EPS-ECU Meant Solely For Use In Automobiles With Power Steering: CESTAT Delhi Classifies Same Under CTI 8708 94 00

Hence, the CESTAT classified the EPS-ECU and its sub-assembly under CTI 8708 94 00.

The Tribunal held so while deciding about the classification of EPS-ECU, sub-assembly of EPS-ECU and parts of EPS-ECU.

The Division Bench of Justice Dilip Gupta (President) and P.V Subba Rao (Technical Member) observed that “EPS-ECU is not an instrument or an apparatus but is a part of the power steering system. Merely because it is in the form of a PCB and other electronic components does not change it from a part of an automobile into an instrument or an apparatus”. (Para 31)

Facts of the case:

The appellant manufactures and supplies parts of automobiles and for this purpose it imported “electronic control units for electronic power steering” (EPS – ECU) and its parts through 127 bills of entry. The appellant classified the goods under Customs Tariff Item 8708 9400 as parts and accessories of motor vehicles in its self-assessment. According to the revenue, they are parts of motor vehicles and should be classified, as such. According to the appellant, since they are electrical/electronic parts they should be classified, as such and not as parts of motor vehicles.

Observations of the Tribunal:

The Bench found that EPS-ECU is used in cars with power steering to dynamically determine- based on the speed and torque of the car- how much assistance should be provided to the driver in steering and accordingly regulate the voltage supplied to the motor from the 12-volt battery.

If there is no EPS-ECU between the motor and the battery, the full 12-volts will be supplied to the motor and it will run at its full speed providing too much power to the driver in steering, observed the Bench.

The Bench also clarified that EPS-ECU is only meant for use in automobiles and it has no other use.

Finding that the sub-assembly is the same as EPS-ECU, except its cover, the Bench accepted the submission of appellant that it should be treated as an incomplete EPS-ECU and should be classified as complete EPS-ECU as per GIR 2(a).

The Bench went on to observe that any importer can self-assess goods by filing the Bill of Entry, and until the Bill of Entry is filed, the departmental officer cannot assess or take any action on it with respect to assessment.

While questioning as to how the departmental officers could have insisted that the goods should be classified in a particular heading in the Bill of Entry even before it was filed, the Bench explained that if the proper officer does not agree with the self-assessment by the importer, he can re-assess the duty and provide a speaking order.

“Differences on the question of classification of goods between the importer and the proper officer are a matter of everyday occurrence and where the proper officer disagrees with the classification by the importer and re-assesses the Bill of Entry, he is duty bound to pass a speaking order, unless the importer agrees to the change in classification in writing”, added the Bench.

The Bench observed that EPS-ECU is a microprocessor with certain other parts which receives information from the speed and torque sensors and processes it and issues instructions to regulate the assistance provided by the power steering to the driver, and therefore, EPS-ECU does not merit classification under CTI 9032 90 00.

Going further, the Bench clarified that since EPS-ECU is not an electrical board or panel, it does not merit classification under CTI 8537 10 00.

The CESTAT therefore dismissed Assessee's appeal and concluded that EPS-ECU and its sub-assembly deserve to be classified and were correctly classified under CTI 8708 94 00.

Counsel for Appellant/ Assessee: B.L. Narasimhan, Jyoti Pal, Anshita Khandelwal

Counsel for Respondent/ Revenue: S.K. Rahman

Case Title: M/s Mitsubishi Electric Automotive vs. Commissioner of Customs

Case Number: CUSTOMS APPEAL NO. 51294 OF 2022

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