Ranger And Brutus Vehicles Imported By Polaris India Are Not Designed For Transportation Of Persons: CESTAT

The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that Ranger and Brutus Vehicles imported by Polaris India are not designed for the transportation of persons.

The bench of Justice Dilip Gupta (President) and Hemambika R. Priya, (Technical Member) has observed that the Ranger (non-electric) Vehicles deserve to be classified under CTH 8704 and the Ranger (electric) and Brutus Vehicles deserve to be classified under CTH 8709.

The appellant/assessee, Polaris India, has appealed against an order passed by the Principal Commissioner of Customs (Import). The Principal Commissioner has confirmed the demand for customs duty under Section 28(4) of the Customs Act, 1962, with interest and penalty. A redemption fine has also been imposed in lieu of confiscation under Section 125.

Polaris India is a wholly owned subsidiary of Polaris Industries Inc., USA. Polaris USA designs, engineers, manufactures and markets innovative, high-quality off-road vehicles, including all-terrain vehicles, snowmobiles, motorcycles, and electric-powered vehicles for various applications.

A show cause notice was therefore issued to Polaris India, proposing rejection of the declared classifications of ATVs in the Bills of Entry filed and reclassifying them under CTH 8703.

The appellant contended that the Principal Commissioner has not discharged the burden to prove that the correct classification is Customs Tariff Item 8703 10 10 or 8703 10 90. A perusal of CTI 8703 10 10 and CTI 8703 10 90 shows that for a motor vehicle to be classified under CTH 8703, it must be principally designed for the transport of persons first. The vehicle is principally designed for the transport of persons and is required to be proved by the Department upon scrutiny and examination of the vehicles in dispute if the Department intends to classify the Vehicles under CTH 8703 by rejecting the classification adopted by the appellant.

The department contended that ATVs that are used off-road are for recreational purposes and are principally designed for the transportation of people and not goods. As such, the classification of the imported goods under CTI 8704 31 90, CTI 8704 90 12, and CTI 8704 90 90 is not appropriate. These goods are specially designed vehicles for the transport of persons, and accordingly, they are appropriately classified under CTI 8703 10 90 and CTI 8703 10 10.

The tribunal held that even if passengers are transported in the Vehicles, it would not mean that the Vehicles cannot be classified under CTH 8704 and CTH 8709. It would not be appropriate to refer to the website of Polaris USA. The information conveyed therein may not mention that the Vehicles are for the transportation of goods, but that would not conclusively prove that the Vehicles are not for the transportation of goods.

Case Title: Polaris India Private Limited Versus Principal Commissioner of Customs

Case No.: Customs Appeal No. 52881 Of 2019

Date: 03.07.2023

Counsel For Appellant: Harish Bindumadhavan

Counsel For Respondent: Jaya Kumari

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