Home Case Index All Cases GST GST + AAAR GST - 2024 (3) TMI AAAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (3) TMI 675 - APPELLATE AUTHORITY FOR ADVANCE RULING, TAMILNADUClassification of goods - Bike and Scooter seat cover - to be classified under CTH 87089900 or not - rate of tax of 28% is correct or not - HELD THAT:- In the said manufacturing process the "U" Foam which is purchased from other dealers are cut to the shape of Two-Wheeler Seats and along with Rexine sheets are stitched and the said Seat Covers are fitted into the Two Wheelers like Bike and Scooter. Then they supply the same to the two-wheeler dealers and also to local market. As per the Appellant, these seat covers are meant for the protection of the seats and there is no comfort or convenience to the rider or the pillion rider. The main contention of the Appellant is that seat covers manufactured by them for two wheelers are ‘parts’ of seat and thereby, the goods are to be classified under 94019900. They contend that the finding of AAR that it is an ‘accessory’ to Two-wheeler falling under 87141090 is factually incorrect and as per the Rules of interpretation, seat cover is ‘part’ of the seat, which has a specific entry 94019900. From the definition of part, it is clear that ‘part’ per se means a portion of an equipment or a machinery which is essential to the functioning of that particular equipment or machinery. In other words, ‘part’ is an integral element of machinery or equipment without which the specific product cannot function. The ‘part’ in question should be so inextricably linked to the product that the product cannot be brought into use without the ‘part’ in question. As against this, an ‘accessory’ is an addition to the main product, which merely adds to its beauty or convenience or effectiveness. The seat covers are generally not manufactured or cleared by the O.E. manufacturer of motorcycle seats when the supply is made by them to the motorcycle manufacturer. Instead it is the dealers of motorcycles that sell the seat covers separately, on optional basis, to the purchasers of motorcycles - Hence seat covers are not integral element of seats and thus not by any means, part of the seat. ‘Seat covers’ are only accessories to the seat. The ‘two-wheeler seat covers’ are specifically covered under CTH 8714 10 90 and are taxable @ 14% CGST + 14% SGST - the lower authority (AAR) had ruled that two-wheeler seat covers merit classification under 8714 99 90, whereas the product is rightly classifiable under 8714 10 90, at applicable rates. Therefore, the ruling of the lower authority (AAR) is modified to the extent of CTH, whereas the rate of tax remains the same.
|