DBK Tariff Classification

[Pradeep Jain]

We had been exporting the Automobile components to USA and UK. And availing export benefits 5% under DEPB Scheme vide DEPB Sl. No. 442 “ Spline Hub for Clutch Plate “ since Nov.2008. In the month of Aug’2011 Customs department had raised Query memo 27th August’2011 that some components such as Counter Shaft, Auxiliary Gear, Counter Shaft 2nd , Clutch sliding, splitter and Clutch sliding ( Range) classified item as “ Spline Hub for Clutch “and claiming DEPB 5% under Sr. No.442 of Product code 61. DEPB is admissible only on Spline hub for Clutch plate. Written submission on about query memo is made to the Customs Department. But neither reply is given nor Show Cause Notice is issue till date. After that since Oct’2011 DEPB has been withdrawn and Duty Draw-back( DBK) is introduced. The same product item, i.e. “ Spline Hub for Clutch “ vide tariff classification no. 8708026 ,is mentioned on ARE-1 and Shipping Bills by us, since it is more appropriate to our product. However, since the matter is not resolved, so far, Customs department has been assessing our Shipping Bills provisionally since beginning of DBK i.e. Oct.’2011 to till date. Further, “without prejudice” reserving our right to defend our contention on the issue, we want to adopt the DBK tariff item as under:- 1- Tariff item 8708067-“Identifiable ready to use machined parts/ components made wholly or predominantly of Alloy Steel ( not less than 90% by weight ) manufactured through Forging process, not elsewhere specified” vide Customs Notification no. 92/2012-Customs (N.T.) dated 4th Oct’2012, OR 2- Tariff item 8708099 others Now our query is that - if we change our stand to stop the litigation with the Customs Department,- -will effect the matter covered by the department through above said Query Memo. -What intimation is to be given to the department, if we go for change in tariff code.

Regards

Pradeep Jain

[YAGAY andSUN]

If you intent to change the tariff code of the above item, then, there should be concrete reason for it.  Technical aspects (Design Drawings, Photographs, BOM etc) of the product should be submitted to substantiate your contentions.

[Pradeep Jain]

Dear Shri Pradeep Khatri,

Thank you  very much for your response.

 Again Wish to take your opinion on   issue raised in above query as under:-

1) As desired by the department , We have already submitted the technical writ-up for Spline-Hub for Clutch Plate with  our written submisson , as mentioned above. And will be submitted again at the time of , in case of change in DBKtariff classification. It's Ok.

2)  query  was that  ( pl. refer last 4 lines of above query )- if we change our stand to stop the litigation with the Customs Department,- -will it effect the matter covered by the department through above said Query Memo. -What intimation is to be given to the department, if we go for change in tariff code.

3) Is there  any need to given prior intimation to the Customs Department ; to avoid the charge of   suppression of facts, if any ?,  If yes then followings ,sentense in the letter will serve  the purpose to protect our right in old disputed period.

"Further, “without prejudice” reserving our   right to defend our contention on the issue, we want to adopt the DBK tariff item as under:- 1- Tariff item 8708067-“Identifiable ready to use machined parts/ components made wholly or predominantly of Alloy Steel ( not less than 90% by weight ) manufactured through Forging process, not elsewhere specified” vide Customs Notification no. 92/2012-Customs (N.T.) dated 4th Oct’2012, OR 2- Tariff item 8708099 others "

 

Regards

Pradeep Jain

 

AI Summary

Tariff classification dispute: changing code requires technical substantiation and prior intimation to customs to avoid suppression risk. The exporter faces a tariff classification dispute over whether components qualify as Spline Hub for Clutch for export benefits; Customs queried earlier claims and has provisionally assessed shipping bills since DEPB was replaced by Duty Drawback. Any change of declared DBK tariff code should be supported by concrete technical substantiation (design drawings, photographs, BOM, technical write up) and communicated to Customs. The exporter can adopt an alternative DBK heading for future shipments subject to a 'without prejudice' reservation preserving rights for the disputed period; prior intimation accompanied by technical evidence is advisable to avoid allegations of suppression of facts.