirements or convenience of packing, handling or transport. It \nis also clear that articles presented unassembled or disassembled means \narticles the components of which are to be assembled either by means of \nfixing devices (screws, nuts, bolts, etc.) or by riveting or welding and \nfurther that the components shall not be subjected to any further working \noperation for completion into the finished state.” \n7. We, thus, do not find any merit in this appeal which is, accordingly, \ndismissed.” \n \nThis case is also squarely applicable in the instant case as it also \ninterprets Rule 2(a) of the GIR. The said CESTAT Order has been upheld \n\n15 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \nby the Hon‘ble Supreme Court. The following case laws have been relied \nupon the learned Authorized Representative:- \n \na) In Salora International Ltd. v. CCE (2012) 284 ELT 3 (SC), assessee \nmanufactured various components of TV sets. These were assembled for \ntesting of each set. Then the sets were disassembled and then transported \nas parts to other units (satellite units) of assessee to be reassembled and \nmarketed. Individual serial numbers were given. It was held that the goods \nhave to be classified as finished/complete goods and not as parts. It was \nheld that if only parts were manufactured and matching and numbering \nfunctions were done at satellite units, it would have been removal of parts \nof TV sets. \nb) In Hindustan Udyog v. CCE 2001(133) ELT 405 (CEGAT), it was held \nthat 'belt conveyor system' supplied with all material except belt (as belt \nwas to be procured from market and fitted by buyer) has to be classified as \n'Belt Conveyor' as per rule 2(a), as it has essential character of final \nproduct. \nc) In Thomson \nConsumer \nElectronics v. CC 2004 \n(164) \nELT \n292 \n(CESTAT),parts of audio system were imported in SKD condition It was \nheld that it has to be classified as 'audio system'. [During relevant period, \nparts were freely importable but audio system was not freely importable]. \nd) In Varshatronics v. CC 1999(106) ELT 89 (CEGAT), it was held that \nwashing machine imported in SKD condition (excepting a few parts) \nwould be classifiable as 'washing machine', applying rule 2(a). Further, \ngoods can be confiscated if import of full machine without licence is \nprohibited. [In this case, import of full machine was prohibited but parts \ncould be imported without import licence. The assessee imported almost all \nthe components to show that he is importing parts and not the whole \nmachine]. \ne) In CC v. Hindustan Motors Ltd. 2003 (156) ELT 155 (CESTAT), almost \nall components of engine were imported in one consignment. Invoice \nshowed them as 'set of engine'. The assembly of the components would \ngive engine essential characteristic of engine, though some local \ncomponents would be required to complete the engine. It was held that the \nimport was of complete engine. - - It was also held that complexity of the \nassembly method is not required to be taken into account for purpose of \napplication of rule 2(a). \n \nWe note that the underlying principle in all case is that even if the \nimpugned article is incomplete, as long as it has the essential character, \nthen it can be classified as a complete finished article. We also examine \nthat in 06 Bs/E, the number of essential items impoted as per the Office \nOrder dt 12-03-2014 on an average is more than 21. All these components \nfind mention in Table 1 as common parts of any E Rickshaw, thus satisfying \nthe essential character criteria of e-rikshaw in terms of Rule 2(a) of the \n\n16 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \nGeneral Rules of Interpretation. \n20. \nAs regards the 12 Bills of Entry , we note that in 02 Bs/E,. the total no. \nof items of identical numbers are more than 10 . All these together figure as \ncommon parts of any E Rickshaw. \n \nS. \nPARTS \nQUANTITY \nPARTS \nQUANTITY \nNO \n(Pcs.) \n(Pcs.) \nB/E \nNo. \nand \ndate \n4777299 \n05.09.2019 \n5144230 \n03.10.2019 \n1 \nCharging \nSocket \n1500 \nCharging \nSocket \n1550 \n2 \nConnection \nBox \n1500 \nConnection \nBox \n1550 \n3 \nDigital \nSpeedometer \n1500 \nDigital \nSpeedometer \n1550 \n4 \nAlarm System \n1500 \nLeft Right \nSwitch \n1550 \n5 \nOn/Off Switch \n1500 \nOn-off switch \n1550 \n6 \nLeft right \nswtich \n1500 \nFront Shocker \n1550 \n7 \nShocker \n1500 \nHandle T \n1550 \n8 \nHandle T \n1500 \nLamp ear \n1550 \n9 \nLamp ear \n1500 \nAlarm System \n1550 \n10 \nArm Rest \n1500 \nArm Rest \n1550 \n11 \nTransformer \nfor charger \n250 \n \n \nNo. \nof \nitems \n11 \n10 \nTABLE 3 \n \n21. \n \nSl No. \nBE No \nBE Date \nItem \nQuantity \n1 \n3909116 03.07.19 \nRear Axle \n1200 \n2 \n4419559 09.08.19 \nRear Axle \n1200 \n3 \n4683106 29.08.29 \nRear Axle \n1000 \n4 \n3168551 09.05.19 \nCharger \n1100 \n5 \n3237578 15.05.19 \nLead Acid Battery \n800 \n6 \n3448436 30.05.19 \nRear Axle \n1200 \n7 \n3804927 25.06.19 \nCharger \n1300 \n8 \n5124669 01.10.19 \nRear Axle \n1200 \n9 \n5195547 07.10.19 \nRear Axle \n1200 \n10 \n5590235 07.11.19 \nCharger \n1301 \nTABLE 4 \n \n\n17 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \nIn these 10 Bs/E, the number of items in each consignment ( Bill of Entry) is \none only but the quantity imported in all these consignments( Bills of Entry) \nis commercially comparable which is around 1200 Nos. In this context, we \nnote that the Tribunal in Commissioner Of Customs (Import), Mumbai \nVersus Videomax Electronics reported as 2011 (264) E.L.T. 466 (Tri.-\nBom) [27-08-2010], the CESTAT clubbed the consignments of two \ndifferent importers namely M/s. Electronic Instrumentation and M/s. \nVideomax Electronics to come to conclusion that the parts imported by these \ntwo importers can be clubbed together and Law is made applicable to the \nassembled resultant product. The relevant paras are reproduced. \n―1…………M/s. Electronic Instrumentation (proprietor: Shri Vinod Kumar \nAgarwal) and M/s. Videomax Electronics (proprietress: Smt. SnehLata, w/o. \nShri Vinod Kumar Agarwal) have imported components/parts required for \nelectronic goods, namely, rechargeable lights and radio cassette recorders, \nduring the period from April, 1997 to February 1998. These imports were made \nin several consignments during the said period. A set of Bills of Entry were filed \nby Electronics Instrumentation and another set by Videomax Electronics. These \nBills of Entry were accompanied by the respective invoices and packing list \n8……………On many occasions, the components imported by Shri Vinod Kumar \nAgarwal in the name of „Electronic Instrumentation‟ on a particular date \nperfectly matched those imported by his wife in the name of „Videomax \nElectronics‟ on the same date. (In one of these cases, the consignments \ncovered by the Bills of Entry filed by the husband and the wife came in the \nsame container.) There are also numerous instances of matching imports \nhaving been made by the couple on successive dates. In a few cases, matching \ncomponents figured in Bills of Entry filed by the couple with a short gap of a \nfew days. \n16……….Separate Bills of Entry, No. 682 and No. 534 respectively, were filed on \n5-1-1998 \nin \nthe \nname \nof \n„Videomax \nElectronics‟ \nand \n„Electronic \nInstrumentation‟ describing the above goods in the same manner as in the \nrespective invoices and claiming clearance. \n17. Learned counsel has also relied on a few decisions including the apex \ncourt‟s judgment in Sony India case in support of his contention that each Bill \nof Entry has to be separately assessed and that it is not permissible in law to \nclub imports of components covered by different Bills of Entry filed on the same \ndate or on different dates, so as to assess the goods as the complete article in \nCKD/SKD condition. We have already held to the effect that the said contention \nof the learned counsel is not acceptable inasmuch as Vinod Kumar Agarwal \nadmitted the subterfuge resorted to by him in the names of the respondents to \nevade Import Policy restrictions and to short-pay duty. It was clearly and \ncategorically admitted that the imports of components by the respondents \nduring the material period, as a matter of fact, constituted importation of \ncomplete RCRs and RCLs in CKD/SKD condition. Having admitted the Revenue‟s \n\n18 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \ncase on facts, the respondents cannot claim the benefit of any of the decisions \ncited by their counsel, as the importers in the cited cases had apparently relied \non Rule 2(a) without admitting subterfuge. We are of the view that, in respect \nof importers like the respondents who deliberately resort to subterfuge by \nimporting complete articles against policy restriction on the pretext of \nimporting components/parts thereof and also admit the offence as in this case, \nany interpretation of Rule 2(a) is only of academic interest. Moreover, the issue \nin the present case is squarely covered by the ratio of the Apex Court‟s decision \nin Phoenix case, the facts of which are similar to the facts of the present case.” \n \nThis order was upheld by Supreme Court vide order dated 7-1-2011 in \nElectronic Instrumentation v. Commissioner [2011 (270) E.L.T. A90 \n(S.C.)]