Home Case Index All Cases Customs Customs + AT Customs - 2020 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (9) TMI 951 - AT - CustomsClassification of imported goods - split air-conditioners - classified at sub-heading no. 841510 of First Schedule Customs Tariff Act, 1975 at serial no. 49 or not - benefit of N/N. 85/2004-Cus dated 31st August 2004 denied - HELD THAT:- From heading no. 8415 of First Schedule to the Customs Tariff Act, 1975, it is seen that air conditioning machines comprise of a motor driven fan and elements for controlling humidity and temperature. Generally, and more particularly in the retail segment, such machines are either of ‘window or self-contained’ or ‘split system’ types. There are several other equipment which are designed for larger spaces and for applications that go beyond residential or commercial. In the structuring of the sub-headings, emphasis is placed on the ‘split system’ and, by default, the ‘window’ types. All other air-conditioning equipment are relegated to the residuary categorization and it is within such that ‘split air-conditioners’ finds deployment. From this, it can be inferred that ‘split system’ air conditioning machines and ‘split air-conditioners’ are distinct. Neither has the show cause notice nor the adjudicating authority forayed an elaboration of either; that these existed at the eight digit level under different sub-headings did not appear to have impressed itself, let alone the need for appreciating the distinction on the adjudicating authority - The additional feature, whose presence or absence, determines the sub-heading within the residuary category, has not been established as incorporated in the impugned goods. In the absence of such, customs authorities are not enabled to proceed to the tariff item below the sub-heading. The impugned order is flawed for that reason. The classification declared by the appellant at the time of import corresponds to the description of ‘split system’ and the scope of ‘split system’ is elaborated in the subheading notes in the Explanatory Notes to the Harmonised System of Nomenclature. From this, it can be inferred that the description corresponding to sub-heading 841510 is intended for ‘window’ and ‘split system’ air-conditioning machines - Undoubtedly, every article under heading no. 8415 has to have a cooling facility. Nevertheless, the adjudicating authority set out with the assumption that, irrespective of the cooling equipment in ‘split systems’, the cooling system in the impugned goods was a refrigerant unit. Neither is there any ground for such supposition in the show cause notice nor is there reason to conclude that the cooling source in the ‘split system’ was absent in the impugned goods and substituted by another. There is no descriptive restriction in sub-heading no. 841510 to conclude that heating capability is not intended for coverage by that tariff entry. The impugned order has failed to exclude applicability of description of ‘split systems’ to the impugned goods which would have entailed some knowledge of what that is. ‘Split systems’ are air conditioners that have two parts and these operate together to cool space. Likewise, it may heat space also without compromising conformity with the description corresponding to heading no. 84151010 of the First Schedule to Customs Tariff Act, 1975. It is only by exclusion from this description that the impugned order could have attempted an alternative classification. The General Rules of Interpretation, with emphasis on hierarchical elimination of non-conformity, precluded classification of the impugned goods under the general residuary description when conformity with the specific is not established as incorrect - the impugned goods are classifiable under tariff item no. 84151010 of First Schedule to Customs Tariff Act, 1975. Appeal allowed - decided in favor of appellant.
|