TMI Blog2020 (7) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, Hydraulic items(all types), Mandrel assembly, Nozzle Assembly, Plate assembly, Panel assembly, Support Assembly and Sleeve Assembly are classifiable as parts under CTH 8710 0000 - Dowel Pin, Gasket Assembly, Stiffner, Clip Assembly, Connector Assembly, Needle Bearing and Planet Pinion are not classifiable under CTH 8710 000. If the vendor is supplying parts under an HSN code other than 87100000, is it necessary that it has to be supplied under the same HSN code on what the vendor is charging? - HELD THAT:- Classification is independent of the buyer or seller and depends only on the goods. - TN/15/AAR/2020 - - - Dated:- 20-4-2020 - MS. MANASA GANGOTRI KATA, I.R.S., AND THIRU KURINJI SELVAAN V.S., M.SC., (AGRI.), M.B.A., MEMBER Note : Any Appeal against the Advance Ruling order shall be filed before the Tamilnadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Strip Assembly; Sub-Assemblies; Support Assembly; Thyristor; Torsion Bar; Tube Assembly; Turret; Twist Drill; Valve Assembly; Washer( Rubber made or Steel made); Wedge; Worm Wheel, Worm Gear, Worm Shaft; Yoke Assembly. 5. If the vendor is supplying parts under an HSN code other than 87100000, is it necessary that it has to be supplied under the same HSN code on what the vendor is charging? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of ₹ 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2. The Applicant has stated that their main activity is manufacturing Tank and Tank Parts. Tank is completely assembled in HVF, whereas some parts of Tank are manufactured separately in HVF and some parts of Tank are procured from outside vendors on the specification given by HVF. 2.1 The applicant is of the view that the HSN code for Tank is under the tariff item 87100000- Tank and other armoured fighting vehicles, motorized, whether or not fitted with weapons and parts of such vehicles under Section XVII-Vehicles, Aircraft Vessels and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . S/Shri. H.S.Manoharan, Auditor and A.Kannan, Junior Works Manager of the Applicant Company appeared for the hearing. The representatives stated that some parts of tanks are classifiable under Chapter $37 only and some of these parts are of general use. They furnished the decision of Hon ble Supreme Court in the case of Commissioner of Central Excise vs. BHEL = 2018 (2) TMI 1112 - SUPREME COURT . They have relied on the decision of Hon ble Supreme Court in the case of Commissioner of Central Excise Vs. BHEL [12018) 90 taxmann.com 297 (SC)] = 2018 (2) TMI 1112 - SUPREME COURT wherein the Apex Court has held that 7 ..we are of the view that the Primary Authority as well as the First Appellate Authority was perfectly justified in coming to the conclusion that the components of the boilers cleared as parts but essential to put into operation the boilers, would be classifiable under sub-heading 8402.10 and not as claimed by Revenue under sub-heading 8402.90 . The above decision is on the question whether the essential components/parts of a boiler cleared by the assessee would attract duty under sub-heading 8402.10-All goods other than parts or 8402.90-Part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tank model T-90 T-72. Some parts called as special tools accessories are part of maintenance Kit of Tank. The others are spares for replacement of parts in Tank. All are supplied to the Central Army Depot. They stated that all these parts should be classified at HSN 8710 at 12% as parts of tank. The State Jurisdictional Officer submitted in writing that they are parts of general use. The applicant submitted that in the original application classification of 84 parts were sought. However, of these only 17 items are being supplied by them and the rest are items which they receive/procure from vendors. Hence, they stated that classification is sought only for the 17 parts as detailed below: Casing Assembly; Clip Assembly; Connector Assembly; Dowel Pin; Gasket Assembly; Hydraulic items(All Types); Mandrel Assembly; Needle Bearing; Nozzle Assembly; Panel Assembly; Planet Pinion; Plate Assembly; Retainer Steel; Sleeve Assembly; Stiffner; Support Assembly; Valve Assembly, 6.1 The applicant also submitted the detailed Description of the item, usage, purpose in the functioning of the Tank, photograph, Material involved. They further stated that out of the said 17 items, 5 items ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embly; Oil Seal; Panel Assembly; Pipe Assembly; Planet Pinion; Plate Assembly; Plug Gauge; Retainer Steel; Rib Assembly; Shaft Assembly; Shim; Sleeve Assembly; Spacer; Spindle Steel; All types of spring; Stiffener; Stop Steel; Stopper Steel; Strap Assembly; Strip Assembly; Sub-Assemblies; Support Assembly; Thyristor; Torsion Bar; Tube Assembly; Turret; Twist Drill; Valve Assembly; Washer( Rubber made or Steel made) ; Wedge; Worm Wheel, Worm Gear, Worm Shaft; Yoke Assembly. 