TaxTMI 
TaxTMI 
2020 (7) TMI 107
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....4 (hereinafter called as HVF or Applicant) is a Central Government Department coming under the Ordinance Factory Board, Ministry of Defense, and Government of India and are engaged in the manufacturing Tank and Tank Parts. They are registered under GST vide Registration No. 33AAAJH0260P1ZA. The applicant has sought Advance Ruling on the following: 1. Whether Tank and all Tank parts supplied by the applicant is considered under HSN code "87100000-Tank and other armoured fighting vehicles, motorized, whether or not fitted with weapons and parts of such vehicles"? 2. Whether parts manufactured specifically by applicant for TANK shall be considered under 87100000? 3. Whether parts and accessories supplied by their vendor specifically manufactured for tank parts and the same is not supplied to any other company will come under the HSN 87100000? 4. Whether tank parts of the following shall be considered under 87100000 or not:- O Ring; U Drill; Accumulator Assembly; Adaptor Assembly; Angle piece; Armature Assembly; Armour Steel Plate; Assembly Fixture; Assembly Bracket; Axial Bearing; Axle; Ball Bearing; Band Assembly; Base Assembly; Battery; B....
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....apply to the certain articles, whether or not they are identifiable as for the goods for this section. In view of the above, they are doubtful of whether which parts will be coming under HSN 87100000 and which parts will not be coming under this code. Hence, the applicant has sought Advance Ruling to clarify which parts will be covered under HSN code 87100000. They have also emphasized that the parts and accessories manufactured by them or supplied by outside vendor, all are specifically designed and is not used in any other product. 3. The applicant was heard on 07.08.2018. Shri. H.S.Manoharan, Cost Accountant and Shri. Muthusamy Murugesan, Junior Works Manager of the applicant Company appeared for the hearing. They stated that the parts listed in their application are manufactured by their vendors and these specifically went for Tank T-90, T-72. However, some of the parts may be falling under the exemption to Chapter Note 87100000. They undertook to submit a write-up and technical literature, drawings of each part along with a copy of recent Supreme Court judgment within 2 weeks. 3.1 The applicant vide their letter Lr.No. HVF/ MC/ 040 / GST/ Advance Ruling/2018-19 dated 15.....
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....must be understood to have been transported as a complete machine, therefore levy of duty should be under sub-heading 8402.10 and not sub-heading 8402.90. They stated that they will submit technical specifications and Purchase Order and purpose of each part in 2 weeks time. The State Authority appeared and submitted that parts of general use cannot be classified under Chapter 87. Classification will depend on each part which requires knowledge of their technical nature. 4.1 HVF vide Letter No.: HVF/MC/Adv.Ruling/2018-19 dated 26.03.2019, furnished the details regarding the Nomenclature, Technical Specifications, Drawings, Material, Usage on Final Product (Armoured Vehicle) in a Tabular form. They further stated that the hard/ softcopies of technical drawings could not be shared as HVF is Defense Establishment manufacturing Armoured Vehicles for Indian Army which is coming under Official Secrets Act 1923 and that their representatives will bring the hard copies of drawings, during the hearing for clarifying the technical details. 5. The applicant was heard on 9.4.2019. S/Shri. H.S.Manoharan, Auditor and A.Kannan, Junior Works Manager of the Applicant Company appeared for the h....
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....s excluded many articles as "Parts" and "Parts and accessories". The classification sought for the articles submitted by the applicant under the Question No.4 given in Para 1 supra are found to be parts of general use, joints etc, which are specifically excluded under section XVII in point No.2 under HSN Code 87100000. (ii) Also, all such articles whether manufactured by the applicant by himself or purchased from vendors shall be covered under exclusion list under Section XVII in point No.2 of HSN code 87100000. 8. The various submissions made by the applicant were examined. We find that the Advance Ruling sought is to determine 1. Whether Tank and all Tank parts supplied by applicant is considered under the HSN code "87100000-Tank and other armoured fighting vehicles, motorized, whether or not fitted with weapons and parts of such vehicles"? 2. Whether parts manufactured specifically by applicant for TANK shall be considered under 87100000? 3. Whether parts and accessories supplied by their vendor specifically manufactured for Tank Parts and the same is not supplied to any other company will come under the HSN 87100000? 4. Whether ta....
