2025 (2) TMI 218 - AT - Customs

Imported parts of Self-Loading Concrete Mixtures classified under CTH 8474 not CTH 8708 as customs proposed

CESTAT Chennai held that imported parts of Self-Loading Concrete Mixtures (SLCM) should be classified under CTH 8474 rather than CTH 8708 as proposed by ... Classification of imported goods - Self-Loading Concrete Mixtures (SLCM) - classifiable CTH 8474 3110 or under CTH 8708? - HELD THAT:- In the present case the importer is also the manufacturer of SLCM for which the imports of parts have been made. They possess a Central Excise Registration Certificate for ‘Self Loading Concrete Mixers’ falling under Tariff Heading 8474. Once the decision on the main machine has been taken by the Proper Officer in charge of the factory it is not deemed proper to sit in judgment over the said classification when that matter is not here. The Telangana VAT Appellate Tribunal in Appellant’s own case T.A. No. 137/2016 dated 09.09.2016 has classified SLCM under CETH 8474. Even under the GST regime, the appellant has stated that the SLCM’s manufactured by them are sold and cleared under Heading 8474. Since the classification of the parts of the SLCM is dependent on the classification of the SLCM which falls under CETH 8474, as decided by the Central Excise Authorities and not under 8708 as stated by the customs department, the classification of the parts of the SLCM proposed by revenue in the present appeals / cross objections, fails. A Coordinate Bench of this Tribunal in Sun Rise Traders v. Commissioner of Customs, Mundra [2022 (1) TMI 468 - CESTAT AHMEDABAD], held that it is a settled legal position that if the goods are not classifiable under the chapter heading proposed by the revenue thereafter even if the goods is classified under the chapter heading claimed by the assessee are correct or not, the case of the department will fail. Conclusion - Classification of the parts of the SLCM is dependent on the classification of the SLCM which falls under CETH 8474, as decided by the Central Excise Authorities and not under 8708 as stated by the customs department. The classification of the goods as declared in the BoE’s does not merit a change. Appeal disposed off. ISSUES PRESENTED and CONSIDEREDThe core legal issue in this case is the classification of parts for Self-Loading Concrete Mixers (SLCM) under the Customs Tariff. The importer contends that these parts should be classified under Customs Tariff Heading (CTH) 8474, while the Department argues for classification under CTH 8708. This classification dispute affects the applicable Basic Customs Duty (BCD) rate. The appeals also consider whether the classification of the parts is interlinked with the classification of the SLCM itself.ISSUE-WISE DETAILED ANALYSISClassification of SLCM and Its Parts:Relevant legal framework and precedents: The classification dispute hinges on the interpretation of the Harmonized System of Nomenclature (HSN) Explanatory Notes for Chapter 84 and Chapter 87. The importer argues that SLCMs are classifiable under CTH 8474, which covers machinery for sorting, screening, separating, washing, crushing, grinding, mixing, or kneading earth, stone, ores, or other mineral substances. The Department contends that SLCMs should be classified under CTH 8705, which pertains to special purpose motor vehicles.Court's interpretation and reasoning: The Tribunal examined the integration of the concrete mixer with the chassis and the functional design of the SLCM. It noted that the SLCMs manufactured by the importer are standalone machines integrated with the chassis, rendering the chassis unusable for other purposes. The Tribunal referenced the Telangana VAT Appellate Tribunal's decision and other rulings that classified SLCMs under CTH 8474.Key evidence and findings: The Tribunal considered the Central Excise Registration Certificate, Bills of Entry, and decisions from other authorities supporting the classification under CTH 8474. It also noted the lack of challenge by the Department against these classifications in other forums.Application of law to facts: The Tribunal applied the HSN Explanatory Notes and previous rulings to determine that the SLCM and its parts should be classified under CTH 8474. It emphasized the integrated nature of the SLCM and the fact that the chassis cannot be used separately, distinguishing it from vehicles classified under CTH 8705.Treatment of competing arguments: The Tribunal addressed the Department's reliance on homologation requirements and the Central Motor Vehicles Act, noting that such requirements do not automatically dictate classification under Chapter 87. It found the Department's arguments insufficient to override the established classification under CTH 8474.Conclusions: The Tribunal concluded that the classification of SLCM parts is dependent on the classification of the SLCM itself. Since the SLCM is classified under CTH 8474, the parts are correctly classified under CTH 8474 9000.SIGNIFICANT HOLDINGSPreserve verbatim quotes of crucial legal reasoning: 'Since the classification of the parts of the SLCM is dependent on the classification of the SLCM which falls under CETH 8474, as decided by the Central Excise Authorities and not under 8708 as stated by the customs department, the classification of the parts of the SLCM proposed by revenue in the present appeals / cross objections, fails.'Core principles established: The Tribunal reaffirmed the principle that classification of parts is inherently linked to the classification of the whole product. It emphasized the importance of consistency in classification across different tax regimes and authorities.Final determinations on each issue: The Tribunal allowed the appeals filed by the importer (Appeal Nos. C/40510/2015 and C/42422/2016) and dismissed the appeals filed by the Department (Appeal Nos. C/41217/2017 & C/41218/2017). The cross objections filed by the importer were disposed of accordingly, and the importer was deemed eligible for consequential relief as per law.