Parts of packing machinery assessed under HS No.84229090

[MANOHARAN ARUMUGAM]

Dear Exports,

We have imported Motors which are an integral part of the packing machine and cleared the goods under CTH 84229090 and paid concessional rate of BCD @ 5% under Sl.No.455 of Customs Notification No.50/2017 dt.30.06.2017. However, we received a demand notice from customs stating that Motors to be assessed under CTH 8501 and asked us to pay the differential duty.

Without the motors, the packing machine cannot function. Whether our stand is right or department's stands is correct. If our stand is correct, can you support with any case laws in this regard?

Thanking you in advance.

AI Summary

Tariff classification of integral machine parts decides applicable duty and can trigger differential duty demands on import assessment.
A classification dispute arises over whether imported motors integral to packing machinery should be classified with the machine or as electric motors under their own heading. The functional integration test-whether the machine cannot operate without the motor-is central, with the revenue bearing the onus of proof. Legal authorities recognize that specific tariff notes and express inclusion of electric motors in their own heading may nevertheless require separate classification. The factual matrix of each case and divergences between customs tariff treatment and IGST notifications affect potential differential duty assessments.