2024 (11) TMI 1516 - AAR - Customs

Imported aluminium sunroof guide rail classifiable as motor vehicle parts under Section XVII, Chapter 87, CTH 8708 (CTI 87082900)

M/s. Inalfa Gabriel Sunroof Systems Private Limited Versus Office of the Commissioner of Customs, Chennai 41 (Import)

The AAR held that the imported Assy Guide Rail, an aluminium component used solely or principally in a vehicle sunroof assembly, satisfies Section XVII ... Classification of imported Assy Guide Rails - to be classified under CTI 87089900 as parts of motor vehicles or otherwise? - HELD THAT:- The applicant has stated that the Assy Guide Rail is used in a sunroof assembly of a motor vehicle that provide support and guidance for the sunroof panel as it slides open and closed. Thus', it remains to be seen here whether Assy Guide Rail may be classified as 'Parts and accessories' of the motor vehicles of headings 8701 to 8705. Chapter 87 is covered under Section XVII (vehicles, aircraft, vessels and associated transport equipment). The list of 'parts and accessories' excluded as per the provisions of the Explanatory Notes 2 to Section XVII is perused and it is found that 'Assy Guide Rail' does not find mention in the same. Therefore, the first condition is satisfied. Further, on the basis of the submission given by the applicant it is further seen that 'Assy Guide Rail' as per its configuration, specific functions and uses, is a part, which can be used solely or principally in the sunroof assembly of the motor vehicle. The presence of the model number and part number on the subject goods i.e. Assy Guide Rail to a sunroof assembly confirms that this part is specifically designed to perform a function within that subsystem of the car's body. Motor vehicles are covered under headings 87.01 to 87.05 of Chapter 87 of the First Schedule to the Customs Tariff Act, 1975. Thus the second condition is satisfied. Further, the product is not specified particularly anywhere else in the Tariff, therefore, the third condition, i.e., they must not he specifically included elsewhere in the Nomenclature is also satisfied. Since all the three conditions have been satisfied, it can be concluded that the 'Assy Guide Rail' is covered under the heading 8708 only and is in accordance with classification in terms of Rule 1 of GIR, Section XVII and Chapter Notes of Customs Tariff Act, 1975. It is pertinent to mentioned that CTH 8708 includes parts and accessories that form part of the vehicle's body structure. This is significant because parts that are directly related to the construction or functionality of the vehicle's bodywork (such as the framework; panels, roof, doors, and related components) are classified under this heading. It is found that CTI 87082900 under heading 8708 is used for other parts and accessories that are components of the vehicle's body but are not specifically categorized elsewhere in the heading. Hon'ble Supreme Court in the case of Commissioner of Central Excise Vs. Wockhardt Life Sciences Ltd [2012 (3) TMI 40 - SUPREME COURT] had held that the functional utility and predominant usage of the commodity must be taken into account apart from the understanding in common parlance to determine the ' correct classification of the product. The Hon'ble Supreme Court in the case of Collector of Customs Vs. Kumudam Publications [1995 (12) TMI 82 - SUPREME COURT] has held that 'it is not entirely correct to say that the end use or function of the goods is irrelevant to decide the question of classification'. Considering the ratio of the above judgements and function of the product, provisions of Note 2 and Note 3 of Section XVII of Customs Tariff, General HSN Note to Section XVII, the Assy Guide Rail as a part of the automobile's sunroof mechanism is rightly classifiable under CTI 87082900 (Other Parts and accessories of bodies of motor vehicles of headings 8701 to 8705) - the Assy Guide Rail cannot be classified under CTH 8302 as it is clearly an integral part of the sunroof system of the vehicle, which is part of the vehicle's structure and falls under the relevant sections for vehicle parts and accessories. The product i.e. Assy Guide Rail described as Aluminium Guide Rail merit classification under CTH 8708 (Parts and accessories of motor vehicles of headings 8701 to 8705), more specifically under CTI 87082900 (Other parts and accessories of bodies) of the First Schedule of Customs Tariff Act, 1975. ISSUES PRESENTED AND CONSIDERED 1. Whether the imported 'Assy Guide Rail' (aluminium guide rail for a sunroof assembly) is classifiable as a 'part and accessory' of motor vehicles under Chapter/heading 87, specifically under tariff item 8708 (and more particularly 8708 29 00 / 8708 29 00 as other parts of bodies of motor vehicles) or otherwise? 