TMI Blog2020 (2) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... ear box mentioned as the transmission assembly were imported in the form of the pre-assembled unit and same were used, as such, while assembling the Segway the final product - It also emerges that no plant, machinery was required for assembling Segway imported by the appellant and the Segway were imported in the CKD condition, which were got assembled with the help simple hand tools like spanner, screw driver etc. and it also emerges from the investigations that sometimes the product were got assembled at the buyer s premises itself. Thus, it emerges that the Segway product was being imported in a CKD condition under various bills of entries and same was got assembled in India for further sale with the simple screw driver technology. It is also matter of fact that the parts such as Power Base, Gear Box were imported in assembled forms and not in CKD condition and thus these crucial parts were assembled/ready to use components for further assembly of Segway product. The correct classification for the product imported in the CKD condition as is the case in this particular appeal, same need to be classified under Chapter sub-Heading 87119091. We have also analyzed the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to what is being imported by them and they have consciously mis-declared their product as CKD parts of electrically operated two wheelers of captive use classifying the same under chapter sub-Heading 87149990. The Adjudicating Authority is right in imposing penalty upon them under provision of Section 114A and Section 114AA of the Customs Act, 1962 and we refrain from interfering the finding and imposition of the penalty upon these two appellants also. Appeal dismissed - decided against appellant. - Customs Miscellaneous Application No. 50487 of 2019 in Customs Appeal No. 51007 of 2019, 51008 of 2019, 51009 of 2019 - FINAL ORDER NO. 50362/2020 - Dated:- 24-2-2020 - HON BLE SHRI C.L. MAHAR, MEMBER (TECHNICAL) AND HON BLE MRS. RACHNA GUPTA, MEMBER (JUDICIAL) Shri J.M. Sharma, Consultant for the appellants. Shri Rakesh Kumar, Authorized Representative (DR) for the Respondent ORDER C.L. MAHAR :- The brief facts of the matter are that the appellant No. I was appointed a distributor of Segways manufactured and patented by M/s Segways Inc., U.S.A. for Indian territory on 01/02/2010. The agreement authorized the appellant No. I as the distributor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off. ; (a) transmission assembly, (b) power base assembly (without batteries) ; (c) wheel assembly with tyre (d) info key [incomplete form]. (ii) All the above units were in the form of assemblies and not in knocked down condition. These units were in the form of assemblies are absolutely complete and are ready for use and only to be attached and fixed each other for use of the final product namely Segway. The said inspection was carried out at DRI, New Delhi office on 26/07/2016. 2. During the course of investigation, the DRI officers have also made a request to the National Automobile Testing and R D Infrastructure Product, NBCC Place, Lodhi Road, New Delhi to depute a suitable export for examining gear box and transmitting assembly imported by the appellant. One Shri Devesh Parikh, Deputy Manager was deputed by National Automobile Testing and Infrastructure Institute on 22 December 2016. Shri Devesh Parikh after examining the samples of gear boxes and power base of the Segway submitted that the gear box and power base were in assembled condition. 3. After investigation, show cause notice was issued to the appellants by the Principal Commissioner/Commissioner of ICD, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussed in paras above . (B) Now, therefore, M/s Bird Retail Pvt. Ltd., E-9, Connaught House, Connaught Place, New Delhi 110 001 are hereby called upon to show cause to the Additional/ Joint Commissioner of Customs, Air Cargo (Import), New Custom House, Near I.G.I. Airport, New Delhi 110 037 within 30 days of the receipt of this notice, as to why (1) The Segway (electrically operated) imported by them in parts with Gear Box/Power Base in Pre-assembled form mis-declaring them CKD parts of electrically operated two wheeler/of Personal Transport/Lithium ION Battery for captive use as detailed in Serial No. 3, 4, 5, 6, 8 9 of Annexure A to this Show cause Notice, should not be classified under CTH 87119091 and the benefit of Notification No. 12/2012-Cus. (Serial No. 443 (1) (a) and 444) dated 17/03/2012, as amended, fraudulently claimed by them towards the import of these goods should not be denied and BCD @ 30% should not be charged in view of Notification No. 12/2012-Cus. (Serial No. 443) (1) (b) dated 17/03/2012, as amended, towards the import of these goods ; (2) The seized goods valued at ₹ 6,86,154/- should not be confiscated under Section 111 (m) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplete