Raw Aluminium Cannot Be Reclassified As 'Motor Vehicle Parts' Based On End Use Alone: CESTAT Delhi

The Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) recently set aside the re-classification of raw aluminium articles imported from Korea and Thailand as auto-parts solely on the basis of end use.

On 21 January 2026, a Bench of Justice Dilip Gupta and Technical Member Hemambika R. Priya rejected the Department's attempt to classify imported aluminium tubes, pipes, and profiles as 'parts of motor vehicles'. The Tribunal held that merely because the imported goods bore specific part numbers, they could not be considered suitable for use “solely” and “principally” in motor vehicles. 

The dispute between the Hanon Climate Systems India Pvt. Ltd., the taxpayer, and the Commissioner of Customs arose from a disagreement over the tariff classification of the imported aluminium goods. The key question was whether the aluminium tubes, pipes, and profiles should be treated as generic aluminium articles under Chapter 76 or as identifiable motor vehicle parts under Chapter 87.

The Customs Department argued that the goods were auto-parts based on their design, part numbers, and suitability for vehicle components. The company maintained that the imported goods were raw aluminium articles classified under CTH 7604, 7608, and 7616, attracting NIL duty under Notification Nos. 152/2009 and 46/2011.

The Tribunal, following its own decision in Visteon Climate Systems India, held that specific headings under Chapter 76 prevail over general headings and that:

“The goods as imported are raw inputs of aluminium which are subjected to various processes before they can be used in manufacturing the ECM, charge air cooler or condensers. The goods are raw materials with wide applications for manufacturing various types of products and are not limited to radiators, charge air coolers, or ECM. Hence, they cannot be considered suitable for use solely and principally with motor vehicles. The goods are also specifically covered under CTH 7604, CTH 7608, and CTH 7616.”

On the issue of limitation, CESTAT observed that there was no intent to evade duty.

Accordingly, the Tribunal set aside the demand, interest, and penalty, allowing the classification and exemption claims in full.

For Petitioner: Advocates B.L. Narasimhan, Kruti Parashar, Prince Kumar,

For Respondent: Mr. Mihir Ranjan (Special Counsel)