Page 294 - ELT_15th July 2020_Vol 373_Part 2

276 EXCISE LAW TIMES [ Vol. 373
India for further sale with the simple screw driver technology. It is also matter of
fact that the parts such as Power Base, Gear Box were imported in assembled
forms and not in CKD condition and thus these crucial parts were assem-
bled/ready to use components for further assembly of ‘Segway’ product.
20. For deciding the appropriate classification for imported consign-
ments of the Segway in CKD condition it will be appropriate to have look at the
relevant Customs Tariff Headings 8711 and 8714.
21. It can be seen that Chapter 8711 covers primarily motorcycles and
like products which includes mopeds, side cars, scooters as well as electrically
operated bicycles. It is relevant to mention here that Harmonization Committee
of the World Customs Organization in its 58th Session of the Committee has fur-
ther elaborated the scope of classification under Chapter Heading 8711 to cover
the products such as self-balancing, electrically power two wheel transportation
devices which are known by various names, such as, hover board, smart scooter,
drift vehicle. The relevant extract is reproduced here below :-

“No. Product Classifi- HS Codes Classifi-
Description cation considered cation
rationale
17 Self-balancing, electrically - 8711.60 87.11 and GIRs 1
powered, two-wheeled trans- (HS 2017) 95.03 and 6
portation device (commercially
known as “hoverboard”,”smart
Scooter”, or “drift Vehicle”),
designed for use within low
speed areas such as pavements
(sidewalks), paths, and bicycle
lanes. The maximal speed of the
device is 10 km/h and maxi-
mum distance per charge is 15 -
20 km.

The Segway product which is the subject matter of this dispute also falls under
this very category.
22. It can also be seen that as per the interpretative rules to the Customs
Tariff Act, the general rule for interpretation of the Schedule II provides as
follows :-
“Rule 2(a) : Any reference in a heading to an article shall be taken to include
a reference to that article incomplete or unfinished, provided that, as pre-
sented, the incomplete or unfinished article has the essential character of
the complete or finished article. It shall also be taken to include a reference
to that article complete or finished for falling to be classified as complete or
finished by virtue of this rule presented unassembled or disassembled.”
23. The above-mentioned Rule 2(a) makes it clear that any product,
which is imported in the form of completely knocked down condition (CKD) and
if such components imported in CKD condition have all the essential ingredients
to work as a complete vehicle after assembly of the same, in that case such com-
ponents need to be classified as a complete motor vehicle, motorcycle etc. In the
present case it has very categorically been established that the products which
were imported were completed assemblies of the components when put together

EXCISE LAW TIMES  15th July 2020  294