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....017, tariff heading, sub-heading, heading and chapter shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 and the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall be applied for the interpretation and classification of goods. 9.1 Chapter Heading 8710 of Customs Tariff states 8710 00 00 TANKS AND OTHER ARMOURED FIGHTING VEHICLES, MOTORISED, WHETHER OR NOT FITTED WITH WEAPONS, AND PARTS OF SUCH VEHICLES kg. Free - Chapter 87 is under Section XVII. Section Note 2 to Section XVII states: 2. The expressions "parts" and "parts and accessories" do not apply to the following articles, whether or not they are identifiable as for the goods of this Section: (a) joints, washers or the like of any material (classified according to their constituent material or in heading 8484) or other articles of vulcanised rubber other than hard rubber (heading 4016): (b) parts of general use, as defined in Note 2 to S....
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....A) Parts and accessories excluded by Note 2 to Section XVII. This Note excludes the following pans and accessories, whether or not they are identifiable as for the articles of this Section : (1) Joints, gaskets, washers and the like, of any material (classified according to their constituent material or in heading 84.84) and other articles of vulcanised rubber other than hard rubber (e.g., mudguard-flaps and pedal covers) (heading 40.16). (2) Parts of general use as defined in Note 2 to Section XV, for example. cable and chain (whether or not cur to length or equipped with end fitting, other than brake cable, accelerator cables and similar cables suitable or use in vehicles of Chapter 87), nails, bolts. nuts, washers, cotters and cotter-pins, springs (including leaf springs tor vehicles) (such goods of base metals fall in Chapters 73 to 76 and 78 to 81, and similar goods of plastics fall in Chapter 39), and locks, fittings or mountings for vehicle coachwork (e.g., made up ornamental beading strips, hinges, dour handles, grip bars foot rests, window opening mechanisms.), number plates, nationality plates, etc (such goods of base metals fall in Chapter 83, ....
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....g 85.12) electrical signalling apparatus for other vehicles (e.g. trains) or for aircraft or ships (heading 85.31), electrical defrosters or demisters for such other vehicles, aircraft or ships (heading 85.43). (f) Electric heating units for motor or railway vehicles, aircraft., etc, (heading 85.16). (g) Microphones, loudspeakers and audio-frequency electric amplifiers (heading 85.18). (h) Ratio transmitters and receivers (heading 85.25 or 85.27), (ij) Electrical capacitors (heading 85.32). (k) Pantographs and other current collectors for electric traction vehicles, and fuses, switches and other electrical apparatus of heading 8535 or 85.36. (l) Electric filament lamps and electric discharge lamps, including sealed beam lamp units, of heading 85.39. (m) Other electrical fittings, such as insulated electric wire and cable (including wiring sets) and electrical articles of graphite or other carbon, whether or not fitted with terminals, insulators, insulating fittings (headings 85.44 to 85.48). (8) Instruments and apparatus of Chapter 90, including those used on certain vehicles, such as : (a) Photographi....
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....ewhere in the Nomenclature. e.g. : (1) Profile shapes of vulcanised rubber other than hard rubber, whether or not cut to length (heading 40.08). (2) Transmission belts of vulcanised rubber (heading 40.10). (3) Rubber tyres, interchangeable tyre treads, tyre flaps and inner tubes (headings 40.11 to 40.13). (4) Tool bags of leather or of composition leather, of vulcanised fibre, etc. (heading 42.02). (5) Bicycle or balloon nets (heading 56.08). (6) Towing ropes (heading 56.09). (7) Textile cat pets (Chapter 57) (8) Unframed safety glass consisting of toughened or laminated glass, whether or not shaped (heading 70.07) (9) Rear-view minors (heading 70.09 or Chapter 90 - see the corresponding Explanatory Notes). (10) Unframed glass for vehicle headlamps (heading 70.14) and, to general the goods of Chapter 70. (11) Flexible shafts for speed indicators, revolution counters. etc. (heeding 84.83). (12) Vehicle seats of heading 94.01 Parts of general use as defined in Note 2 to Section XV states: 2.- Throughout the Nomenclature, the expression "parts of general use" m....
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.... their main activity is manufacturing Tank and Tank Parts. Tank is completely assembled in HVF, whereas some parts of Tank are manufactured separately in HVF and some parts of Tank are procured from outside vendors on the specification given by HVF. Tanks' supplied by the applicant are classifiable under CTH 87100000 as seen from the above. 10.1 On a joint reading of the above provisions, it is clear that chapter 8710 0000 covers Tank and its Parts', provided the Parts satisfy the following conditions, namely: a. They must not be excluded by the provisions of the Note 2 to Section XVII b. They must be identifiable as being suitable for use solely as principally with such vehicles; and c. They must not be more specifically included in elsewhere in the Nomenclature Therefore only those parts which satisfies the above conditions are to be classified under CTH 8710 0000 and those which do not satify both the stipulated conditions as above, are to be covered in the respective CTH. This view finds support from the decision of Hon'ble Supreme Court in the case of Intel Design Systems (India) Pvt. Ltd. Vs. Commissioner of Customs & C.Ex [2008 (223) E.L.T....
