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2023 (2) TMI 676 - CUSTOMS AUTHORITY FOR ADVANCE RULINGS, NEW DELHIClassification of imported goods - Electric Vehicle Kits - classifiable under Tariff Entry No. 8703 of the First Schedule to Customs Tariff Act, 1975 or not - eligibility of the import for S. No. 526A(1)(a) of the mega exemption notification, qualifying for 15% BCD rate for the kits or not. Classification of the Electric Vehicle Kits of Volvo brand passenger vehicles - HELD THAT:- For determining the appropriate classification of goods being imported as kit comprising the items mentioned in the packing list referred to above, reliance needs to be placed on Rule 2(a) of the General Rules for Interpretation of Import Tariff (GIR in short), which provides that, “any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished articles has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled.” In the instant case, the applicant has stated that they will be importing kits of passenger cars and it is also settled, if all the parts are presented in knocked down condition and they have the essential character of a complete article, they have to be assessed as complete article, in terms of said Rule 2(a) of GIR. In the present case, the motor vehicles are initially assembled at site to a substantive extent for thorough verification and testing, then disassembled and imported in form of a kit. Therefore, notwithstanding the fact that at the initial assembling stage, they have not acquired the completeness of a car to be roadworthy, these kits have acquired the essential characteristics of motor vehicle to merit classification under Heading 8703, noting that they are principally designed for the transport of persons, numbering less than ten persons. Reliance placed in the case of M/S VOLVO AUTO INDIA PRIVATE LIMITED VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS, BANGALURU AND COMMISSIONER OF CUSTOMS, CHENNAI [2022 (3) TMI 560 - CUSTOMS AUTHORITY FOR ADVANCE RULINGS- NEW DELHI]. In this regard, it is also noted that the question relating to classification of the EV vehicle kits posed for advance ruling is sufficiently answered holding that they are classifiable under Heading 8703 at four-digit level. The additional submission made by the applicant is referred wherein it has been mentioned that in exceptional cases, due to logistics and business considerations, one or more parts of the kit may have to be imported in a separate consignment through the same port, while majority of the parts of the said electric vehicle kit would still be imported in one consignment, and even in such case, all imports pertaining to one vehicle would be made in close proximity to each other and the relevant electric vehicle kit, to which it pertains would be clearly identified - the submission of the applicant that even in such exceptional cases, the classification of the electric vehicle kit would not be impacted and would Heading 8703, agreed upon. Effective rate of duty applicable on the EV vehicle kits under Notification No. 12/2012-Customs, dated 17-3-2012, which has since been replaced by the Notification No. 50/2017-Customs, dated 30-6-2017, as amended - HELD THAT:- The applicant has clearly stated that the Electric Vehicle CKD kits to be imported by the applicant consist of approximately 105 parts/sub-assemblies, which are standalone and not attached to each other or any other parts, components or assembly. They have also added that going forward, the number of parts in which the vehicle is broken down could increase. Further, these components and parts are not mounted on a chassis or a body assembly - these CKD kits, as described in the application submitted before this Authority will fall under sub-category 1(a) and attract effective rate of BCD of 15%.
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