5. If the vendor is supplying parts under an HSN code other than 87100000, is it necessary that it has to be supplied under the same HSN code on what the vendor is charging? We take up the questions seriatim. The first three questions seek classification of the Tank and all Tank Parts, whether manufactured specifically by them or supplied by their vendor specifically manufactured for Tank Parts. HVF has stated that their main activity is manufacturing Tank and Tank Parts and according to them Tank and all parts is considered under the HSN code 87100000-Tank and other armoured fighting vehicles, motorized, whether or not fitted with weapons and parts of such vehicles . HVF has stated that the Parts of Tan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t apply to parts or accessories which are not suitable for use solely or principally with the articles of those Chapters. A part or accessory which answers to a description in two or more of the headings of those Chapters is to be classified under that heading which corresponds to the principal use of that part of accessory. Explanatory Notes of Harmonised Commodity Description and coding System is a guide to clarify the classification issues. Explanatory Notes to Section XVII on the Tarts and Accessories as per HSN is given below: (III) PARTS AND ACCESSORIES It should be noted that Chapter 89 makes no provision for parts (other than hulls) or accessories of ships, boats or floating structures. Such parts and accessories, even if identifiable as being for ships. etc., are therefore classified in other Chapters in their respective headings. The other Chapters of this Section each provide for the classification of parts and accessories of the vehicles, aircraft or equipment concerned. It should, however, be noted that these headings apply only to those parts or accessories which comply with all three of the following conditions : (a) They must not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifting, handling, loading or unloading machinery (e.g., hoists, jacks, derricks), moving, grading, levelling, scraping, excavating, tamping, compacting, extracting or boring machinery, for earth, minerals or ores ( heading 84.25, 84.26, 84.28, 8430 or 84.31 ) (i) Agricultural machinery- of heading 8432 or 84.33 (e.g., threshing, seed distributing, mowing, etc., attachments) constructed for mounting on vehicles. (k) Machinery of a kind described in heading 84.74 (I) Windscreen wiping mechanisms of heading 84.79. 6) Certain other goods of Chapter 84, e.g. : (a) Taps, cocks, valves and similar appliances (e.g., radiator drainage taps, inner-tube valves) ( heading 84.81 ). (b) Ball Or roller hearings ( heading 84.82 ). (c) internal parts of engines or motors (crank shafts, cam shafts. flywheels, etc.) falling in heading 84.83 7) Electrical machinery or equipment of Chapter 85, for example : (a) Electric motors, generators, transformers, etc., of heading 85.01 or 85.04, (b) Electro-magnets. electro-magnetic clutches, brakes, etc., of heading 85.05. (c) Electric accumulators ( heading 85.07 ). (d) Electrical igni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Accessories classifiable both in Section XVII and in another Section. Under Section Note 3, parts and accessories which are not suitable for use solely, or principally with the articles of Chapters 86 to 88 are excluded from those Chapters. The effect of Note 3 is therefore that when a part or accessory can fall in one or more other Sections as well as in Section XVII, its final classification is determined by its principal use . Thus the steering gear, braking systems, road wheels, mudguards, etc., used on many of the mobile machines falling in Chapter 84, are virtually identical with those used on the lorries of Chapter 87, and since their principal use is with lorries. such parts and accessories are classified in this Section. (2) Parts and accessories classifiable in two or more headings of the Section. Certain parts and accessories are suitable for use on more than one type of vehicle (motor cars, aircraft, motorcycles, etc.); examples of such goods include brakes, steering systems, wheels, axles, etc. Such parts and accessories are to be classified in the heading relating to the parts and accessories of the vehicles with which they are principal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrespective of the movement of the vehicle. They may also be equipped with anti-mining devices, such as a flail (a rotating drum which is carried on arms in front of the tank and to which are attached chains with ball ends) or a number of heavy milers attached to the front of the tanks. . PARTS The heading also covers parts of the above-mentioned vehicles provided the parts fulfil both the following conditions : (i) They must be identifiable as being suitable for use solely or principally with such vehicles: and (ii) They must not be excluded by the provisions of the Notes to Section XVII (see the corresponding General Explanatory Note). Parts of this heading include (1) Bodies of armoured vehicles and parts thereof (turrets, armoured doors and bonnets. etc ) (2) Tracks, specially constructed for use with tanks. (3) Special road-wheels for armoured cars. (4) Propulsion wheels for tank tracks. (5) Armour plates, worked to such an extent that they are