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....ra 8 above shall be considered under 8710 0000 or not. Subsequently, during the hearing held on 21.05.2019, they stated that out of these, only 17 items are being supplied by them and the rest are items which they receive/procure from vendors and hence they stated that clarification is now sought for these 17 parts only. These parts are: Casing Assembly; Clip Assembly; Connector Assembly; Dowel Pin; Gasket Assembly; Hydraulic items(All Types); Mandrel Assembly; Needle Bearing; Nozzle Assembly; Panel Assembly; Planet Pinion; Plate Assembly; Retainer Steel; Sleeve Assembly; Stiffner; Support Assembly; Valve Assembly. 10.2 HVF has stated that out of the above, Dowel Pin, Gasket Assembly, Retainer Steel, Stiffner and Valve Assembly are purchased and sold as such as spares. The applicant has furnished the invoice of the supplier and their Tax invoice towards supply of these items. On perusal of the purchase Invoices, it is seen that the seller has classified the goods and the HSN is given in the Invoice raised on the Applicant. The applicant supplies the goods as such as spares to Central Vehicle Depot, Ministry of Defence. As seen under Para 9 above, to be considered as Par....
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....the Nomenclature. Hence, "Stiffner" is not classifiable under CTH 87100000 as parts. 5. Valve Assembly: The applicant has stated that it is made up of 1 valve assembly, 8s 5 components in spring, steel body, packing, union. This is used as controlling device in hydro pneumatic (AIR) system of Tank. It is used in air supply system of tank. This item is not excluded by the provisions of Note 2 to Section XVII nor is it more specifically included in elsewhere in the Nomenclature. It is identifiable as being suitable for use solely as principally with Tanks and as such is classifiable under CTH 87100000. 10.3. With respect to other items, the applicant has furnished detailed description of the item, usage, Purpose in the functioning of the Tank and materials involved. As seen under Para 9 above, to be considered as 'Parts of Tank' under CTH 8710 0000, the items are to be identified as being suitable for use solely as principally with the Tank and should not be excluded under Section Note 2 and should not be more specifically covered elsewhere in the Nomenclature. Applying the above to each part, the clarification as to whether the said items are to be considered as tank par....
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....Note 2 to Section XVII nor is it more specifically included in elsewhere in the Nomenclature. It is identifiable as being suitable for use solely as principally with Tanks and as such is classifiable under CTH 87100000. 5. Mandrel Assembly: It is used as special tools & Accessories in maintenance kit of tank. It is made of steel pipe and steel pin. It acts as holder for shell after firing. This item is not excluded by the provisions of Note 2 to Section XVII nor is it more specifically included in elsewhere in the Nomenclature. It is identifiable as being suitable for use solely as principally with Tanks and as such is classifiable under CTH 87100000. 6. Needle bearing: It is made up of steel alloy and it is the machined component acting as bearing bushing. It is used in 4th planetary gear Oset of Side gear box. Needle Bearing merits classification under CTH 8482, Needle bearings are in general classifiable under chapter 8482. Para (A) (6) (b) of Explanatory Notes to Note 2 of Section XVII on the 'Parts and Accessories' excludes 'Ball or roller bearings' of chapter 8482 from being classified as parts of articles of this Section XVII. Therefore, "Needle bearing" is....
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....rt Assembly: It is made up of four components by welding. It involves steel pipes and flanges. It is used control linkages of Tank System. It is stated as a direct material used in Tank with specific drawings available. This item is not excluded by the provisions of Note 2 to Section XVII nor is it more specifically included in elsewhere in the Nomenclature. It is identifiable as being suitable for use solely as principally with Tanks and as such is classifiable under CTH 87100000. 12. Sleeve Assembly: It is made up of two assembly & two Components (Slipcover & sleeve). It is mainly made up of steel sleeve, fabric cotton cover. It is used in arrangement of SPTA in Turret and is used in Conveyor Deck in front of Gunner's seat. It is stated as a direct material used in Tank with specific drawings available. This item is not excluded by the provisions of Note 2 to Section XVII nor is it more specifically included in elsewhere in the Nomenclature. It is identifiable as being suitable for use solely as principally with Tanks and as such is classifiable under CTH 87100000. 11. The last question raised in the application is 'If their vendor is supplying parts under an HSN code....