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2020 (1) TMI 793 - APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKAClassification of goods - filters manufactured solely and principally for use by / in Indian Railways and supplied directly to Indian Railways - whether classifiable under HSN Heading 8421 or under HSN Heading 8607 of the Customs Tariff? - whether the classification of filter will change if the identical goods are supplied to a distributor instead Indian Railways directly, and the distributor in turn ejects supply to Indian Railways? - challenge to AAR decision. HELD THAT:- In the instant case, we find that the subject Filters falling under Chapter Heading 84.21 is excluded from being considered as a part for the goods under Section XVII by virtue of Note 2(e) to Section XVII, thereby failing to fulfill the very first condition above. Further, the subject Filters are also specifically included in Chapter Heading 84.21 as filtering apparatus and hence the third condition of the above General Notes is also not fulfilled. The only condition that is satisfied is that the subject Filters are suitable for use solely and principally ‘with the articles of Chapter 86. Since all three conditions are required to be fulfilled, which is not so in the instant case, the subject Filters cannot be considered as ‘Parts of railway locomotives’ and therefore, cannot be classified under Chapter Heading 8607. The correct classification of the subject Filters would be under Chapter Heading 84.21 of the Tariff. Thus, the subject Filters manufactured by the Appellant solely and principally for use by the Indian Railways and supplied directly the Indian Railways are classifiable under Chapter Heading 84.21 of the Customs Tariff - The classification of the subject goods Will not change if the Same are supplied to a distributor instead of Indian Railways and the distributor in turn affects the supply to the Indian Railways. The decision of Advance ruling authority upheld.
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