By TIOL News Service

NEW DELHI, MAY 09, 2017: THIS is a Revenue appeal against the order passed by the CESTAT.

In this case 2016-TIOL-2322-CESTAT-DEL , the Bench had held thus -

Cus - Appellant imported electrically operated motor cycles (e-bikes) in CKD condition - Revenue classified the same under 8711 9091, however, when it came to charging CVD, benefit of concessional rate of duty (4% adv) under Notification No.06/2006-CE was disallowed on the ground that the Notification provided concessional rate of 4% ad valorem only on electrically operated vehicles while the impugned goods were in CKD condition which required to be assembled to make e-bike - appeal to CESTAT. 

Held: Once the goods have been classified to be electrically operated bikes, they clearly get covered under the scope of entry at Sl. No.35 of the table appended to the said Notification 6/2006-CE - It is so because there is no basis to treat the impugned goods as e-bikes for the purpose of classification and as parts (and not as e-bikes) for the purpose of exemption Notification - In view of apex court decision in Maestro Motors Ltd. = 2004-TIOL-98-SC-CUS and CBEC Circular No. 1/2005-Cus, dated 11.01.2005, impugned order is not sustainable and hence set aside - Benefit of Notfn. 6/2006-CE available - Appeal allowed: CESTAT [para 5, 6]

After considering the submissions, the High Court held -

+ In the context of CVD what has to be seen is whether goods of a like nature, if manufactured in India, would be exigible to excise duty. Where such goods are not exigible to excise duty, then naturally there would be no corresponding CVD on such goods when imported.

+ In the domestic manufacturing context, the question of goods being in either in CKD condition or a Semi Knocked Down (SKD) does not arise. When goods are imported, as in the present case, in a CKD condition, what in fact is imported is the entire vehicle. All that is required to be done is to assemble the various components to obtain the complete vehicle. That is why it is called a CKD kit.

+ Since virtually what is imported is in fact an entire electrically operated vehicle , in this case is E-bikes, there would be no justification in denying the exemption from excise duty under the Notification in question. Therefore, no CVD would be applicable on such imported CKD E-bike kits.

Concluding that no substantial question of law arises from the impugned order of the CESTAT, the Revenue appeal was dismissed.

(See 2017-TIOL-867-HC-DEL-CUS)