Legal principle

An electric steering lock assembly, whose only function is anti-theft immobilisation of the steering wheel after the vehicle has stopped, is not a part of a steering wheel, steering column or steering box under CTH 8708 94 00 and falls under the residual entry CTH 8708 99 00; the burden of displacing the importer's declared classification lies on the Revenue, and where the goods were fully and correctly described, a bona fide classification dispute cannot support confiscation under Section 111(m), redemption fine under Section 125 after clearance for home consumption, or penalty under Section 112(a).

Court decision

By Final Order Nos. 41074-41075/2026 both appeals were allowed with consequential relief. The Tribunal held the imported "LOCK ASSY-STEERING, ELECTRIC (81900-F9700)" classifiable under CTH 8708 99 00 and set aside the reclassification under CTH 8708 94 00, the denial of the concessional rate under Sl. No. 896 of Notification No. 152/2009-Cus. dated 31.12.2009, the differential duty of Rs. 63,50,511/- with penalty of Rs. 3,00,000/- in Customs Appeal No. 40477 of 2023, and the differential duty of Rs. 6,96,07,878/-, redemption fine of Rs. 4,90,00,000/- and penalty of Rs. 35,00,000/- in Customs Appeal No. 40333 of 2023, together with the invocation of the extended period of limitation.

Facts

M/s. Mobis India Module Private Ltd., Penukonda, Anantapur, imported "LOCK ASSY-STEERING, ELECTRIC (81900-F9700)" from Korea through various Bills of Entry, classifying the goods under CTH 8708 9900 as other parts and accessories of motor vehicles and claiming the concessional basic customs duty at Sl. No. 896 of Notification No. 152/2009-Cus. dated 31.12.2009 under the India-Korea PTA. On post-clearance audit the Department took the view that the goods fell under CTH 8708 9400 covering steering wheels, steering columns and steering boxes and parts thereof, attracting a higher rate. Show Cause Notice dated 19.04.2022 for September 2019 to January 2020 proposed differential duty of Rs. 63,50,511/- and a penalty of Rs. 3,00,000/-, confirmed by Order-in-Original No. 234/2023-AIR dated 15.04.2023 of the Commissioner of Customs (Air Cargo), Chennai (Customs Appeal No. 40477 of 2023). Show Cause Notice dated 21.11.2022 for November 2020 to November 2022 proposed differential duty of Rs. 6,96,07,878/-, redemption fine of Rs. 4,90,00,000/- and penalty of Rs. 35,00,000/-, confirmed by Order-in-Original No. 101389/2023 dated 06.03.2023 of the Commissioner of Customs, Chennai (Customs Appeal No. 40333 of 2023). The Revenue relied on Automotive Industry Standard AIS-075 on protection of motor vehicles against unauthorised use, the HSN Explanatory Notes to Heading 87.08, and the appellant's own earlier classification of similar goods under CTH 8708 9400 in Bill of Entry No. 2709986 dated 04.04.2019.

Key provisions

• Section 112(a), Customs Act, 1962 — Penalty for improper importation of goods
• Section 111(m), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 125, Customs Act, 1962 — Option to pay fine in lieu of confiscation