identifiable as parts of the vehicles of this heading. (6) Clutch cables, brake cables, accelerator cables and similar cables, consisting of a flex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must not be excluded by the provisions of Notes to Section XVII. The identifiable parts under the said heading bodies of armoured vehicles and parts thereof cover special road wheels for armoured cars, propulsion wheels for tanks, tracts etc. As per this requirement, the goods should not only be identifiable to be armoured vehicles, but it should so not have been excluded by Notes to Section XVII. The Chapter note 2(f) excludes electrical machinery and equipment falling under Chapter 85. Explanatory Notes to HSN relating to the parts and accessories excluded by Note 2 specify items with reference to specific Chapter Heading as per (7) (a), (k) which excludes photographs and other current collectors for electric traction vehicles, fuses, switches and other electric apparatus of Heading No. 85.35 or 85.36. The items, therefore, manufactured by the appellants are identifiable or are in the nature of goods falling under Chapter Heading 85.36. Since these fall under the category of excluded goods under Chapter Notes, even though they are used specifically solely or principally with the armoured vehicles of Chapter Heading 8710, they are classifiable under Chapter Heading 8536.90 only a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly. It is made up of heat resistant proof fiber material have covered with sheeting screen, i.e. cloth wire net with square mesh. It is used in between engine and firing compartment. Para (A)(1) of Explanatory Notes to Note 2 of Section XVII on the Parts and Accessories specifies that gaskets of any material (classified according to their constituent materials or under 8484) are excluded froth classification as parts or accessories, whether or not they are identifiable as articles for Section XVII. Therefore, Gasket Assembly is not classifiable under CTH 87100000 as parts. 3. Retainer Steel: The applicant has stated that this component is precision machined. It is made of alloy steel and is used in Hull vision device cleaning system with function as holding/positioning purpose. This item is not excluded by the provisions of Note 2 to Section XVII nor is it more specifically included in elsewhere in the Nomenclature. It is identifiable as being suitable for use solely as principally with Tanks and as such is classifiable under CTH 87100000. 4. Stiffner : The applicant has stated that it is a steel strip used in various mountings. It is used as a stiffner i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Note 2 to Section XV includes articles of Chapter 7307, which are excluded from being classified as parts under CTH 87100000. Therefore, Clip Assembly are not classifiable under CTH 87100000 . 3. Connector Assembly: The assembly is used on Hull electrical system. It is made-up of five components, copper connectors and rivet, cloth and tape. It is used as connector in mounting of storage batteries equipments. This item is stated as a direct material used in the Tank. Connector assembly is essentially a conductor along with insulating material which is classifiable under 8544. Para (A)(7)(m) of Explanatory Notes to Note 2 of Section XVII on the Parts and Accessories excludes Other electrical fittings, such as insulated electric wire and cable (including wiring sets) and ..(Headings 85.44 to 85.48) from being classified as parts of articles of this Section XVII. Therefore, Connector Assembly is not classifiable under CTH 87100000 as parts. 4. Hydraulic items (All types): It is the assembly used as Hydraulic Shock absorber in tank. It is made up of five major Assemblies 86 19 components of different types. It is used in tank running gear assembly alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally included in elsewhere in the Nomenclature. It is identifiable as being suitable for use solely as principally with Tanks and as such is classifiable under CTH 87100000. 9. Planet Pinion: It is the precision machined components made of alloy steel. It is used in higher assembly 4th planetary gear of side gear box. This is stated as a direct item used in Tanks. Planet Pinion are in general classifiable under chapter 8483 as parts of gears. Para (A)(6)(c) of Explanatory Notes to Note 2 of Section XVII on the Parts and Accessories excludes Internal parts of engines or motors(crank shafts, cam shafts, flywheels etc.) of chapter 8483 from being classified as parts of articles of this Section XVII. Therefore, Planet Pinion excluded from classification under CTH 87100000 as parts. 10. Plate Assembly: It is also made up of special Alloy steel plates by welding and used in Holding/ Supplying the external fuel barrels in tank. It is fitted in Hull outer body. It is stated as a direct material used in Tank with specific drawings available. This item is not excluded by the provisions of Note 2 to Section XVII nor is it more specifically included in elsewhere in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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