. \n22. We note that from the parts of E Rickshaw imported as listed in Table \n4 supra, it can be concluded that axles imported in these 10 consignments \n(Bills of Entry) are to supplement the other parts imported in the 8 each \nconsignments ( Bills of Entry) meant for assembly of e-Rickshaws. We note \nthat the impugned order has relied on the case law of Commissioner Of \nCustoms (Import), Mumbai Versus Videomax Electronics [2011 \n(264) E.L.T. 466 (Tri.-Bom) [27-08-2010] which was upheld by \nSupreme Court in Electronic Instrumentation v. Commissioner [2011 \n(270) E.L.T. A90 (S.C.)] while addressing the submissions made by the \nappellant. \n23. Ld. Counsel for the Appellant submitted that the Rule 2(a)of general \nInterpretative Rules is not applicable because the unfinished and \nincomplete goods does not have the essential character of the finished or \ncomplete goods. However, as discussed in the preceding paras, the \nconsignments imported in different B/Es put together does lead to the \nconclusion that Rule 2(a) of General Rules of Interpretation for \nclassification under HSN is indeed applicable in the instant appeal. Ld. \nCounsel also submitted that the ICD TKD Office Order dt 12-03-2014 \n\n19 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \ncan not override the Exim Policy. However, we are of the opinion that \nthe issue before us is whether the classification of impugned goods is \nCTH 8703 9000 as Electric Motor vehicles or CTH is 8708 9900 as Parts & \naccessories of automobiles. The aspects of allowing an unfinished vehicle as \nfinished vehicle which may require certain statutory requirements under \nMotor Vehicles Act 1988 is not the issue under consideration. \n24. The Appellant has stressed upon the words ‗As presented‘ in Rule 2(a) \nof GIR to impress that the impugned goods as presented do not have \nessential characteristics and in this regard relied upon Hon‘ble Apex Court \njudgement in the case of Commissioner of Customs, New Delhi Versus \nSony India Ltd. [2008 (231) E.L.T. 385 (S.C.)]. We are of the view that \nthis judgement is not applicable in the instant case, as the impugned goods \nimported in one consignment ( Bill of Entry) is established are sufficient to \nassemble E-Rikshaw in CKD/SKD condition. Moreover, we also note that \nthe “Sony India” judgement relied upon by the appellant has been \ndistinguished by subsequent judgements such as (i) Commissioner of \nCustoms (Import), Mumbai vs. Videomax Electronics 2011 (264) \nE.L.T. 466 (Tri.-Bom) (ii) Salora International Ltd. vs. Commissioner \nof C. Ex., New Delhi 2012 (284) E.L.T. 3 (S.C.) (iii) Commissioner of \nCus. (Import), Mumbai vs. Pundrick Ravindra Trivedi 2015 (322) \nE.L.T. 812 (S.C.) (iv)Ankit Asthana vs. Commissioner of Customs \n(Import), Nhava Sheva 2015 (327) E.L.T. 162 (Tri.-Bom) \n(v) Commissioner of Customs, Chennai vs. JSW Steel Ltd. 2016 \n(340) E.L.T. 262 (Tri.-Mad) and (vi) Vewvox Systems vs. \nCommissioner of Cus., C. Ex. & S.T., Noida-I 2017 (355) E.L.T. 148 \n(Tri.-All). \n\n20 \n \nCUSTOMS APPEAL NO. 51965 OF 2022 \n \n25. The Appellant has claimed the benefit of Sl. No. 526A of Notification \nNo. 55/2017 dt. 30.06.2017. In this context, we note that the benefit of Sl. \nNo. 526A of Notification No. 55/2017 dt. 30.06.2017 was not claimed by \nthe Appellant at the time of filing of Bill of Entry. We also note that the \nimpugned order has denied the benefit of the said Notification relying \nCESTAT Order in the case of Abhedya Industries Ltd. Versus Commr. \nOf C. Ex. & S.T., Hyderabad-III reported as 2016 (340) E.L.T. 398 \n(Tri.-Hyd) [21-06-2016]. The relevant para is reproduced below: \n \n―8. This being so, the contention of the appellant that even if they are not \neligible under Notification No. 44/2001 they could be given benefit of \nNotification \nNo. \n43/2001-C.E. \n(N.T.) \nis \ntherefore \nmisconceived \nand \nunacceptable, since it is not the case of appellant that they had applied for \nbenefit under Notification No. 43/2001.‖ \n \n \n26. In view of the above, we are of the opinion that the impugned \ncomponents imported are essential components of the E-Rickshaw. \nConsequently, the correct classification of the impugned goods is CTH \n87039000. Accordingly, the impugned order is upheld and the appeal is \ndismissed. \n \n (Pronounced in the open Court on 10.02.2025) \n \n \n \n \n(DR. RACHNA GUPTA) \nMEMBER (JUDICIAL) \n \n \n(HEMAMBIKA R. PRIYA) \nMEMBER(TECHNICAL) \nGy. \n"