CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH- COURT NO. I Customs Appeal No. 50951 of 2021 (Arising out of Order-in-Original No. 09/2021/MKS/Pr. Commr./ICD-Import/TKD dated 17.03.2021 passed by the Principal Commissioner of Customs, (Import), ICD, Tuglakabad, New Delhi.)

M/s Motherson Bergstorm Hvac Solutions .…Appellant Pvt. Ltd.

A-18, Sector-2, Gautam Budh Nagar, Uttar Pradesh-201301 Versus Principal Commissioner of Customs, .…Respondent (ICD) Tuglakabad- New Delhi New Delhi-110037 APPEARANCE:

Shri B.L. Narasimhan, Shri Shubham Jaiswal, Shri Anurag Kapoor and Shri Ashwin Sundaram, Advocates for the Appellant Shri Rajesh Singh, Authorised Representative of the Department CORAM:

HON’BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON’BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)

DATE OF HEARING: December 16, 2024 DATE OF HEARING: June 05, 2025 FINAL ORDER NO. 50846/2025 JUSTICE DILIP GUPTA M/s Motherson Bergstorm Hvac Solutions Pvt. Ltd.¹ has filed this appeal to assail the order dated 17.03.2021 passed by the Principal Commissioner of Customs² adjudicating two show cause notices dated 29.09.2020 & 10.11.2020. The Principal Commissioner has rejected the classification of the imported goods self-assessed by the appellant

1 the appellant

2 the Principal Commissioner under different Customs Tariff Item³ of the First Schedule to the Customs Tariff Act, 1975⁴ and ordered for re-assessment under CTI 8415 90 00 as parts of air conditioner. The Principal Commissioner has also confirmed the demand of differential basic customs duty under section 28(1) of the Customs Act, 1962⁵ with interest under section 28AA of the Customs Act. The Principal Commissioner, however, held that the goods are neither liable for confiscation under section 111(m) of the Customs Act nor penalty can be imposed under section 112(a)

(ii) of the Customs Act.

2. The dispute in the present appeal is as to whether Blower, Filter, Water Valve Assembly, Control Panel, Module JCBHP and Thermostat (hereinafter referred to as “goods”) are classifiable as parts of air conditioner under CTI 8415 90 00 as claimed by the department or are classifiable under CTI 8414 59 30, CTI 8421 39 90, CTI 8481 10 90, CTI 8538 10 90 and CTI 9032 10 10 as claimed by the appellant.

3. The appellant is engaged in the import, manufacture and sale of parts and accessories of Automobiles Air Conditioning machines. During the period 03.08.2018 to 01.10.2020, the appellant imported the disputed goods and classified them under various Customs Tariff Items indicated above and paid basic customs duty @ 7.5%/15%, social welfare surcharge @10% and Integrated Goods and Service Tax @ 18% in terms of the classification adopted by the appellant in the self-assessed Bills of Entry.

4. Two show cause notices dated 29.09.2020 and 10.11.2020 were issued to the appellant alleging that the correct classification of the

3 CTI

4 the Customs Tariff

5 the Customs Act

disputed goods would CTI 8415 90 00 as parts of air conditioners and, accordingly, differential duty demand with interest and penalty was proposed.

5. The appellant filed a detailed common reply dated 02.02.2021 to the aforesaid two show cause notices and submitted that the disputed goods were correctly classified by the appellant.

6. The Principal Commissioner held that the disputed goods are classifiable under CTI 8415 90 00 as parts of air conditioners and, accordingly, confirmed the differential duty demand but the proposal in the show cause notices for confiscation of the disputed goods and consequential imposition of penalty were dropped. After referring to Note 2 to Section XVI and HSN Explanatory Notes to the relevant Customs Tariff Headings⁶, the Principal Commissioner held that the goods imported by the appellant are parts of automobiles air conditioning, and the tariff heading claimed in the Bills of Entry are not specific but are “others” under the respective tariff headings. The Principal Commissioner, therefore, concluded that Note (a) t