TaxTMI 
TaxTMI 
2020 (7) TMI 107
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....icant) 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; Bearing Bush; Bellows; Bevel Gear; Booster Assembly; Boss Assembly; Brac....
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.... 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 15.09.2018 furnished photographs of the following spare parts: Accumulator Assembly; Angl....
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....b-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 hearing. They stated that some of the items are being consumed but other are actually being supplied to their buy....
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....nt 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 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 S....
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.... 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 Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39); (c) articles of Chapter 82 (tools): (d) articles of heading 8306: (e) machines and apparatus of headings 8401 to 8479, or parts thereof, other tha....
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....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, and similar goods of plastics tall in Chapter 39). (3) Spanners, wrenches and other tools of Chapter R2 (4) Bells (e.g., for cycles) and other articles of heading 83.06 (5) Machines and mechanical appliances, and parts thereof, of headings 84.91 to 84.79, for example : (a) Boilers and boiler equipment (heading 84.02 or 84.04) (b) Producer as generators (e.g. for cars) ....
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....s 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) Photographic or cinematographic cameras (heading 90.06 or 90.07). (b) Navigational instruments and appliances (heading 90.14). (c) Instruments and appliances used to medical, surgical, dental or veterinary sciences (heading 90.18). (d) Apparatus based on the use of X-rays and other apparatus of heading 90.22. (e) Manometers (heading 90.26) (f) Revolution counters, taximeters, speed indicators and tachometers and other instruments and apparatus of heading 90.29. (g) Measuring or checking instruments, appliances and machines of heading 90.31 (9) Clocks (e.g., instrument panel clocks) (Chapter 91). (10....
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.... (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" means : (a) Articles of heading 73.07, 73.12, 73.15, 73.17 or 73.18 and similar articles of other base metals; (b) Springs and leaves for springs, of base metal, other than clock or watch springs (heading 91.14); and (c) Articles of headings 83.01, 83.02, 83.08, 83.10 and frames and mirrors, of base metal, of heading 83.06. The Explanatory Notes to CTH 8710 reads as follows: 87.10 - Tanks and other armoured fighting vehicles, motorised, whether or not fitted with weapons, and parts of such vehicles. This heading covers tanks and other armoured fighting "Vehicles, motorised, whether or not fitted with weapons, and" parts of such vehicles Tanks are armoured fighting vehicles mounted on tracks, and armed with various weapons (guns, machine-guns, flame-throwers, etc.) usually housed in a traversing turret. They ar....
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....o 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. 135 (S.C.)] = 2008 (2) TMI 5 - SUPREME COURT, wherein the Apex Court has dealt with 'Parts supplied for Tanks'. The relevant paras are given as under: "4. As per Rule 1 on Interpretive Rules, classification of excisable goods is to be determined according to the terms of the Heading and in terms of Section/ Chapter notes. Note 2(1) to Section XVII (which governs Chapter 87) excludes the goods viz. electrical machinery and equipment (Chapter 85). The goods in question i.e. contractors, switches, control box etc. are the goods used for switching, protecting electrical circuits or for making connections to or in electric circuit. These parts/ components are specifically covered under CSH 8536.90. The GBEC Circular relied upon by the assessee is not relevant. 5. As per the Explanatory Notes to HSN the parts falling under Chapter Heading 8710 would be covered under the said chapter, provided they fulfill both the conditions i.e. they must be identifiable as being suitable fo....
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....he 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 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 parts under CTH 8710 0000 are discussed as under: 1. Dowel Pin: The applicant has stated that the component is in Hull electrical system on mounting of starter generator. It is accurate machined steel pin. It acts as locating and guiding pin. Dowel pins are classifiable in general under Chapter heading 7318. As per Section Note 2 to Section XVII on the Tarts and Accessories', parts of general use as defined in Note 2 to Section XV includes articles of Chapter 7318 which are excluded from being classified as parts under CTH 87100000. Therefore, "Dowel Pin" are not classifiable under CTH 87100000. 2. Gasket Assembly: The applicant has stated that ....
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....ered elsewhere in the Nomenclature. Applying the above to each part, the clarification as to whether the said items are to be considered as tank parts under CTH 8710 0000 are discussed as under: 1. Casing Assembly: The applicant has stated that it is the assembly of six items, four items are made up of Fabric and two made of Rubber. It acts as a protective casing for conveyor guard under belts for fastening the gasmask. This item is individually assembled in final tank assembly. 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. 2. Clip Assembly: The applicant has stated that this item is used on cooling system of tank. It is used for tightening the hoses with pipes. It is made up of steel made Band, Bolt, washer and clamp and is stated as direct material used in Tank. Pipe clips/clamps or fittings are classifiable in general under Chapter heading 7307. As per Section Note 2 to Section XVII on the Parts and Accessories', parts of general use as defined in Note 2 to ....
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....apter 8482 from being classified as parts of articles of this Section XVII. Therefore, "Needle bearing" is not classifiable under CTH 87100000 as parts. 7. Nozzle Assembly: It is used in hydro pneumatic cleaning of turret. It is made of pipe, nozzle, washer & strap by soldering method. It is used to generate high speed jet of water & cleaning. This item is stated as a direct material used in the 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. 8. Panel Assembly: This is the driver instrument panel made up of 20 assemblies and 98 components. This panel indicates various control parameters like speed, power, temperature, oil & water level etc. It is made up of instruments, connections, cables, knobs, handles &switches. Finally fitted in Tank Hull electrical. This is stated as a direct item used in tanks. 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 identifiabl....