TaxTMI 
TaxTMI 
2019 (7) TMI 38
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....r certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act/MGST Act would be mentioned as being under the "GST Act" 02. FACT'S AND CONTENTION - AS PER THE APPLICANT "STATEMENT OF RELEVANT FACTS HAVING A BEARING ON THE OUESTION(S) ON WHICH ADVANCE RULING IS REOUIRED. 1. M/s. Hyva India Pvt. Ltd. ('Applicant) having its corporate head office at EL-215, Mahape, Navi Mumbai - 400710 and having various manufacturing units across the country, is engaged in the manufacture and supply of hydraulic kits, tippers, compactors, cranes, tail lifts, hook loaders, control valves etc. 2. The present application is filed in respect of one of the products namely "Hydraulic Kit". Hydraulic Kit is a combination of various items including Hydraulic front end cylinder, Gasket, washers, MTG Kit valves, hose, pipes, Oil tanks, cables, etc. along with other parts which are used for the fixing / mounting on a motor vehicle c....
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....ers; whereas body builder to whom the applicant sells the Hydraulic Kit uses the Hydraulic Kit in its factory/ premises, to be fitted on the chassis of the vehicle. In some case, the Hydraulic Kit is cleared with or without pump to the dealers / distributors or OEMS. 8. In case of sale of Hydraulic Kits to OEMs, the applicant receives chassis from the OEMs for fitting of body along with Hydraulic kit. In such cases, applicant supplies the body with Hydraulic Kit as a complete product/solution to the customers (OEMs) and clears the resultant product i.e. Body + Hydraulic Kit under Chapter Heading No.87.07 of the First Schedule of the Customs Tariff Act attracting GST @28%. In some instances, the applicant also clears/supplies the body alone to the OEMs under Chapter Heading No.87.07 of the First Schedule of the Customs. Tariff Act attracting GST @ 28%. 9. In the present application, the applicant is seeking the clarification regarding the correct classification of Hydraulic Kit supplied to Dealers / Distributors or body builders as such from the factory of the applicant. 10. As per the understanding of the applicant, there is an ambiguity regarding the correct classificatio....
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....ay be prescribed and shall be paid by the taxable person. C.2 The Central Government has issued Notification No,1/2017-Central Tax (Rate) dated 28.6.2017 in exercise of the powers under Section 9(1). This Notfn., in Sch. I to VI specifies goods, which will be levied to tax at the rate of 2.5%, 6%, 9%, 14%, 1.5% & 0.125%. C.3 Chapter Heading No. 84.12 of the Customs Tariff is the relevant heading for the present matter and reads as under: Tariff Item Description of goods Unit Rate Standard Preferential Areas (1) (2) (3) (4) (5) 8412 OTHER ENGINES AND MOTORS 8412 10 00 - Reaction engines other than turbo-jets 8412 21 00 - Hydraulic power engines and motors: 8412 29 -- Other: 8412 29 10 -- Hydrojet (hydraulic jet engines) 8412 29 90 -- Other C.4. The relevant entry in Schedule-III of Notification No. 1/2017-CentraI Tax (Rate) dated 28.06.2017....
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....s would be made wherever required in relation to the respective products. C.9 The relevant portion of the Explanatory Notes to Chapter Heading No.84.12 of HSN reads as under: "(B) HYDRA ULIC POWER ENGINES AND MOTORS This group includes: (1) ... ... (2) ... (3) ... (4) Hydraulic cylinders..... (5) ... ... ... (6) Hydraulic systems consisting of a hydraulic power unit (comprising essentially a hydraulic pump, an electric motor, control valves and an oil tank), hydraulic cylinders and the pipes or hoses needed to connect the cylinders to the hydraulic power unit, the whole forming a functional unit within the meaning of Note 4 to Section XVI (see the General Explanatory Note to that Section). These systems are used, e.g., to operate civil engineering structures. C.10 For sake of reference, Note 4 to Section XVI of HSN reads as under: 4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function cover....
