TMI Blog2021 (6) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... the floor of the car and it enables the forward and backward movement of the seat. The seat is manufactured and is complete before fixing it on the said assembly. The seat is fixed on this track assembly only to facilitate the movement of seat forward and backward. Thus it is clear that the seat and track assembly are two individual, independent products, manufactured separately and fixed together to make the seat movable for a comfortable position of the driver and the front co passenger - the track assembly which only improves the efficiency and convenience of the seat goes to prove that it is not in the nature of 'Parts' of Vehicle seats' and would not merit classification under CH9401. When seats are fixed on the TRACK ASSY it can slide back and forth with the operation of a lever for varying the positions of the seats, which is basically intended to improve the comfort and efficiency of the persons sitting thereon. This mechanism enables the passengers and drivers of the automobile to adjust seat positions for their comfort and convenience. Thus the Track assembly manufactured and supplied by the applicant is an adjunct to the car seat. Therefore, it is clear t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification no.1/2017-Central Tax (Rate) dt. 28.06.2017 as amended and SGST @14% as per entry sl. No. 170 of Schedule-IV of Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. 29.06.2017 as amended. - TN/17/ARA/2021 - - - Dated:- 7-5-2021 - THIRU SENTHILVELAVAN B., I.R.S, AND THIRU KURINJISELVAAN V.S., M.SC.(AGRI.), M.B.A MEMBER Note: Any appeal against the Advance Ruling order shall be filed before Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under section (1) 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 Service Tax Act are the same except for certain provisions, Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. DAEBU AUTOMOTIVE SEAT INDIA LIMITED, 492, Mannur Village, Vallarpuram Post, Sriperumbudur Taluk, Kancheepuram-602105 (hereinafter c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28%. They have submitted that they are mainly supplying to M/s Hyundai Transys Lear Automotive Limited, Sriperumbudur, who in turn manufactures automotive car seats and supply to M/s Hyundai Motors India P Ltd., Irunkkattukottai. Their other customers are Harita Seating System Ltd., Hosur, M/s Adient India P Ltd., Singaperumalkoil, M/s Daechang India Seat Company P Ltd., Sriperumbudur etc. The applicant has also stated that they have been paying GST regularly and has been a regular filer of statutory returns etc. The goods manufactured by them are classified by them under HSN: 8708 99 00 and they are paying GST @28%. 2.2 On interpretation of law, the applicant has stated that divergent practices are being adopted among the manufacturers of similar goods and the automobile/automobile seat manufacturers many times, insist on classifying the goods under HSN 9401 99 00, which attracts lower rate of GST. Since HSN cannot be changed according to the needs of the customer and as they follow, HSN 8708 99 00, they are unable to cater to the demands of such customers and lose business on this account. They have submitted that the reasons for classifying the products manufactured by them u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Disc Brake Pad for Automobiles has been discussed and the same is applicable to the products manufactured by them also. Further, the applicant has submitted that Customs DGFT Departments have also classified the products manufactured by the applicant under HSN 8708 as parts and accessories of motor vehicles and not under HSN 9401 as Parts of Seats . 2.4 In view of the aforesaid facts, they have sought the authority to issue necessary ruling as to whether the products manufactured by them falls under HSN 8708 99 00 as parts and accessories of motor vehicles or under HSN 9401 99 00 as Parts of Seats and the applicable rate of tax under GST. 3.1 Due to the prevailing PANDEMIC situation and in order not to delay the proceedings, the applicant was addressed through the Email Address mentioned in the application to seek their willingness to participate in a virtual Personal Hearing in Digital media. The applicant consented and the hearing was held on 09.04.2021. The authorised representative appeared for the hearing. They stated that they are supplying as sub-assembly and fully assembled. They were asked to furnish the copy purchase orders and write up on the products re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant has stated that there are no proceedings pending in respect of the question raised by the applicant and further offered the following comments: Tariff heading 9401 covers Seats including seats of a kind used for motor vehicles . 94019900 covers Parts of such seats. 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. Contrarily they do not cover those items which are basically fitted under a seat on the floor of the motor vehicle. Hence, seat assembly mechanisms cannot be called as parts of seats falling under HSN 9401 9900 Alternatively they can be termed as accessories of motor vehicle and classifiable under HSN 8708 99 00 and not under HSN 9401 99 00. 5. The State jurisdictional authority has not furnished any comments and it is construed that there are no proceedings pending on the issue raised by the applicant. 