9911796707
TMI Blog2025 (2) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... llant imported various components from Thailand and classified the same under Customs Tariff Heading 8708 99 00 under the category 'others'. The product whose classification has been called in question is "Cap-Sub-Assy Fr Door Outside Handle". While clearing the goods, the appellant availed the benefit of the concessional rate of 5% basic Customs duty, as per under Notification No. 46/2011 Customs dated 1 June 2011 [as amended by Notification No. 82/2018 Customs dated 31 December 2018] for specified products from Thailand. Notification No. 46/2011 covered products falling under Customs Tariff Heading 8708 99 00. On scrutiny of imports made by the appellant, the Department noticed that they were importing parts and accessories of bodies of automotive vehicles like Cap Sub-Assy Fr Door Outside Handle 423205-11480-Coh (Parts for Automobile) by classifying the same under CTH 87089900. On completion of investigation, show cause notice dated 12.03.2021 was issued to the appellant. Vide the impugned order, the Commissioner confirmed the differential duty of Rs. 1,33,82,357/- along with interest under Section 28AA of the Customs Act, 1962. Aggrieved by the said order, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General Rules of Interpretation to observe that an unfinished or incomplete article are to be classified as finished goods, if it has incomplete or unfinished article has the characteristics of the finished goods. He further submitted that Rule 2(a) relates only when the incomplete or unfinished article possesses the characteristics of the finished goods. However, he submitted that the product did not have any characteristic of a door handle. Post its importation, a plastic base material is inserted through its circumference and subsequently, a door handle cames into existence. It is not the case that the said product could perform the function of the door handle on a standalone basis. It is only when the product is moulded in a specific manner and under controlled circumstances, does a door handle come into existence. In support of his submissions, ld. Counsel relied upon the following decisions:- * Sony India Ltd. v Commissioner of Customs, New Delhi [2002 (143) ELT 411 (Tri-LB)] * Commissioner of Customs, New Delhi vs. Sony India Limited [2008 (321) ELT 385 (SC)] * LG Electronics India Private Limited vs. Commissioner of Customs, Mumbai [2006 (204) ELT 450 (Tri.-Mum)] He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Central Excise, Delhi-III vs. Uni Products India Ltd. [2020 (372) ELT 465 (SC)] In view of above submission, the ld. Counsel submitted that principal usage of the product is qua the door handle and since there is no specific entry for door handle, the same merits classification under Customs Tariff Heading 8708 99 00. Therefore, going by the rationale of the impugned order itself, the product ought to have been classified under Customs Tariff Heading 8708 99 00 by virtue of Section Note 3 and Note B to HSN Explanatory Notes. 3.5 The ld. Counsel also submitted that Customs Tariff Heading 8708 covers 'Parts and Accessories of the Motor Vehicles of Headings 8701 to 8705'. The sub-classifications envisaged thereunder has to be interpreted keeping in mind the Customs Tariff Heading, i.e., 8708 even in terms of Note 1 of General Explanatory Notes, the entries carrying single dash are to be treated equally and same refers to a sub-set of the heading, which in the present case is heading 8708 "Parts and Accessories of the Motor Vehicles of Headings 8701 to 8705." All parts are to be given equal treatment and one heading cannot exclude the other, other than the exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Cap FR door outside handle, Cap RR door outside handle or handle door outside were designed for specific purpose and the same has been admitted by the importer as well. Therefore, Section Note 3 of Section XVII applies here which states that:-Reference in Chapters 86 to 88 to 'parts' or 'accessories' do not apply to parts of 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 or accessory. Therefore, the correct CTH will remain as 8708 which is supported by HSN Explanatory Note B of section XVII. 4.1 Learned AR submitted that as per Rule 2(a) of General Rules of Interpretation that any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lassified under CTH 87082900. Since, the imported goods are for specific use, therefore, considering Rule 3(a) of the GIR, the goods are classifiable under СТН 87082900. Further, CTH 870899 as others cover those parts which are (a) not parts of bumpers (CTH 8708.10), (b) not parts of bodies (CTH 8708.20), not parts of brakes (CTH 8708.30)........not parts of radiators, silencers, clutches, steering wheels, safety air bags (CTH 8708.91 to 8708.95). As the imported goods are specifically covered under CTH 8708.20 as parts of bodies, these are not to be covered under CTH 8708.99. The entry 8708.99 is a residual entry and covers goods not covered in previous entries of CTH 8708. It is very clear that that the imported item is a special purpose item and it cannot be treated as parts of general use and accordingly its classification should be decided. In the light of above submissions, ld. AR prayed that the present appeal may be dismissed and the impugned order may please be upheld. 5. We have heard the Ld Counsel for the appellant and the Ld Authorised Representative for the Department. We have also perused the case records. The issue before us is the classification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision would apply in the facts of the case. Hence we are unable to appreciate the learned counsel's submissions. It has also been submitted before us that the imported product does not have the characteristics of a door handle. Post importation, plastic material is inserted through its circumference and subsequently the door handle comes into existence. Ld. Counsel also has submitted that the product has to be moulded in a specific manner and under controlled circumstances for it to emerge as a door handle. In this context we note that the product imported by the appellant are door handles that are to be attached to the motor car door. The said door handles are attached using a plastic piece around its circumference. Rule 2(a) of the General Rules for Interpretation states that any reference in a subheading to an