2020 (7) TMI 107 - AAR - GST

Classification of Tank Parts under CTH 87100000: Supplier's Role Clarified

The ruling confirmed that tanks are classified under CTH 87100000, and parts manufactured specifically for tanks by the applicant are also classified ... Classification of goods - Tank and all Tank parts supplied by applicant - whether classified under the HSN code “87100000-Tank and other armoured fighting vehicles, motorized, whether or not fitted with weapons and parts of such vehicles”? - Whether parts manufactured specifically by applicant for TANK shall be considered under 87100000? - Whether parts and accessories supplied by their vendor specifically manufactured for Tank Parts and the same is not supplied to any other company will come under the HSN 87100000? - HELD THAT:- Tank is classified under CTH 8710 0000 while parts which satisfies the essential conditions i.e., they must be identifiable as being suitable for use solely or principally with Tanks and must not be excluded by the provisions of the Notes to Section XVII and must not be more specifically included in elsewhere in the Nomenclature are only to be classified as ‘Parts’ under CTH 8710 0000. Whether tank parts shall be considered under 87100000 or not? - HELD THAT:- Retainer Steel, Valve Assembly, Casing Assembly, 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. Issues Involved:1. Classification of Tank and Tank parts under HSN code 87100000.2. Classification of parts manufactured specifically by the applicant for TANK under 87100000.3. Classification of parts and accessories supplied by vendors specifically for tank parts under 87100000.4. Classification of specific tank parts listed by the applicant under 87100000.5. Necessity for vendors to supply parts under the same HSN code as charged by the applicant.Issue-wise Detailed Analysis:1. Classification of Tank and Tank parts under HSN code 87100000:The applicant, a Central Government Department engaged in manufacturing tanks and tank parts, sought clarification on whether tanks and all tank parts supplied by them fall under HSN code 87100000. The ruling confirmed that tanks are classified under CTH 87100000. Parts of tanks are also classified under CTH 87100000 provided they meet three conditions: they must not be excluded by Note 2 to Section XVII, they must be identifiable as suitable solely or principally for use with tanks, and they must not be more specifically included elsewhere in the Nomenclature.2. Classification of parts manufactured specifically by the applicant for TANK under 87100000:The ruling stated that parts manufactured specifically by the applicant for tanks are classified under CTH 87100000 if they satisfy the same three conditions mentioned above. This includes being identifiable as suitable solely or principally for use with tanks and not being excluded by Note 2 to Section XVII or more specifically included elsewhere in the Nomenclature.3. Classification of parts and accessories supplied by vendors specifically for tank parts under 87100000:Similarly, parts and accessories supplied by vendors specifically for tank parts are classified under CTH 87100000 if they meet the same conditions. The classification is based on the nature of the parts and their specific use with tanks, not on the supplier.4. Classification of specific tank parts listed by the applicant under 87100000:The applicant listed 84 specific tank parts for classification under HSN code 87100000. Upon review, the ruling classified the following parts under CTH 87100000:- Retainer Steel- Valve Assembly- Casing Assembly- Hydraulic items (all types)- Mandrel Assembly- Nozzle Assembly- Plate Assembly- Panel Assembly- Support Assembly- Sleeve AssemblyHowever, the following parts were not classified under CTH 87100000:- Dowel Pin (classified under Chapter 7318)- Gasket Assembly (excluded under Note 2 of Section XVII)- Stiffner (classified under Chapter 72)- Clip Assembly (classified under Chapter 7307)- Connector Assembly (classified under Chapter 8544)- Needle Bearing (classified under Chapter 8482)- Planet Pinion (classified under Chapter 8483)5. Necessity for vendors to supply parts under the same HSN code as charged by the applicant:The ruling clarified that classification is independent of the buyer or seller and depends solely on the nature of the goods. Therefore, it is not necessary for vendors to supply parts under the same HSN code as charged by the applicant. The applicant must correctly classify the goods when supplying or receiving them.Conclusion:The judgment provided a detailed classification of tanks and tank parts under HSN code 87100000, emphasizing that parts must meet specific conditions to be classified under this code. It also clarified that classification is independent of the supplier and must be based on the nature of the goods.