2020 (7) TMI 706 - AT - Customs

Child vehicle seat parts reclassified under CETH 9401 90 00, emphasizing integration with seats, overturning previous classification.

The Tribunal determined that the child parts imported should be classified under CETH 9401 90 00, as they are integral to vehicle seats. The previous ... Classification of imported goods - Parts of seats of motor vehicle (parts of part) - import of child parts from Japan which are then assembled to manufacture Round Recliner Assembly in India and then said Round Recliner Assembly is dispatched to factory at Haryana where the recliner welding assembly is completed and thereafter it is sent to Maruti factory where it is welded and fixed on the seat of motor vehicles - whether classifiable under heading 8708 of CTH as parts and accessories motor vehicle, or are parts of motor vehicle seats and classifiable under 9401 9000? HELD THAT:- It is seen that in CTH 8708 there is general entry of parts and accessories of motor vehicles but there is no specific entry for seat or its parts. Whereas in tariff item 9401, there is entry specifically for seat, wherein under tariff sub-heading 9401 20 00 entry describes “Seats of a kind used for motor vehicles” and in tariff item 9401 9000 is for Parts of various seats and the said seats includes ‘seats of kind used in motor vehicles’. Therefore, from the tariff entries it is clear that the seat for motor vehicles is specifically included under heading 9401 - Also, it is clear that vehicle seats is excluded by the provisions of notes (II) to Section XVII, therefore, clause (II) is not fulfilled. Consequently, the vehicle seats will not cover under heading 8708. In view of the unambiguous provisions for classification, there is no iota of doubt that vehicle seats will not fall under 8708 whereas, the same is correctly classifiable under 9401. Hence, part of seats which is undisputed in the present case is correctly classifiable under CETH 9401. It is undisputed that child parts used for making parts which are subsequently used in the complete assembly of vehicle seat and the vehicle seat has been classified under 9401, then how part of seat can be classified under 8708. If Revenue’s contention is accepted then the tariff entry i.e. seats of a kind used for motor vehicles under 9401 2000 will become redundant. The captioned goods i.e. Child Parts imported by the appellant is correctly classifiable under CETH 9401 90 00 of Customs Tariff Act - appeal allowed - decided in favor of appellant. Issues Involved:1. Classification of imported child parts.2. Applicability of relevant legal authorities and judgments.3. Interpretation of Customs Tariff headings and HSN explanatory notes.4. Admissibility of foreign rulings in Indian context.5. Compliance with Section XVII notes and General Rules for interpretation.Issue-wise Detailed Analysis:1. Classification of Imported Child Parts:The main issue revolves around the classification of child parts imported from Japan. The appellant claims these parts should be classified under heading 9401 9000 as parts of motor vehicle seats, while the department contends they fall under heading 8708 as parts and accessories of motor vehicles. The Adjudicating Authority had previously classified the parts under CTH 8708, referencing several judgments.2. Applicability of Relevant Legal Authorities and Judgments:The appellant argued that the explanatory notes of Section XVII exclude vehicle seats of heading 9401, and hence, parts of seats should fall under 9401 9000. They cited US Customs Ruling NY R04585 and several Indian judgments to support their claim. The Revenue, on the other hand, relied on judgments such as Pragati Silicons Pvt. Limited, GS Auto International Limited, and Cast Metal Industries Pvt. Limited to justify classification under 8708.3. Interpretation of Customs Tariff Headings and HSN Explanatory Notes:The Tribunal analyzed the competing tariff entries under 9401 and 8708. It noted that CTH 8708 has a general entry for parts and accessories of motor vehicles but lacks a specific entry for seats or their parts. Conversely, tariff item 9401 specifically includes seats used in motor vehicles and their parts. The Tribunal emphasized that vehicle seats are explicitly excluded from Section XVII and are more appropriately classified under 9401.4. Admissibility of Foreign Rulings in Indian Context:The Revenue argued that US rulings should not be considered as they are not binding in India and the sub-headings in the US tariff schedule differ from those in the Indian Customs Tariff. The Tribunal agreed, noting that foreign rulings are not applicable unless the goods and legal context are identical.5. Compliance with Section XVII Notes and General Rules for Interpretation:The Tribunal referred to the notes of Section XVII, which state that parts and accessories must not be more specifically included elsewhere in the nomenclature. Since vehicle seats are specifically covered under heading 9401, they are excluded from 8708. The Tribunal concluded that the child parts, being integral to the seats, should be classified under 9401 9000.Conclusion:The Tribunal found that the child parts imported by the appellant are correctly classifiable under CETH 9401 90 00. It set aside the impugned order and allowed the appeal, emphasizing that the classification under 9401 has not been disputed by the department and the parts are integral to the vehicle seats, not the motor vehicle itself.Pronouncement:The judgment was pronounced on 29.07.2020, with the Tribunal allowing the appeal and setting aside the previous order.