TMI Blog2024 (3) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... e 'part' in question should be so inextricably be linked to the product that the same cannot be brought into any form without the 'part' in question. From the write-up, it is found that these cushion suspension wire is now-a-days used instead of coil springs and these are used both in front and back seats of a car. Also these are forming part of the basic skeleton steel structure of the seats. During personal hearing, the Applicant displayed the entire steel structure and explained how the cushion suspension wire is used in the steel structure. We observed that, without the said item, the basic structure of the seat cannot be achieved and basic function of cushion effect in the car seats cannot be achieved. Hence, the said item is a part of the seat, as it is one of the building blocks of the steel structure and an integral part of the seat. The steel hooks are used to keep the steel wires in place and in taut position, so the structure is achieved and also the functional usage, i.e. to give cushion effect, is also achieved. During personal hearing, the Applicant displayed the entire steel structure and how the steel hooks are used in the steel structure. Hence, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of car seat Cushion Suspension wires and steel hooks. They are registered under the GST Acts with GSTIN: 33ADZPM4614Q1ZQ. 2.1 The Applicant submitted a copy of challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. 3.1. In their application for Advance Ruling, the Applicant has stated that - They are a MSME unit engaged in the manufacture of two items.- (i) Car Seat Cushion Suspension Wire (ii) Steel hooks The write-up of the two items are as below: (i.A) Car Seat Cushion Suspension Wires: The main raw material for the manufacture of Cushion Suspension wire is Spring Steel Wires. This raw material Spring Steel wires comes in the form of Coils. These spring coils are loaded in wire-forming CNC Machines. The required shapes of these spring coils are programmed in the CNC machines. The spring coils are converted into Cushion Suspension Wires in the CNC Machine. The photo of Cushions Suspension wires is attached. The cushion suspension wires are given individually sometimes the customers ask for pairs. When an order comes for pairs. Two Cushion Suspension Wires are joined using the plastic coated steel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he First Schedule shall, so far as may be, apply to the interpretation of this notification. They are engaged in the manufacture of Cushion Suspension Wires and Steel hooka, which are used as parts of the Car Seating System and they have been classifying both these products under HSN 87089900. Entry in the Notification No. 1/2017-C.T.(Rate) dated 28-6-2017 Sch. No Serial Number Chapter/ Heading/ Sub-heading/ Tariff item Description of Goods Tax Rate IV 170 8708 Parts and accessories of the motor vehicles of headings 8701 to 8705 [other than specified parts of tractors] CGST 14% SGST 14% Their competitors are classifying Cushion Suspension Wires and Steel hooks under the following classification. Entry in the Notification No. 1/2017-C.T.(Rate) dated 28-6-2017 Sch. No Serial Number Chapter/ Heading/ Subheading/ Tariff item Description of Goods Tax Rate III 435A 9401 [other than 9401 10 00] Seats (other than those of heading 9402), whether or not convertible into beds, and parts thereof [other than seats of a kind used for aircraft] CGST 9% SGST 9% The Para 3 (a) of the General rules for the interpretation to Customs Tariff Act, 1975 runs as under: 3. When by application of rule 2(b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (including shock absorbers) - Other parts and accessories: 8708 91 00 -- Radiators and parts thereof 8708 92 00 -- Silencers (mufflers) and exhaust pipes; parts thereof 8708 93 00 -- Clutches and parts thereof 8708 94 00 -- Steering wheels, steering columns and steering boxes; parts thereof 8708 95 00 -- Safety airbags with inflater system; parts thereof 8708 99 00 -- Other Tariff Item Description (1) (2) 9401 SEATS (OTHER THAN THOSE OF HEADING 9402), WHETHER OR NOT CONVERTIBLE INTO BEDS, AND PARTS THEREOF 9401 10 00 - Seats of a kind used for aircraft 9401 20 00 - Seats of a kind used for motor vehicles . - Swivel seats with variable height adjustment: 9401 31 00 - - Of wood 9401 39 00 - - Other - Seats other than garden seats or camping equipment, convertible into beds : 9401 41 00 - - Of wood 9401 49 00 - - Other - Seats of cane, osier, bamboo or similar materials: 9401 52 00 -- Of bamboo 9401 53 00 -- Of rattan 9401 59 00 -- Other - Other seats, with wooden frames : 9401 61 00 -- Upholstered 9401 69 00 -- Other - Other seats, with metal frames : 9401 71 00 -- Upholstered 9401 79 00 -- Other 9401 80 00 - Other seats - Parts : 9401 91 00 - - Of wood 9401 99 00 - - Other From the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant merit to be classified under HSN 87089900, for the following reasons: Tariff heading 9401 covers Seats including seats of a kind used for motor vehicles . 