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....and recover kinetic energy which is stored in the hydraulic accumulator in the form of pressurized fluid. The HEADIM Hybrid system uses the stored energy to reduce or eliminate engine idling while the waste handling equipment is being operated. In your letter, you propose an alternative classification of subheading 8479.89.9899, Harmonized Tariff Schedule of the United States. (HTSUS), which provides for "Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter, parts thereof: Other machines and mechanical appliances: Other: Other: Other". The Explanatory Notes to heading 84.79 state, in pertinent part, that "This heading is restricted to machinery having individual functions, which....(c) Cannot be classified in any other particular heading of this Chapter ...". As the device under consideration is specifically provided for elsewhere in Chapter 84, classification in leading 8479, HTSUS, is precluded. The applicable sub-heading for the HEADIM Hybrid System will be 8412.29.8075, HTSUS, of the United States (HTSUS), which provides for other engines and motors, and parts thereof, hydraulic power engines and m....
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....he goods of this section. In the present case, the subject product is squarely/specifically covered under Hdg No.84.12 & hence condition (a) mentioned in para C.15 above stands not satisfied. D.6 As discussed in paras C. 1 to C. 12 above, it is clear that Hydraulic Kit is more specifically included in Heading No. 84.12 and is more specifically covered under said heading. Thus, the Hydraulic Kit does not satisfy the condition (c) mentioned in para D.3 above. D.7 Therefore, it is clear that all the 3 conditions mentioned in Heading No.8708 are not satisfied in the present case and hence, the product in question i.e. Hydraulic Kit will not be covered under Heading No.8708, COMPLETE HYDRAULIC KIT IS CLEARED FROM THE FACTORY OF THE APPLICANT IN UNASSEMBLED/DISASSEMBLED CONDITION. E.1 Applicants are clearing complete Hydraulic Kit from their factory in unassembled/disassembled condition. The Hydraulic Kit is a combination of various items including Hydraulic front-end cylinder, Gasket, washers, MTG Kit valves, hose, pipes, Oil tanks, cables, etc, E.2 To decide the classification of an item in disassembled form, rule 2(a) of the Interpretative Rules has to be invoked. The a....
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....teries and tyres, or even the engines, as examples of such articles having the essential character of complete articles- In this background, the Board once again desires the field formations to take due note of the provisions of Rule 2(a) of the above said Interpretative Rules, while dealing with such cases. Regarding import licence, the EXIM Policy restricts the imports of not only complete consumer articles but also these articles in SKD/CKD condition or ready to assemble sets. Accordingly, such imports require a specific import licence. However, in some cases it has been noticed that the various bodies of the Government like the Secretariat of Industrial Approvals, FIPB etc., have approved the projects for the manufacture of such articles, with permission to in port SKD kits in the initial period. Though the import licence is a must in these cases also, still if by mistake the importers have not obtained the licence. prior to the imports, they may be advised to obtain the same and the cases need not be adjudicated without giving this opportunity. In genuine cases, like in the cases of reputed manufacturers with a proper infrastructure for manufacturing activiti....
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....h domestic components in the United States and the completed cylinder will then be painted. The applicable subheading for the completed cylinder, number 0127, will be 8412. 21.0075, Harmonized. Tariff Schedule of the United States (HTSUS), which provides for hydraulic power engines and motors, other linear acting cylinders. The rate of duty is free. The applicable subheading for the imported components, for use in the assembly of cylinder number 1503, i.e., the cylinder, rod assembly, cylinder bottom, gland, piston and pivot tube, will be 8412.90.9005, HTSUS, which provides for parts of linear acting hydraulic power engines and motors. The rate of duty is free. In your request you also inquire about the required country of origin marking for the imported components that are assembled by Swanson in the United States. The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a ....
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.... A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Kenneth T. Brock at 646-733 3009. F. Without prejudice to the above submission, the applicant submits that the product in question would be classified under Heading No.84.79 of the Customs Tariff Act. F.1 Chapter Heading No.84.79 of the Customs Tariff Act covers "machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter" F.2 The relevant entry of Notification No. 1/2017-lntegrated Tax (Rate) dated 28.6.2017, for the purpose of this opinion as in Schedule - III is as under: Sl.No. Chapter/Heading/Sub-Heading/Tariff Item Description of Goods 366 8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter [other than Passenger boarding bridges of a kind used in airports (8479 71 00) and other (8479 79 00)]. F.3 Heading No .84.79 of Chapter 84 is a residuary entry which covers mechanical equipment which ....
