HC Issued Notices Union on Imposing Customs Duty Over the Imported Lithium-Ion Cells

 Hyderabad: The Telangana High Court on Wednesday questioned the Union government about the stand taken by the Director of Revenue Intelligence ( DRI) regarding calculating a 20 per cent customs tax on the firms which import lithium-ion cells for manufacturing the lithium-ion battery packs, which are used in the electric vehicles and Hybrid vehicles, instead of five per cent.

The High Court issued notices to the Union finance ministry, director-general of DRI, principal commissioner of customs at Hyderabad and others to submit their contentions within eight weeks.

The Division Bench comprising Justice P. Sam Koshy and Justice N. Tukaramji was dealing with a petition filed by M/s Cygni Energy Private Ltd, which challenged the seizure proceedings issued by the DRI – Hyderabad unit against its finished products of lithium–ion battery packs. The DRI issued seizure proceedings against the Rs 25 crore worth of finished goods of the petitioner company on December 15 on charges of evading customs duty while importing the lithium-ion battery/battery module/battery pack by mis-declaring the said imported goods as lithium-ion cells and wrongly claiming the benefit of the Exemption Notification No. 050/2017. The DRI officials said that a 20 per cent customs tax has to be paid, whereas the firm is paying only five per cent.

Senior counsel Bollam Chandrasen Reddy, representing the petitioner company, brought to the court’s notice that one of the provisions in the Exemption Notification stipulated only a 5 per cent basic customs duty on the imported lithium-ion cells. The senior counsel further submitted that these ion cells are not in ready-for-use condition and cannot be classified as the battery as there are typically hundreds of lithium-ion cells used in manufacturing battery packs for electric vehicles.

Considering the submissions, the court issued stay orders on implementing seizure proceedings issued by the DRI officials against the petitioner company.