6. We have carefully examined the statement of facts, supporting documents filed by the Applicant along with application, oral submissions made at the time of Virtual hearing, submissions made after hearing and the comments of the Jurisdictional Authority. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sitting thereon. This mechanism enables the passengers and drivers of the automobile to adjust seat positions for their comfort and convenience. Thus they claim that the Track assembly manufactured and supplied by them is an adjunct to the car seat. The write up on the products manufactured by them submitted by the applicant is extracted below: and the product description as furnished by the applicant is as under: PRODUCT DESCRIPTION :- Track Assembly for front left or front right seat 7.3 Further, from the Purchase Orders and Invoice Copies furnished, the following are observed: i) The applicant has supplied Track assembly front seat LH BA and RH BA, Track assembly Frt seat RH and LH Height BA, PNL assembly FRT CUSH LH STD HCI, RH STD HCI, Track assembly FRT CUSH LH STD HCI, RH STD HCI, Track assembly LH RH OPT HCI, FRT CUSH LH RH OPT H/ADJ, FRT SEAT OTR INR LH RH IB, FRT RH HEIGHT SMALL BRKT IB, FRT SEAT RH LH HEIGHT IB, PNL ASSY FRT CUSH LH SBR HCKI, FRM ASSY FRT CUSH LH OPT (1-PT BRKT)HCI, TRACK ASSY SEAT CUSH etc classifying them under 8708.99.00 to M/s.Hyudai Transys Lear Automotive India Private Limited against Purchase order No.4200000917 dt. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions 'parts and parts and accessories do not apply to the following articles, whether or not they are identifiable as for the goods of this Section: (a) joints, washers or the like of any material (classified according to their constituent material or in heading 8484) or other articles of vulcanised rubber other than hard rubber (heading 4016); (b) parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39); (c) articles of Chapter 82 (tools); (d) articles of heading 8306; (e) machines and apparatus of headings 8401 to 8479, or parts thereof, other than the radiators for the articles of this Section, articles of heading 8481 or 8482 or, provided they constitute integral parts of engines and motors, articles of heading 8483; (f) electrical machinery or equipment (Chapter 85); (g) articles of Chapter 90; (h) articles of Chapter 91; (Y) arms (Chapter 93); (k) lamps or lighting fittings of heading 9405; or (l) brushes of a kind used as parts of vehicles (heading 9603). 3. References in Chapters 86 to 88 to parts or accessories do not apply to parts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries' falling under Section XVII and in specific under CTH 8708 are as under: General Notes to Section XVII: (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 excluded by the terms of Note 2 to this Section (see paragraph (A) below). and (b) They must be suitable for use solely or principally with the articles of Chapters 86 to 88 (see paragraph (B) below). And (c) They must not be more specifically included elsewhere in the Nomenclature (see paragraph (C) below). (B) Criterion of sole or principal use. (1) Parts and accessories classifiable both in Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand is as follows: 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. Separately presented cushions and mattresses, sprung, stuffed or internally fitted with any material or of cellular rubber or plastics whether or not covered, are excluded (heading 94.04) even it they are clearly specialised as parts of upholstered seats (e.g., settees, couches sofas). When these articles are combined with other parts of seats, however, they remain classified in this heading. They also remain in this heading when presented with the seats of which they form part. From the above entries, it is seen that the chapter heading 9401 covers only seats and parts thereof. So only such items, which constitute as specific parts of a seat such as backs, bottoms, armrests etc can be termed as parts of seats. 8.6 CTH 8708 covers 'Parts and accessories of Motor Vehicles' and CTH 9401 covers 'Parts of seats of Motor vehicles'. Now it is essential to find out the definitions of 'parts' a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ack assembly' is an accessory to the Motor vehicle and is covered under CTH 8708-'Parts and accessories of Motor vehicles' provided the three conditions listed therein in the HSN are satisfied, viz., (i) They must be identifiable as being suitable for use solely or principally with the above mentioned vehicles; - (ii) They must not be excluded by the provisions of the Notes to Section XVII; and (iii) They must not be specifically mentioned elsewhere in the nomenclature It is stated that the track assembly are manufactured and supplied to seat manufacturers for further supply to the Motor Vehicle Manufacturers, the fact of which stands verified from the Purchase Orders/Invoices furnished before us and mentioned above. Thus the 'Track assemblies' are identified as being suitable for use solely or principally with the Motor Vehicles and the first condition is satisfied. The said goods are not excluded under Section Note 2 to Section XVII, which is the second condition. Track assembly being an accessory which provides add-on-value, in terms of comfort for the driver/front passenger in terms of leg room, seating position, etc is not a 'Part o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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