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....linders to the hydraulic power unit. 1.3 In light of the above HSN explanatory notes, it was submitted in the Advance Ruling Application in paras C.1 to C.12 (Refer Page no. 14-19 of the Advance Ruling Application) that "Hydraulic Kit" is the same as "Hydraulic System" and thus classifiable under Chapter Heading 84.12 of the CTA. 1.4 To further substantiate the said position, reference is made to case laws which lay down the "Common Parlance test". "COMMON PARLANCE TEST" FOR THE PURPOSE OF IDENTIFYING THE APPROPRIATE CLASSIFICATION 1.8.1 The Supreme Court in the case of Commissioner of Central Excise, New Delhi vs. Connaught Plaza Restaurant (P) Ltd., New Delhi (286) E.L.T. 321 (S.C.) = 2012 (12) TMI 149 - SUPREME COURT (Refer Page no.113 of "Index - 1" submitted during the admission PH) upheld the "Test of Common Parlance" laid out in the case of Commissioner of Trade Tax, U.P. vs. Kartos International 2011 (268) EL.T. 289 (S.C) (Refer Page no. 129-13 7 of "Index - 1 "submitted during the admission PH). The court held as under: "31. Therefore, what flows from a reading of the aforementioned decisions is that in the absence of a statutory definition....
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....ed States International Trade Commission. 1.6 Ruling No. No. 53556 (Refer Page no. 138 of Index submitted during the admission PH) dated April, 1, 2009, the product in question was a 'spoiler drive mechanism' used to raise and lower the rear spoiler on a motor vehicle. The product comprised of two hydraulic telescoping linear cylinders, a hydraulic fluid power pump, hydraulic hose line and mounting parts, are imported together as a set. The Authority held that the same shall be classifiable as a "Hydraulic System" under Tariff Item no. 84.12.21.0045. The relevant portion from the ruling is extracted below for your reference: 'N053556 ; April 1, 2009 CLA-2-84: OT:RR:E:NC:1:102, CATEGORY: Classification; TARIFF NO.: 8412.21,0045 Mr. Robert Resetar Porsche Cars North America, Inc. 980 Hammond Drive (Suite 1000) Atlanta, GA 30328 RE: The tariff classification of a spoiler drive mechanism from Germany Dear Mr. Resetar: In your letter dated March 3, 2009 you requested a tariff classification ruling. A photograph and technical drawing were submitted. The article in question is described as a spoil....
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....United States International Trade Commission held that the applicable subheading for the wheel loader pipes will be 8412.90.9015 as subject parts are more specifically provided for as parts of the hydraulic systems in which they are used. The relevant extract has been reproduced below for your kind perusal: NYL81368; December 21, 2004 CLA-2-84:RR:NC:1:102 L81368; CATEGORY: Classification ; TARIFF NO.: 8412.90.9015 Ms. Shannon E. Fura Sandler, Travis & Rosenberg, P.A. Attorneys at Law 225 W. Washington Street (Suite 1550), Chicago, IL 60606 RE: The tariff classification of parts for wheel loader hydraulic systems of unspecified origin Dear Ms. Fura: In your letter dated November 30, 2004 you requested a tariff classification ruling on behalf of your client Volvo Construction Equipment North America ("VCENA"). The articles in question are described as parts of wheel loaders. These parts consist of various pipes designed for use in specific applications on VCENA wheel loaders. You indicate that these parts are identified internally by VCENA as part numbers VOE11172221, VOE 11173847, VOE11015677, VOE111724....
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....r. we find that the subject parts are more specifically provided for as parts of the hydraulic systems in which they are used. The applicable subheading for the wheel loader pipes, part numbers VOE11172221, VOE11173847 VOE11015677 VOE11172470 and VOE11023340 will be 8412.90.9015 HTSUS which provides for other parts of hydraulic power engines and motors. The rate of duty will be free. 1.8 The United States International Trade Commission in Ruling No. NY 188204 (Refer Page no. 149 - 150 of "Index-II" submitted during the final PH) while ruling on the appropriate classification of a "Hydraulic ESD" held that since the said item consisted of a hydraulic pump, a "pressure pilot", a fluid reservoir, and other system controls, it is classifiable under 84.12.90.9080 of the HTSUS which provides for "Hydraulic Transmission Systems." 1.9 It is further submitted that Para 10, 11 and 12 of the Department's submission also state that the said "Hydraulic Kit" is appropriately classifiable under Chapter Heading 84.12 of the CTA. 1.10 In light of the above stated submissions, it is humbly submitted that "Hydraulic Kit" is classifiable under Chapter Heading 84.12 of the CTA. B. ....
