The Skoda Auto car manufacturer is involved in a dispute with the Indian customs department regarding the classification of imported car components and the delay in completing the customs assessments. The department has issued a notice demanding duty at Completely Knocked Down (CKD) rates on imported car components for the past 12 years, threatening to confiscate the goods. Skoda Auto claims that the delays are not due to any inaction by the authorities, but rather to the complexity of the case and the need for coordinates and data from vendors.
The customs commissioner has titled back at Skoda, arguing that the company’s classification of the parts and components was incorrect, and that they should have been classified as CKD kits. The commissioner also stated that the customs department’s prolonged provisional assessment period was due to ongoing Special Valuation Branch (SVB) investigations, which scrutinize import transactions between related parties.
In the affidavit, the commissioner claimed that the company failed to provide necessary information and documents on time, and that they had not raised any objection to the assessments being provisional in nature. The department also presented documentary evidence, including a Skoda email indicating an intention to finalize the pending assessments by June 2024, along with an action plan for obtaining data from foreign suppliers.
Additionally, the customs department cited a Directorate of Revenue Intelligence (DRI) investigation that uncovered a significant number of agreements entered into by Volkswagen Group Sales India Pvt. Ltd. that were allegedly concealed by Skoda. The department also pointed out that Skoda had renewed a continuity bond, which covers multiple import shipments, even after the issuance of the show-cause notice, signifying their acceptance of the provisional assessments.
The customs commissioner urged the Bombay High Court to dismiss Skoda’s writ petition and allow the adjudication process to proceed, promising to appoint an adjudicator and finalize the provisional assessments within six to eight months.