TMI Blog2019 (7) TMI 1734X X X X Extracts X X X X X X X X Extracts X X X X ..... ile driving. It helps in adjusting the position of the seat. Additionally, seat adjuster contains necessary safety features to protect the occupants in case of a collusion/accident. These are the features of the product Seat adjuster and it does not seem to be a part of a seat - The Applicant themselves changed the classification of seat adjuster from HSN 9401 to HSN 8708 with effect from April 1, 2019 and paid the applicable GST from November 2017. It seems that the applicant took a right step as a measure of caution and to avoid interest liability. The seat adjuster would be accessories to the motor vehicle and would merit classification under chapter heading 8708, because they are fitted in the motor car for adjustment of the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e performed by seat adjuster are as under: Seat adjuster helps the driver and co-passenger to get into the most comfortable leg position inside the car by using it to move the seat forwards and backwards as per their convenience to maintain safe posture and position while driving. It helps in adjusting the position of the seat. Additionally, seat adjuster contains necessary safety features to protect the occupants in case of a collusion/accident. The major impact load in a collision is transferred through the seat adjuster , so it must be ensured that the mechanism has adequate strength to withstand the load because it plays an important role in protecting the car driver and co-passenger in the event of a crash. The seat adjust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the recommendations of Goods and Services Tax Council ( GST Council ). The rate of seat adjuster was reduced from 14% to 9%. A new entry at Serial No. 435A was inserted in Notification No.1 to give effect to the reduced rate of tax. 3.6 Similar notifications were also issued under HGST and the effective rate of tax for seat adjuster under HSN 9401 with effect from 14.11.2017 came to be 18%. Since the Applicant was paying the tax under HSN 9401, the benefit of reduction in rate of CGST/SGCT was applicable to the Applicant. However, during an internal check of the processes adopted by the Applicant by a third party being carried out as a routine exercise, it was pointed out that there may be a competing entry at Serial No. 170 of Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It helps in adjusting the position of the seat. Additionally, seat adjuster contains necessary safety features to protect the occupants in case of a collusion/accident. These are the features of the product Seat adjuster and it does not seem to be a part of a seat. 4.3 The Applicant themselves changed the classification of seat adjuster from HSN 9401 to HSN 8708 with effect from April 1, 2019 and paid the applicable GST from November 2017. It seems that the applicant took a right step as a measure of caution and to avoid interest liability. 4.4 This issue was decided by the Hon ble Supreme Court in the case of Commissioner Of Central Excise, Delhi vs Insulation Electrical (P) Ltd on 27 March, 2008 = 2008 (3) TMI 22 - SUPREM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chapter heading 9401 covers Seats (other than those of heading 9402), whether or not convertible into beds, and parts thereof. But the item Seat adjuster is not an essential component or part of a seat, hence do not merit classification under HSN 9401. 4.5 It was also found that Hon ble Supreme Court of India vetted on the contentions of the counsel of the assessee tendered in the Tribunal as stated in para 5 at page 2 as under: counsel appearing for the assessee contends that the products manufactured by the assessee are not seats or parts of the seats as contemplated under chapter heading 9401.00. The seat is complete without the said products as rightly concluded by the Tribunal. With regard to rail assembly front seat adjus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are to be affixed on the floor of motor vehicles. When seats are affixed on these rails, seats can slide back and forth with the operation of a lever forming part of other rail assembly front seat adjuster. This enables the driver or the passenger, to adjust the position of the seat to suit his comfort and convenience. These are merely to improve the efficiency and convenience of the seat and does not form part of the seat. The sears are complete in themselves without these mechanisms and therefore it cannot be held that the parts manufactured by the assessee merit classification under chapter 9401. Rather the same would be accessories to the motor vehicle as claimed by the assessee and would merit classification under chapter heading 8708 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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