2. If not classifiable under Chapter 87, whether the Assy Guide Rail alternatively merits classification under Chapter 76 (heading 7610: aluminium structures and parts thereof) or under heading 8302 (base metal mountings, fittings and similar articles)? ISSUE-WISE DETAILED ANALYSIS Issue 1 - Classification as part/accessory of motor vehicles (Chapter 87; CTH 8708) Legal framework: Classification governed by Rule 1 of the General Rules for Interpretation (GIR) and by Section/Chapter Notes (Section XVII and Chapter 87). Section XVII Notes 2 and 3 and the General HSN Explanatory Notes to Section XVII set cumulative conditions for parts/accessories of Chapters 86-88: (a) not excluded by Note 2; (b) suitable for use solely or principally with articles of Chapters 86-88; and (c) not more specifically included elsewhere in the Nomenclature. Precedent treatment: The Court treated higher-court jurisprudence establishing that functional utility and predominant use/end-use are relevant to classification as authoritative and applied that ratio when assessing the parts' character and principal use. (Precedents relied on were applied for the proposition that function and predominant use inform classification.) Interpretation and reasoning: The Tribunal examined the product description, technical specifications and the nature of use - a long aluminium track fixed along the sunroof opening to support and guide the sliding glass panel and identified by a part/model number for the sunroof subsystem. It found (i) Assy Guide Rail is not within exclusions of Note 2 (not a part of general use, not covered by other excluded chapters); (ii) it is specifically designed and suitable solely/principally for use in sunroof assemblies of motor vehicles (headings 8701-8705); and (iii) it is not more specifically provided for elsewhere in the Tariff. The explanatory notes to Chapter 87 and heading 8708 are wide and illustrative rather than exhaustive; parts essential to the vehicle body are captured within heading 8708 (including parts forming the body/roof subsystem). Ratio vs. Obiter: Ratio - the Assy Guide Rail satisfies all three cumulative conditions in Section XVII and thus is properly classified as a part/accessory of motor vehicles under heading 8708. Obiter - general observations on the non-exhaustive nature of the illustrative list in heading 8708 and on the breadth of 'parts and accessories' language. Conclusion: The Assy Guide Rail is classifiable under Chapter 87 as a part/accessory of motor vehicles and, more specifically, under the subheading covering 'other parts and accessories of bodies of motor vehicles' (CTH 8708, residuary 'other' entry for parts of bodies), i.e., tariff item 8708 29 00 (other parts and accessories of bodies). Issue 2 - Alternative classification under Chapter 76 (heading 7610: aluminium structures) and heading 8302 (base metal fittings) Legal framework: Chapter 76 covers aluminium structures and parts of structures (including doors, windows and their frames). Section XV Note 1(g) excludes from Section XV (base metals) any articles classifiable under Section XVII (vehicles etc.). Heading 8302 covers general-purpose base-metal mountings/fittings for doors, windows, furniture, etc., but excludes goods forming an essential part of the structure (e.g., window frames) and excludes parts that are parts/accessories of Section XVII. Precedent treatment: The applicant relied on tribunal decisions that treated aluminium sections used as door/window frames as classifiable under aluminium chapters rather than as mountings; the Court accepted the principle that where an item is an essential structural frame it may fall under the aluminium-structures chapter. However, the present facts were distinguished. Interpretation and reasoning: The Tribunal distinguished the Assy Guide Rail from conventional window/door frames or general aluminium structural profiles. Although made of aluminium, the guide rail's function is as a specialized mechanical component of a vehicle sunroof (guiding and securing the sliding panel) rather than as a structural frame for enclosing/opening a building window/door. Section XV Note 1(g) operates to exclude goods specifically classifiable under Section XVII from classification under Section XV headings (including Chapter 76). The Explanatory Notes to heading 8302 show that the heading covers general-purpose fittings and mountings and expressly excludes goods forming an essential part of a structure (and excludes parts/accessories of Section XVII). The Guide Rail is an integral, essential element of a vehicle subsystem and therefore falls within Section XVII rather than Section XV or heading 8302. Ratio vs. Obiter: Ratio - Assy Guide Rail is excluded from classification under heading 7610 and heading 8302 because it is a motor-vehicle part captured by Section XVII; alternative classification under Chapter 76 or heading 8302 is therefore inappropriate. Obiter - discussion of how heading 7610 and 8302 operate and the application of Section XV/Section XVII interaction in general. Conclusion: Alternative classification under heading 7610 (aluminium structures/parts) or heading 8302 (base metal fittings) is rejected. By virtue of its design, predominant use and Section Note exclusions, the Assy Guide Rail is not classifiable under those headings but falls within Section XVII/Chapter 87. Cross-references and final determination All analyses interrelate: the determination under Issue 1 (satisfaction of Section XVII cumulative tests) is dispositive and forecloses classification under Chapters 76/83 by operation of Section XV/Section XVII notes and the Explanatory Notes to headings 7610 and 8302. Functional utility, specific design, part numbering and the essential role in the vehicle roof/sunroof subsystem were controlling factual elements supporting classification under heading 8708 rather than alternative headings. Final conclusion: The Assy Guide Rail is classifiable as a part/accessory of motor vehicles under Chapter 87, specifically as 'other parts and accessories of bodies of motor vehicles' (tariff item within heading 8708 - residuary 'other' entry for parts of bodies).