TaxTMI 
TaxTMI 
2026 (8) TMI 1808
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....r Cargo Complex, Sahar, Mumbai. 3. The petitioner - Mahindra & Mahindra Limited has imported Battery Management Systems ("BMS", for short) and Cell Supervisory Circuits ("CSC", for short), for the use in its Electric Vehicle ("EV", for short) manufacturing operations, specifically for manufacturing lithium-ion battery packs. The petitioner has classified 'BMS' under CTH 9032 8990 and 'CSC' under CTH 8537 1000 / 8537 1090 of the First Schedule of the Customs Tariff Act, 1975 and has been availing the concessional rate of Basic Customs Duty applicable at 2.5% under Serial No. 512 of the Notification No. 50/2017-Customs dated 30/06/2017 ("Exemption Notification"), which gives an impetus to manufacturing of battery packs for EVs in India. 4. Sr. No. 512 is reproduced herein for ease of reference:- S.No. Chapter or Heading or subheading or tariff item Description of goods Standard rate IGST Condition No. (1) (2) (3) (4) (5) (6) 512 85 or any other Chapter (a) Parts, components and accessories except Lithiumion cell and Printed Circuit Board Assembly (PCBA) for use in manufacture of Lithium-ion battery and battery pack; (b) Sub-parts ....
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....e, Noida 2004 (173) E.L.T. 337 (All.); Panama Chemical Works vs. Union of India 1992 (62) E.L.T. 241 (M.P.) and Neena Uppal vs. The Union of India 2024 (3) TMI 704 - Bombay High Court, in support. 8. Learned counsel for respondent No. 2, on the other hand, invited our attention to the findings rendered by the respondent No. 2 and submitted that on an overall conspectus and after considering all the materials, respondent No. 2 has correctly arrived at a finding that the products of the petitioner are excluded from Sr. No. 512 of the Exemption Notification. A preliminary objection is raised that the petitioner has a statutory remedy of appeal under Section 129A of the Customs Act before the Customs, Excise and Service Tax Appellate Tribunal ("CESTAT") as the same is an appealable order. 9. Learned counsel for respondent No. 2 relying on the affidavit-in-reply submitted that the Importer had self-classified the items BMS (Battery Management System) and CSC (Cell Supervisory Circuit) under CTI 9032 8990 and 8537 1000/8537 1090 respectively. It is submitted that the dispute involved in the present case pertains to the correct classification of BMS and CSC under the Customs Tariff ....
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....y packs, but specifically excludes Printed Circuit Board Assemblies (PCBAs). Since the imported BMS and CSC are found to be PCBAs classifiable under CTI 85079090, they fall within the exclusion provided under Sr. No. 512. Consequently, the benefit of the said exemption notification is not available to the petitioner. Further, Sr. No.139 of Schedule IV of Notification No. 01/2017-Integrated Tax (Rate) dated 28/06/2017 covers goods falling under Heading 8507 and prescribes IGST at the rate of 28%. Further, merely because the VJTI report opines that the goods are technologically advanced products and not ordinary PCBAs does not alter their essential character or tariff classification. The adjudicating authority has therefore rightly held that the observations contained in the expert opinion do not negate the applicability of Heading 8507 and has assigned cogent and reasoned findings while arriving at the classification adopted in the OIO. Hence, the allegation that the expert opinion was ignored, arbitrarily rejected or that a counter-expert opinion was mandatory is factually incorrect and legally untenable. 11. It is further submitted that in terms of Chapter Note 3 to Chapter 85 ....
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....n Notification. 14. The Exemption Notification gives an impetus to manufacturing of battery packs for EVs in India. The claim of the petitioner is that BMS and CSC are not part of PCBAs. For that purpose, they relied upon the detailed and independent report of VJTI. VJTI concluded after a physical inspection of the products and detailed component-level analysis that the products cannot themselves be understood as PCBA used in the manufacture of battery packs. Even in the context in which the Exemption Notification is issued, which gives an impetus to manufacturing of battery packs for EVs in India, the question is what is the worth of the VJTI's report and should it have been discredited without there being a scientific base or a counter-expert opinion. It is the submission of the learned Senior Advocate for the petitioner that the manufacturing of EVs in India is being encouraged and therefore, the Exemption Notification has to be viewed from that angle. 15. In Commissioner of Income Tax vs. Bharti Cellular Ltd. (supra), Their Lordships in paragraph 11 observed thus:- "11. Before concluding, we are directing CBDT to issue directions to all its officers, that in such....
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....z Ayurvedics (supra), Panama Chemical Works (supra) and Neena Uppal (supra) are authorities for the proposition that where classification or taxability turns on specialised technical or scientific considerations, the adjudicating authority is bound to meaningfully evaluate expert opinion, and, if it seeks to disagree therewith, it must do so only on the basis of commensurate expert or scientific material and not on subjective assumptions. 18. The impugned order has simply brushed aside the opinion of the VJTI by observing that it is not relevant. The petitioner does not say that PCBAs are not excluded from the purview of the Exemption Notification. The petitioner's case is that the products BMS and CSC are not part of PCBAs, in support, the petitioner had relied upon the expert opinion of the VJTI. The petitioner's challenge is to the manner in which a specialised technical issue has been adjudicated. 19. We are satisfied that the VJTI's expert opinion has been brushed aside without a reasoned technical rebuttal or counter-expert opinion. In a given case, respondent No. 2 may well have been justified in forming an opinion after considering all the technical material placed be....