article shall be taken to include a reference that article as presented in incomplete or unfinished form has the essential character of the complete or finished article. The relevant rules are reproduced below:- RULE 2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n its judgment in M/s Thermax Ltd Vs Commissioner of Central Excise, Pune [2022 (382) E.L.T. 442 (S.C.)] has highlighted the persuasive value of the HSN and held as follows:- "6. The definition of a product given in the HSN should be given due weightage in the classification of a product for the purpose of levying excise duty. This is because in the Statement of Objects and Reasons of the Bill leading to enactment of Central Excise Tariff Act, 1985, it was clearly stated that the pattern of tariff classification is broadly based on the system of classification derived from the International Convention on the Harmonised Commodity Description and Coding System (Harmonised System) with such contraction or modification thereto as are necessary, to fall within the scope of the levy of Central Excise duty. The tariff so suggested for the levy under the Indian Tariff Act is based on an internationally accepted nomenclature, in the formulation of which, all considerations, technical and legal, have been taken into account. This was done to reduce avoidable disputes on tariff classification. Besides, the tariff would be on the lines of the harmonized system. It was also borne in mind that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same context in the HSN. In the HSN, block board is included within the meaning of the expression "similar laminated wood" in the same context of classification of block board. Since the Central Excise Tariff Act, 1985 is enacted on the basis and pattern of the HSN, the same expression used in the Act must, as far as practicable, be construed to have the meaning which is expressly given to it in the HSN when there is no indication in the Indian tariff of a different intention." 7. Commenting on the importance of taking guidance from HSN Classification and how a taxing statute should be construed in consonance with their commonly accepted meanings in the trade and popular sense, Justice Sanjiv Khanna in D.L. Steels (supra) also so correctly observed as follows :- "9. The Harmonised System of Nomenclature, developed by the World Customs Organisation, has been adopted in India by way of the Customs Tariff Act, 1975, though there are certain entries in the Schedules to this Act which have not been assigned HSN codes. The Harmonised System is governed by the International Convention on Harmonised Commodity Description and Coding System, which was adopted in 1983, and enforced in J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retation of statutes for deciphering the mind of the law-maker. However, the above rule is subject to certain exceptions, for example, when there is an artificial definition or special meaning attached to the word in a statute, then the ordinary sense approach would not be applicable." 10. It is important to note here that in the aforesaid judgment, the Supreme Court has reiterated the view that the HSN code is the bedrock of custom controls and procedures. It has also been held that as per the HSN, classification is done by placing the goods under the most apt and fitting sub-heading. In this context, we also note that the Supreme Court in the judgement in Commissioner of Central Excise, Delhi vs. Uni Products Limited [2020-TIOL-91-SC-CX] had laid some guidelines for classification. 1) Section notes, Chapter notes are of utmost importance to determine classification. ACC to HSN Explanatory notes to Section XVII, all the 3 conditions must be fulfilled to classify product as par or accessory. In addition, the Hon'ble Court highlighted the persuasive value of the HSN Explanatory notes, specific headings should be preferred to general headings. 11. We now examine whether the said p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of bodies (CTH 8708.20), not parts of brakes (CTH 8708.30).....not parts of radiators, silencers, clutches, steering wheels, safety air bags (CTH 8708.91 to 8708.95). As the imported goods are specifically covered under CTH 8708.20 as parts of bodies, these are not to be covered under CTH 8708.99. We are in agreement CTH 87089900 refers to "other parts and accessories of motor vehicles" which includes any miscellaneous parts or accessories for vehicles that are not specifically classified under other headings within Chapter 87, like small hardware components, non-standard vehicle parts, or specialized accessories not commonly listed elsewhere; essentially, any vehicle part not falling under the other 8701 to 8705 categories that are considered "parts and accessories of motor vehicles.". Door handles are to be classified under the Customs Tariff Heading 87082900 if they are parts or accessories of motor vehicles for the following reasons:- * The HSN code 87082900 is for parts and accessories of motor vehicles, including cabs. * The classification of door handles depends on whether they are designed for use primarily with motor vehicles. * If the door handles are designed for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome other basis may have to be applied. It is indeed not possible, nor desirable, to lay down any hard and fast rules of universal application." Therefore, the respondents ought not to have overlooked the 'predominant use' or 'sole/principal use test acknowledged by the General Rules for the Interpretation of the Schedule." 15. Similarly, in the case of Cast Metal Industries (P) Ltd. vs. Commissioner of Central Excise-IV, Kolkata [2015 (325) E.L.T. 471(S.C.)], the Apex Court held as follows:- "5. On the face of it, this note would not be applicable as it is HSN Note which has diversion with the relevant entry and as the very first line thereof mentions that it covers those goods which are meant for "general purpose". In the instant case, as already pointed out above, the goods in question are meant for specific purpose viz. in the motor vehicles that too for specific model of the motor vehicles as its parts. 6. We also find that the issue is squarely covered by the judgment of this Court in the case of G.S. Auto International Limited v. CC Excise, Chandigarh [2003 (2) SCC 371 = 2003 (152) E.L.T. 3 (S.C.)]. In the said judgment, following the earlier decisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