Segway and BCD @ 30% should not be charged in view of Notification No. 12/2012-Cus. (Serial No. 443 (1) (b)) dated 17/03/2012, as amended, towards the import of these goods ; (2) The seized goods valued at ₹ 7,64,643/- should not be confiscated under Section 111 (m) of the Customs Act, 1962 ; (3) The imported goods valued at ₹ 1,91,161/- other than the seized goods, as mentioned in Sr. No. (i) above should not be held liable for confiscation under Section 111 (m) of the Customs Act, 1962 ; (4) The differential Customs duty amounting to ₹ 2,32,032/- (Rupees Two Lacs Thirty Two Thousand and Thirty Two only) evaded/ short paid by them as detailed in Serial No. 10 to Annexure A to the show cause notice should not be demanded and recovered from them by invoking the extended period as per provisions of Section 28 (4) of the Customs Act, 1962; (5) Interest should not be demanded and recovered from them on the aforesaid evaded/short paid Customs duty in terms of Section 28AA of the Customs Act, 1962 ; (6) Penalty should not be imposed upon them under Section 114A and 114AA of the Customs Act, 1962, as discussed in paras above ; (C1) Now, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y operated vehicle cannot be classified to be a motor vehicle as per Motor Vehicle Act, 1988 as its maximum speed is 12.5 miles per hour equal to 20 km. and, therefore, Segway cannot be equated with the electrically operated motorcycle or moped or cycle fitted with the auxiliary the motor. It has further been argued that though the appellant had classified their product under a particular customs tariff heading and if the Department wants to change the classification of the product to some other tariff heading the burden of proof for classifying the product in a different tariff heading has to be discharged by the Department. The learned Advocate has taken reliance of following cases in support of his argument on this count : (a) Commissioner of Central Excise, Nagpur versus Vicco Laboratories 2005 (179) E.L.T. 17 (S.C.) ; (b) Raptakos Brett Co. Ltd. versus Commissioner of Central Excise, Raigad 2014 (307) E.L.T. 565 (Tri. Mumbai). 6. It has further been submitted that the Commissioner has wrongly denied them the benefit under Notification No. 12/2012-Cus. dated 17/03/2012 at Sl. No. 443 (1) (a) saying that the gear box imported by the appellant were in pre-assembled c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elates to interpretation of clauses of Notification No. 12/2012-Cus. dated 17/03/2012; therefore invoking extended period of limitation in respect of 7 B/E dated prior to 11/01/2015 (beyond two years), ignoring the various submissions of the appellant discussed in Ground G of the appeal, is not sustainable. 9. That the learned Commissioner in the impugned order confiscating the seized goods and holding other than seized goods liable to confiscation u/s 111 (m) of Customs Act 1962 and imposing penalties u/s 112, is not sustainable. The appellant also submit that as per Annexure A of the show cause notice the differential duty has been demanded in respect of all goods including seized goods, which were cleared for home consumption against 10 finally assessed B/E. The said goods are not covered by the definition of imported goods which definition excludes goods which have been cleared for home consumption. The duty less paid on such goods can be recovered under Section 28 of the Customs Act, 1962. In the present case the notice for recovery of differential duty has been issued under Section 28 (4) of the Customs Act, 1962. 10. The penal provisions in respect of duty short pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant No. II namely Shri Rony Abraham business head of the appellant No. I has submitted the samples of the import consignment which were in the same form and condition as were being imported by them before the officers as well as before Shri Vinod Soorma Chartered Engineer. The samples of the imported goods were in the form of power base, transmission assembly, gear box, info key and wheels with tyres. These products were produced before the Chartered Engineer. The Chartered Engineer vide his report dated 1 August 2015 submitted as follows : This is to certify that I have inspected/examined the following units which were imported by M/s Bird Retail Pvt. Ltd., New Delhi. The same were found in the form of assemblies of 1. Transmission Assembly ; 2. Power Base assembly (without Batteries) ; 3. Wheel Assembly with tyre ; and 4. Info Key (in complete form). All the above units were in the form of assemblies and not in knocked down condition. These units which are in the form of assemblies, are absolutely complete and are ready for use and only need to be attached/fixed to each other for use off the final product i.e. Segway. The said inspection was carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... user manual etc. for assembling Segway in India. The parts and assemblies imported were not subjected to any modification or addition of the local parts or hardware. The imported assemblies, such as, transmission assembly, power base assembly, wheel assembly with tyre, info key assembly and batteries were just put together by following the instructions with the screw driver technology and complete Segway unit came into existence. It also emerges from the entire investigation that gear box mentioned as the transmission assembly were imported in the form of the pre-assembled unit and same were used, as such, while assembling the Segway the final product. 