TMI Blog2024 (2) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... off-road. The type of equipment can range from large trucks used in mining to small agricultural machines, and everything in between. Thus from the plain reading of above CTH 8418 of the tariff and Sr. No. 448H of the said notification it is evident that there is neither any mention of On-highway or Off-highway goods nor there is any such distinction of turbochargers classified under CTH 8414 80 30 in aforesaid categories as per its use. Therefore, as per the tariff, it is evident that the turbochargers, whether for On-highway or Off-highway use, are classifiable under CTH 8414 80 30. It is difficult to distinguish the turbochargers based on its use in On-highway or Off-highway vehicles category and it is required to examine if the use of the turbocharger specifically falls in any of the motor vehicles with Headings 8702, 8704, 8703 and 8711 to deny or provide the benefit of the notification. The imported turbochargers cannot be linked to use in On-highway or Off-highway category of the vehicles to get the benefit of the Sr. No. 448H of Notification No. 50/2017, dated 30-6-2017, as amended. As per the said notification, the turbochargers will get benefit of the notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.3.1 The Applicants are engaged in the import and trading of Turbochargers which are suitable for use in (a) On-highway applications such as motor vehicles and (b) Off-Highway equipment(s) such as generators, power generation units, earth-moving equipment, and construction equipment etc. 2.3.2 All Turbochargers (whether for off-highway application or on-highway application) are classified under Tariff Item 8414 80 30 of the Customs Tariff upon import. 2.3.3 The present application for Advance Ruling is limited to Turbochargers which are suitable for use only in Off-highway equipment i.e., for generators, earth moving equipment etc. 2.3.4 List of various models of Turbochargers for which the Applicants are seeking an Advance Ruling are given in Table-1 in Para 2.2. Applicants submit that the abovementioned part numbers reflect on the turbocharger in the form of stickers having mention of the Part Number and also a bar code. The Applicants import and trade/supply the above Turbochargers to two (2) of their customers i.e., Caterpillar India Private Limited (CAT) and Perkins India Private Limited (Perkins. These customers are engaged in Off-highway equipment business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent, known as the beam, through the tube. In a high voltage power source, the X-Ray spectrum depends on the anode material and the accelerating voltage. 3.1.3 The Applicants examined the claim of DRI and accordingly, vide letter dated 25-5-2023 surrendered entire customs duty forgone along with interest, in respect of imports of (a) Actuators and (b) Turbochargers suitable for use for on-highway applications only viz. motor vehicles. 3.1.4 As a consequence of the above investigation, the Applicants did not claim exemption under of Sl. No. 448H of Notification No. 50/2017-Cus., dated 30-6-2017 on Turbochargers imported, even when they were suitable for use only with Off- highway equipment only. 3.2 Issuance of Show Cause Notice by Commissioner of Customs, Nhava Sheva-V 3.2.1 Pursuant to the DRI investigation, the Applicants were issued with Show Cause Notice ( SCN ) No. 1730/2022-23/Commr/NS-V/CAC/JNCH, dated 3-1-2023 (received on 17-1-2023). 3.2.2 The above SCN is restricted to demand of duty on imported Actuators and Turbochargers suitable for use with On-highway applications such as motor vehicles. It does not cover imports of Turbochargers that are suitable for u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in Diesel engines and high performance gasoline engines. They can also be found in some hybrid and electric vehicles. Turbochargers can be a great way to improve the performance of an engine and some of the benefits of using a turbocharger are increased power, unproved fuel economy and reduced emissions. It is widely used in automobile industry. Further they have informed that Turbochargers are specifically classified under CTH 8414 80 30 without specifying its use or application. It has been informed that the SCN has not disputed the Classification of Turbocharger and the dispute is in respect of wrong availment of notification benefit availed by them which were available for goods other than those suitable for use in motor vehicles covered under 8702, 8703, 8704 and 8711. 5. Details of Personal Hearing : 5.1 A personal hearing was held virtually on 24-8-2023 at 03:00 PM, Shri T. Vishwanathan, Advocate along with other officials of applicant appeared for the hearing. No one appeared on behalf of the jurisdictional Commissionerate. The applicant demonstrated a presentation wherein they reiterated the points submitted in the application and requested for the ruling. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as amended. Pursuant to the investigation SCN was issued and demand of duty was restricted only to those goods i.e. turbochargers and actuators, which were suitable for use with On-highway applications such as motor vehicles and no demand of duty was made for Off-highway equipment. 7.1 Before deciding on the issue, let me deliberate on the legal framework prescribed in Customs Tariff Act, 1975, Chapter/Section notes along with HSN explanatory notes. I find that there is no ambiguity in the classification of the Turbochargers since they are specifically classified under CTH 8414 80 30. 7.2 Relevant portion of CTH 8414 is reproduced below for ease of reference : 8414 AIR OR VACUUM PUMPS, AIR OR OTHER GAS COMPRESSORS AND FANS; VENTILATING OR RECYCLING HOODS INCORPORATING A FAN, WHETHER OR NOT FITTED WITH FILTERS; GAS-TIGHT BIOLOGICAL SAFETY CABINETS, WHETHER OR NOT FITTED WITH FILTERS 8414 80 - Other : --- Gas compressors : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bochargers, whether for On-highway or Off-highway use, are classifiable under CTH 8414 80 30. At the same time the Sr. No. 448H of the Notification No. 50/2017, dated 30-6-2017, as amended makes it clear that turbochargers are chargeable for 7.5% duty instead of 15% provided the same are not used in motor vehicles/cars/cycles falling under Headings 8702, 8704, 8703 and 8711. 8.2 Further, if we examine the said headings, especially 8702 and 8704, then these are for transport of more than 10 persons and transport of goods and thus can include big vehicles for Off-highway use. Infact, in respect of CTH 8704 10 it is specifically mentioned in the tariff as Dumpers designed for off-highway use . Similarly, as seen from the information available on internet, dirt bikes, quad bikes, dune buggies. All Terrain Vehicles, Electric vehicles of similar category etc. also fall under Off-highway use and which may be classified under Headings 8703 and 8711. Therefore, it is difficult to distinguish the turbochargers based on its use in On-highway or Off-highway vehicles category and it is required to examine if the use of the turbocharger specifically falls in any of the motor vehicles with He ..... X X X X Extracts X X X X X X X X Extracts X X X X
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