TaxTMI 
TaxTMI 
2019 (10) TMI 798
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.... applicant furnish Some facts relevant to the stated activity: a. The applicant states that they are engaged in the manufacture and distribution of the Air Handling Units and Ventilation Units. The Air Handling Unit ('AHU') are the goods used for regulating the air and flow of air in a central air conditioning system. The AHU contains temperature controller to control the temperature. The Ventilation Units are goods used for air circulation. The goods are used in central air conditioning system and does not contain temperature control unit. Both these goods are used in central air conditioning system for handling air circulation. 4. The applicant with regard to the issues der question , submits as under: 4.1 Entry no.317B of schedule III or Notification No.1/2017 dated 28.06.2017 covers the following items: "Air or Vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters other than bicycle pumps, other hand pumps and parts of air or vacuum pumps and compressors of bicycle pumps." 4.2 As per section note no. 2(a) of Section XVI of the Customs Tariff Act, it is clarifie....
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....he purposes of classification, the relevant factors, inter alia, are statutory fiscal entry, the basic character, function and use of the goods. When a commodity falls within a tariff entry by virtue of the purpose for which it is put to, the end use which the product is put to, cannot determine the classification of that product. 5.2 The applicant states that Air Handling Units are used for air treatment functions including its moving across the ventilation systems together with its heating, cooling, humidifying, dehumidifying, filtration and energy recovery. Similarly, Ventilation Units are units serving only as a prime air mover in the ventilation systems, without any air thermal or humidity processing functions. These units consist only of fan or fan together with basic air filter. 5.3 Hence, the products are rightly classifiable under 8414 80 90 and cannot be classified as part of air conditioner under 8415 90 00. 6. Furthers the Applicant with regard to the issue that whether impugned products separately needs to be classified in terms of interpretation of Section Note No.2 (a) of Section XVI of the Customs Tariff Act, states as under: 6.1 Explanatory notes ....
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....or sub-assemblies used in the system cannot be classified as parts of machine but parts of the system. It is at best called as component / sub-assembly of a system. Hence, while classifying the said component / sub-assembly, the function of the product needs to be considered for classification purpose. The air circulation and air ventilation goods are specifically covered in Chapter 8414 and not under Chapter 8415. 7. FINDINGS & DISCUSSION. 7.1 We have considered the submissions made by the Applicant in their application for advance ruling as well as the submissions made by Sri. Jayaram Hiregange, Advocate and authorised representative of the applicant during the personal hearing. We have also considered the issues involved, on which advance ruling is sought by the applicant, and relevant facts. 7.2 At the outset, we would like to state that the provisions of both the CGST Act and the KGST Act are the same except for 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 provisions under the KGST Act. 7.3 The issue is whether the goods are Classifiable under ....
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....ing unit technically and since it is not a part of the air conditioning equipment and handles air circulation, it must be classified under 8414 80 90. The air handling unit, according to the applicant has temperature control mechanism and hence controls the temperature also along with handling the air circulation. The applicant states that no chillers are supplied with the air handling units and it is basically a part of the centralized air conditioning unit, and has exchanger for heat or temperature control. 7.6 The mechanism in the Air Handling Unit is that it has a heat exchanger or temperature control and an air blower which blows the temperature set air. It has the following parts : (1) Mixing Section (2) Filters (3) Heat Exchangers (4) Heater Section (5) Fan Section (6) Supply Section 7.7 The contention of the applicant that it must be classified under HSN 8414 80 90 is examined and the HSN 8414 80 is related to "Air or vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters", other than vacuum pumps, Hand or foot operated air pumps, ....