TMI Blog2018 (12) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... building’s water such as boiler of a commercial water heater. It is very apparent that FCUs are not Refrigerators, Freezers and other refrigerating or freezing equipment and neither are heat pumps and therefore in no way they would fall under GST Tariff Heading 8418 - FCUs would clearly be covered under GST Tariff Heading 85159000 as parts of Air Conditioning machines of Heading 8515. The plea of the applicant contending that their goods would be covered under 8418 on the basis of the Hon’ble Supreme Court’s decision in the case of CCE Delhi versus Carrier Aircon Ltd. [2006 (7) TMI 8 - SUPREME COURT OF INDIA] is not sustainable in view of the facts that the goods ‘chillers’ as discussed in this judgement had the basic function of chilling the water and were thus held by the Hon’ble Supreme Court to fall in Heading 8418 for Refrigerators and Freezers, whereas the basic function of a FCU is conditioning the temperature of a place or space and not freezing or refrigerating and therefore FCU would appropriately be covered under CTH 8415. Ruling:- The Fan Coil Unit is not covered under HSN Code 8418 but under HSN Code 8415 under Goods and Service Tax Act, 2017 - GST-ARA- 64/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... changed through PCB of unit. Heat Exchanger: Heat exchangers are group of copper coils arranged in rows with aluminium fins, where copper tubes carry chilled water, which absorbs heat from air passed over it by fan motor. PCB: PCB is the printed circuit board, also the brain of the Fan Coil Unit. It controls the fan speed and water flow depending upon logic as per set mode, set temperature, room temperature and in some cases also water temperature. There are different modes like cooling, dry, heat or fan mode depending upon the application of the unit. Main Drain Pan: Main drain pan are used for collecting condensate water generated at the heat exchanger during process of cooling. This water is drain out through drain pan through drainage lines through gravity of drain or drain water is pumped out using condensate drain pump. Filters: Filters are at the rear end of the fan coil units, through which air is sucked in by fan blowers. Filters are used to trap certain sizes of impure particles contained by the air to supply cleaner air in the cooling area. Main Casing: Main casing is the body containing and protecting all the above components in one box, FCU is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the interpretation of law; 9. That the applicant craves leave to add / modify any of the above ground during the course of hearing 03. CONTENTION - AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- 04. HEARING The case was taken up for Preliminary hearing on 04.09.2018 when Shri Mahesh Bhattar, C.A., along with Ms. Nikita Mehta, C.A. appeared and made contentions for admission of application . Jurisdictional Officer Sh. Hemant Deokate, Dy. Commr, Of S.T.(E-501) Nodal division - 10, Mumbai was appeared and stated that they will make submissions in due course. The application was admitted and called for final hearing on 19.09.2018, Sh. Mahesh Bhattar, C.A., along with Ms. Nikita Mehta, C.A. and Sh. K. K. Saraf, Advisor and Sh. Manish Banttar, Accounts head appeared and made oral and written contentions. Jurisdictional Officer was not present for final hearing. 05. OBSERVATIONS We have gone through the facts of the case. The issue put before us is in respect of a future transaction which would be on the lines thus - We find that the present application has been filed by the applicant with one main q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder:- HSN 8418 - Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps (other than air conditioning machines of heading 8415) In order to verify the sustainability of claims of the applicant about classifying FCU under HSN 8418, we first of all see as to what is a FCU, what is its use and whether it itself has independent existence and use and where it is actually used i.e whether in Air Conditioning or Refrigeration. We find that Fan Coil Unit (FCU) is a simple device consisting of a heating and or cooling heat exchanger or Coil and fan. It is a part of HVAC system found in residential, commercial and industrial buildings. A FCU is a diverse device sometimes using ductwork and is used to control the temperature in space where it is installed or serve multiple spaces. It is controlled either by a manual on/off switch or by a thermostat which controls the throughput of water to the heat exchanger using a control valve and/or the fan speed. Due to their simplicity and flexibility, FCUs can be more economical to install than ducted 100% Fresh Air Systems (VAV) or Central Heating Systems with air handling units or ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iff Heading which reads as under:- Note (2) : Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, part of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules : (a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings; (b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517; (c) all other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8487 or 8548. Further we fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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