18. It also emerges that no plant, machinery was required for assembling Segway imported by the appellant and the Segway were imported in the CKD condition, which were got assembled with the help simple hand tools like spanner, screw driver etc. and it also emerges from the investigations that sometimes the product were got assembled at the buyer s premises itself. 19. Thus, it emerges that the Segway product was being imported in a CKD condition under various bills of entries and same was got assembled in India for furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be classified as complete or finished by virtue of this rule), presented unassembled or disassembled . 23. The above-mentioned Rule 2 (a) makes it clear that any product, which is imported in the form of completely knocked down condition (CKD) and if such components imported in CKD condition have all the essential ingredients to work as a complete vehicle after assembly of the same, in that case such components need to be classified as a complete motor vehicle, motorcycle etc. In the present case it has very categorically been established that the products which were imported were completed assemblies of the components when put together would work as complete Segway product. It has also categorically been opined by the Chartered Engineer who in his report dated 1 August 2016 has categorically certified that the various assemblies which have been imported by the appellant, such as, transmission assembly, power base assembly (without batteries), wheel assembly with tyre and info key etc. were imported in the form of the assemblies not in the knocked down condition and the final product namely Segway can be made just by attaching these assemblies with the simple screw driver tech ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red territorial waters of India, the Boarding Officer had drawn samples of the product for test in the presence of the representative of the Master of Vessel, the Shipping Agent and representative of the Importer; and such samples had been sent for testing to the Chemical Examiner, Customs House, Kandla, who has opined that the same does not conform specification for crude palm oil (edible grade) as per IS-8323-E-1977. It appears that the said sample was also forwarded through the Referral Hospital and Community Health Centre, Mundra-Kutch, to the Public Analyst, Food and Drug Laboratory, Vadodara for opinion. He has opined to the effect that the sample conforms to the standards and provisions laid down under the Prevention of Food Adulteration Rules, 1955, for palm oil and cannot be used as such for human consumption. Therefore, once the competent authority who is technically qualified to tender opinion in relation to the technical standards prescribed under the provisions of Food Adulteration Act and Rules thereunder has tendered his opinion it would not be open to any one to take a contrary stand, unless and until such technical opinion is displaced by specific and cogent evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under this category has wrongly been claimed and availed by the appellant as from the expert opinion as well as from the facts of the matter it has come out specifically that what has been imported by them were not CKD condition components or parts, such as, engine, gear box, transmission mechanism etc. rather they were in the form of completely assembled components in the form of transmission assembly, power base assembly, wheel assembly with tyre etc. and, therefore, the benefit of the concessional rate of the duty were certainly not available to them. 26. In view of entire above discussion, we find that appellant have mis-declared their import consignment and what they have imported were Segway product classifiable under Customs Tariff Heading 87119091 in completely knocked down condition. We, therefore, uphold the findings of the impugned order-in-original classifying the import consignments under 87119091. We also find no reason to interfere with the order-in-original with regard to demand of Customs duty under Section 28 (4) of the Customs Act, 1962 by invoking the extended time proviso as we find that the appellant have been fully aware as to what is being imported by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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