Brake Hose Bracket Is Motor Vehicle Part, Cannot Be Classified As Metal Bracket For Customs Duty: CESTAT Delhi

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi, has held that a bracket used in brake hose assemblies should be classified as a motor vehicle part based on its principal use for customs duty purposes.

It also held that a connector specifically designed for automobile brake systems could not be classified as a generic plumbing fitting.

A Bench comprising Officiating President Dr. Rachna Gupta and Technical Member Hemambika R. Priya dismissed the appeal filed by Nichirin Imperial Autoparts India Pvt. Ltd. against the customs duty demand arising from alleged misclassification of imported automobile components.

On the bracket, the tribunal observed,

“There is no evidence to suggest that the goods are excluded by the provisions of Section XVII. Hence, both the conditions of Explanatory Notes to Chapter 87 that the goods should be suitable for use solely or principally with the motor vehicles of Heading 8701 to 8705 and that they should not have been excluded by the provisions of Section Notes, stands fulfilled.”

The dispute arose from a customs audit which found classification discrepancies in nine products imported by the company. The company accepted several discrepancies and paid the differential duty. The classifications of the Protector Tube, Bracket and Connector remained contested.

The company had classified the Bracket under entries covering brackets and other articles of iron or steel. The Department proposed classification under the entry covering other parts and accessories of motor vehicles.

The tribunal noted that the tariff specifically covers parts and accessories of motor vehicles. It also referred to the Section Notes, under which articles covered by the section dealing with vehicles are excluded from the section dealing with base metals and articles made from them.

The Bracket was used in manufacturing brake hose assemblies and was not a general-purpose article. The company had also described it as an automobile part in its import documents. The tribunal therefore upheld its classification as a motor vehicle part and the consequential differential duty demand.

The company had classified the Connector under the entry covering plastic tubes, pipes, hoses and fittings. The tribunal relied on the Chapter Note which excludes parts of vehicles from the chapter dealing with plastics.

It further found that the Connector was used in brake hose assemblies to regulate brake-fluid flow and was specifically designed for automobile brake systems. It therefore could not be treated as a generic plumbing fitting.

The tribunal also upheld the classification of the Protector Tube after finding that it was made entirely of PVC.

On limitation, the tribunal noted that the self-assessment system requires an importer to make a true and correct classification. It found that the company had earlier used the classifications later proposed by the Department, but subsequently changed them, resulting in a customs duty benefit.

The tribunal held that the wrong classification was intentional, upheld the extended limitation period, and found no reason to interfere with the penalties. It accordingly affirmed the impugned order and dismissed the appeal.

For Appellant: Gurdeep Singh and Jaideep Singh Ahuja, Advocates

For Respondent: Shiv Shankar, Authorised Representative