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....ssification under Chapter Heading 87.06 of the CTA. C. WITHOUT PREJUDICE TO THE ABOVE SUBMISSION IF THE PRODUCT IS NOT CLASSIFIABLE UNDER CHAPTER HEADING 84.12 OF THE CUSTOMS TARIFF ACT 1975 THEN IT SHALL BE CLASSIFIABLE UNDER CHAPTER HEADING No.84.79 OF THE CUSTOMS TARIFF ACT 1975 3.1 In the alternative and without prejudice to the submissions made above, it is humbly submitted that even if the authority is of the view that "Hydraulic Kit" is not classifiable under Chapter Heading 84.12 of the CTA, then the only other heading that it shall be classifiable under shall be Chapter Heading 84.79 of CTA which covers "machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter" attracting GST at the rate of 18%. 3.2 The same has been substantiated under Para F.1 to F .5 of the Advance Ruling Application submitted to the Authority. 04. CONTENTION AND OBJECTIONS TO ADMISSION OF THE APPLICATION- AS PER THE CONCERNED OFFICER 3. As per para 2 of Annexure A of the Application, the product Hydraulic Kit is a combination of various items including Hydraulic front-end cylinder, Gasket, washers, MTG kit valves, hose; pipes, oi....
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....Hydraulic cylinders and the pipes or hoses needed to connect the cylinders to the hydraulic power unit, the whole forming a functional unit within the meaning of Note 4 to Section XVI (see the General Explanatory Note to that Section). These systems are used eg. to operate civil engineering structures. 7. In view of the above, it appears that the Hydraulic Kit is a mechanical appliance and is appropriately classifiable under Tariff Heading 8412, attracting CGST @ 9% as per para 6 of the General Explanatory Note, which is stated above. This mechanical appliance, though fitted on the chassis of the motor vehicle cannot be treated as a parts and accessories of the motor vehicles of Headings 8701 to 8705, so as to classify the same under Heading 8708 which reads as under: Parts and Accessories of the Motor Vehicles of Headings 8701 to 8705 (Other parts and accessories of bodies (including cabs); Other parts and accessories) 8. Chapter Heading 87.08: covers "Parts & accessories of the motor vehicles of headings 87.01 to 87.05". General Explanatory Note to Section XVII under Chap. Heading 87.08 Parts and accessories of the Motor Vehicles of Heading Nos. 87.01 to 870.5, int....
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....ingh, Advocate and Sh. Jugal Nanda, AGM-Taxation & Casting appeared and argued as per submissions. Jurisdictional Officer Ms. Arpita S., Asstt. Commissioner of CGST & CX, Division IV, Belapur appeared. 05. OBSERVATIONS We have gone through the facts of the case, documents on record and written submissions made by both, the applicant and the jurisdictional office. We find that the issue before us is of classification of the product 'Hydraulic Kits' supplied by the applicant to dealers / distributors or body builders. The applicant has submitted that they supply 'Hydraulic Kits' which is a combination of various item including Hydraulic front end cylinder, Gasket, washers, MTG Kit valves, hose, pipes, Oil tanks, cables etc. along with other parts which are used for the fixing / mounting on a motor vehicle chassis. The Hydraulic kit is of a kind fixed on a motor vehicle chassis and can be used to lift the body of truck, tipper, etc, Further, the "Hydraulic Kit" is used in bodies/platform, detaching sides, tipper bodies falling under Chapter Heading No. 8709 as well as for other trailers for transport of goods such as agricultural, public etc., trailer (whether or not tipper) ....
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.... Note to heading 8412 and Note 4 to Section XVI which are mentioned below. HYDRAULIC POWER ENGINES AND MOTORS This group includes: "(B) HYDRAULIC POWER ENGINES AND MOTOR This group includes: (1) ... .... (2) ... ... (3)... (4) Hydraulic cylinders..... (5) ... ... (6) Hydraulic systems consisting of a hydraulic power unit (comprising essentially a hydraulic pump, an electric motor, control valves and an oil tank), hydraulic cylinders and the pipes or hoses needed to connect the cylinders to the hydraulic power unit, the whole forming a functional unit within the meaning of Note 4 to Section XVI (see the General Explanatory Note to that Section). These systems are used, e.g., to operate civil engineering structures. For sake of reference, Note 4 to Section XVI of HSN reads as under: "4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the h....