94019900 covers Parts of such seats. HSN explanatory notes states that: PARTS - The heading also covers identifiable parts of chairs or other seats, such as backs, bottoms and arm rests (whether or not upholstered with straw or cane, stuffed or sprung), and spiral springs assembled for seat upholstery. Thus it could be seen that HSN 94019900 covers only those items which constitute as specific part of a seat like backs, bottoms, arm rests etc. They do not cover those items which are basically fitted under a seat on the floor of the motor vehicle. Seat could be complete without such items like seat cushion suspension wires and steel hooks which are supplied by the applicant. The goods supplied by them are not essential parts of a seat. A 'part' is an essential component of the whole without which the whole cannot function. They are basically used in the track assembly which has a steel structure in the shape of seats. The Cushion suspension wires are used between this steel structure. The seat foam is kept ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication as to whether the items viz. 'car seat Cushion Suspension wires' and 'Steel hooks' manufactured by them will fall under HSN 87089900 thereby attracting CGST of 14 % plus SGST of 14% or will fall under HSN 94019900 thereby attracting CGST of 9% plus SGST of 9%. It is pertinent to see both the entries in the Notification No. 01/2017-CT(Rate) dated 28.06.2017, before arriving at a decision, which is as follows: Entry in the Notification No. 1/2017 -C.T.(Rate) dated 28-6-2017 Sch. No Serial Number Chapter/ Heading/ Sub-heading/ Tariff item Description of Goods Tax Rate IV 170 8708 Parts and accessories of the motor vehicles of headings 8701 to 8705 [other than specified parts of tractors] CGST 14% SGST 14% Entry in the Notification No. 1/2017 -C.T.(Rate) dated 28-6-2017 Sch. No Serial Number Chapter/ Heading/ Subheading/ Tariff item Description of Goods Tax Rate III 435A 9401 [other than 9401 10 00] Seats (other than those of heading 9402), whether or not convertible into beds, and parts thereof [other than seats of a kind used for aircraft] CGST 9% SGST 9% From the bare reading of the two sub-headings, reproduced above, it is clear that Chapter Heading 8708.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the said item is a part of the seat, as it is one of the building blocks of the steel structure and an integral part of the seat. 6.6. As per the write-up submitted by the Applicant regarding 'Steel hooks', they have stated that - In the car seats, to give strength to the track assembly, in addition to the Cushion Suspension wire, the steel wires are used. At the end of these steel wire steel hooks are used. Here again, these hooks are used to keep the steel wires in place and in taut position, so the structure is achieved and also the functional usage, i.e. to give cushion effect, is also achieved. During personal hearing, the Applicant displayed the entire steel structure and how the steel hooks are used in the steel structure. Hence, we are of the opinion that the said item is a part of the seat, as it is one of the building blocks of the steel structure and an integral part of the seat. 6.7. Further, we find that the Para 3(a) of the General rules for the interpretation to Customs Tariff Act, 1975, states that the heading which provides the most specific description should be preferred to the heading providing for a general description. On an analysis of Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with. We find that as per the clause (c), a part must not be more specifically included elsewhere in the nomenclature. In paragraph C, at serial number (12) vehicle seats of heading 9401 is explicitly excluded from the Section XVII as vehicle seats is covered more specifically by other heading under 9401. This clearly establish that vehicle seats of 9401 being excluded from Section XVII will not fall under 8708. 6.9. Further, we also observe the HSN explanatory notes in respect of tariff item 8708, which are reproduced below:- This heading covers parts and accessories of the motor vehicles of headings 87.01 to 87.05, provided the parts and accessories fulfil both the following conditions: (i) They must be identifiable as being suitable for use solely or principally with the above-mentioned vehicles; and (ii) They must not be excluded by the provisions of the Notes to Section XVII (see the corresponding General Explanatory Note). As per above notes, both the conditions prescribed under Clause (i) and (ii) need to be fulfilled for classifying parts and accessories of motor vehicle. As per clause (ii), parts and accessories must not be excluded by the provisions of notes of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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