Legal principle

An incomplete or knocked-down import that, as presented, has the essential character of the complete article is classifiable as the complete article under Rule 2(a) of the General Rules for the Interpretation, but a concessional-rate entry limited to a kit 'containing all the necessary components' is not available where admitted components are missing; a show cause notice under Section 28 may be issued without first challenging the self-assessment, and a corrigendum making the notice answerable to a higher officer relates back to the notice and causes no prejudice.

Court decision

The Tribunal upheld Order-in-Original No. 24/2022/SG/Pr. Commr./ICD-Import/TKD dated 05.08.2022 in full and dismissed Customs Appeal No.52227 of 2022 by Final Order No. 51605/2026. The classification of the imported e-bike CKD kits under CTH 87116020 was confirmed, the exemption under Serial No. 531A(1) of Notification No. 50/2017-Cus was held unavailable, the alternative claim under Sl. No. 531A(2) was rejected as it had not been claimed at the time of filing the Bill of Entry, the duty demand of Rs. 54,82,066/- at the full tariff rate of 100% BCD was sustained, and the confiscation under Section 111(m) together with the penalty under Section 112(a)(ii) was upheld, the Tribunal holding confiscation and redemption fine to be separate actions.

Facts

M/s Rissala Electric Motors (P) Ltd., Gurugram, imported electric two-wheeler components in Completely Knocked Down condition, filing Bills of Entry declaring classification under CTH 87116020 and claiming the concessional rate under Notification No. 50/2017-Cus dated 30.06.2017 as amended by Notification No. 03/2019-Customs dated 29.01.2019. A show cause notice, issued by an Assistant Commissioner and later made answerable to the Principal Commissioner by corrigendum, alleged wrong classification and incorrect availment of the exemption; a pre-consultative letter dated 28.06.2021 had been sent. The Principal Commissioner of Customs (Imports), ICD Tughlakabad, by Order-in-Original dated 05.08.2022, denied the exemption, confirmed duty of Rs. 54,82,066/- at the full tariff rate of 100% BCD, held the goods liable to confiscation under Section 111(m) and imposed penalty under Section 112. The appellant's own Packing List showed that the Battery Pack, Power Control Unit, Energy Monitor Contractor, Charger and Electric Compressor were not imported, and the appellant had itself declared the goods as 'e-Bike in CKD condition with all pre-assembled essential parts and components'. The order recorded at para 27.2 that there was no dispute about classification under CTH 87116020. The appellant argued want of jurisdiction, absence of real pre-notice consultation, finality of the self-assessed Bills of Entry on the authority of ITC Limited, and that the goods should at worst be treated as parts under CTH 8714.

Key provisions

• Section 28(1), Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded
• Section 111(m), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 112(a)(ii), Customs Act, 1962 — Penalty for improper importation of goods