TaxTMI 
TaxTMI 
2021 (6) TMI 685
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....05 (hereinafter called the Applicant) are registered under GST with GSTIN 33AACCD4599E1ZO. They are in engaged in the business of manufacture of seat components and accessories which is added to the manufacturing of full seat of four wheelers. The applicant has preferred an application seeking advance ruling on the following question: i. What is the correct classification of goods manufactured by the applicant viz. "Automotive Seating System"? ii. Will the goods manufactured fall under CH 87089900 attracting GST @28% or under CH 940199990 attracting GST @18%? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant has stated that they are engaged in the manufacture of Seat Components and Accessories, which is added to the manufacturing of Full Seat of four wheelers. The parent company which is situated in Korea is called as DAS Corporation and they are engaged in the manufacture of automobile seats. The products manufactured by the applicant are Base Sub Assem....
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....anufactured by them under HSN 8708 99 00 are as follows: i. Tariff Heading 9401 covers "Seats including seats of a kind used for motor vehicles". 94019900 covers "Parts" of such seats. HSN explanatory notes states that: PARTS - The heading also covers identifiable parts of chairs or other seats, such as backs, bottoms and arm rests (whether or not upholstered with straw or cone, stuffed or sprung) and spiral springs assembled for seat upholstery. ii. Thus, it could be seen that HSN 9401 99 00 covers only those items which constitute as specific part of a seat like backs, bottoms, arm rests etc. They do not cover those items which are basically fitted under a seat on the floor of the motor vehicle. Seat could be complete without such items like Rail assembly, LH Rail assembly, etc., which are manufactured by the applicant. iii. The goods manufactured by them are not essential parts of a seat. They are basically adjuncts affixed on the floor of the motor vehicle, on which seats are mounted. These goods/mechanisms enable the passengers and drivers of automobiles to adjust seat positions for their comfort and convenience. iv. The goods manuf....
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....rchase orders and write up on the products regarding functionality of the sub-assembly and assembly for which the ruling is sought. They were asked to furnish the supreme court decision relied upon by them along with the gist on the applicability of the same to their case. 3.2 The applicant vide their letter dated 10.04.2021 has submitted for clarity that they have requested for determination of the classification of only the finished goods viz., Track assembly meant for front Left/right seat. The various sub-assemblies (which are also named in their typed set to their application) that go in to making their product viz., Track assembly are essentially parts of the track assembly. They had submitted the following documents: • Purchase order PO NO 4200000917 of their client Hyundai Transys Lear Automative India Private Limited. • Product description of the Track assembly • copy of Hon'ble Supreme Court Case law Commissioner C.Ex., Delhi Vs Insulation Electrical (P) Ltd., reported in 2008 (224) ELT 0512 (SC). 3.3 On the write-up of the Functions of the product, they have stated that (i) This Track Assembly is fitted on to the ....
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....submissions made after hearing and the comments of the Jurisdictional Authority. This application is filed to ascertain the correct classification of the Track assembly meant for left/right seat which is fixed on to the floor of the car and enables the movement of the seat forward and backward. Applicant has contended that the said product deserves to be classified as part of motor vehicle under Chapter Heading 87089900 and not as part of the seats under CH 94019990. Hence the applicant has sought ruling for the following questions: (i) What is the correct classification of goods manufactured by the applicant viz. "Automotive Seating System"? (ii) Will the goods manufactured fall under CH 87089900 attracting GST @ 28% or under CH 940199990 attracting GST @ 18%. The ruling is sought on the classification and the applicable rate for the goods manufactured and supplied and therefore the application is admissible under Section 97 of the GST Act, before this Authority. 7.1 From the submissions, we find that the applicant is engaged in the manufacture of Seat Components and Accessories, which is added to the manufacturing of Full Seat of four wheelers. The applica....
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....nsys Lear Automotive India Private Limited against Purchase order No.4200000917 dt. 26.02.2020. ii) Applicant has adopted the classification under HSN code 8708.9900 for the items namely side BRKT &RECL assembly, side ARMS & RECL assembly supplied to M/s. Daechang India seat company Pvt Ltd , Kancheepuram under their Tax invoice no. DAS20G/ 14065 dt. 03.01.2021. iii) Applicant has adopted the classification under HSN code 8708.9900 for the items namely Assembly FSC welded frame to M/s. Radiant India Pvt Ltd., Chengalpattu under their Tax invoice no. DAS20G/ 140599 dt. 03.01.2021. iv) Applicant has adopted the classification under HSN code 8708.9900 for the items namely Assy slider active LH Bolt, Lever Return Spring-Plated and Spiral spring-plated to M/s. Harita Seating Systems Ltd, Sriperumbudur vide their Tax invoice no. DAS20G/ 14775 dt. 06.01.2021. v) Applicant has adopted the classification under HSN code 8708.9900 for the items namely ASSY RSC Welded frame complete to M/s. SPACK Automotives Pvt Ltd under their Tax invoice no. 14854 dt. 07.01.2021. 7.4 In the case at hand, the goods for which the classification is sought before us is Trac....
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.... (l) brushes of a kind used as parts of vehicles (heading 9603). 3. References in Chapters 86 to 88 to "parts" or "accessories" do not apply to parts or accessories which are not suitable for use solely or principally with the articles of those Chapters. A part or accessory which answers to a description in two or more of the headings of those Chapters is to be classified under that heading which corresponds to the principal use of that part of accessory. CTH 8708 is as under: 8708 PARTS AND ACCESSORIES OF THE MOTOR VEHICLES OF HEADINGS 8701 TO 8705 8708 10 - Bumpers and parts thereof : 8708 10 10 --- For tractors 8708 10 90 --- Other -- Other parts and accessories of bodies (including cabs) 8708 21 00 -- Safety seat belts 8708 29 00 -- Other 8708 30 00 - Brakes and servo-brakes; parts thereof 8708 40 00 - Gear boxes and parts thereof 8708 50 00 -Drive-axles with differential, whether or not provided with other transmission components, non-driving axles; parts thereof 8708 70 00 - Road wheels and parts and accessories thereof 8708 80 00 - Suspension systems....
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....es of Chapters 86 to 88 (see paragraph (B) below). And (c) They must not be more specifically included elsewhere in the Nomenclature (see paragraph (C) below). (B) Criterion of sole or principal use. (1) Parts and accessories classifiable both in Section XVII and in another Section. Under Section Note 3, parts and accessories which are not suitable for use solely or principally with the articles of Chapters 86 to 88 are excluded from those Chapters. The effect of Note 3 is therefore that when a part or accessory can fall in one or more other Sections as well as in Section XVII, its final classification is determined by its principal use. Thus the steering gear, braking, systems, road wheels, mudguards, etc., used on many of the mobile machines flailing in Chapter 84, are virtually identical with those used on the lorries of Chapter 87, and since their principal use is with lorries, such parts and accessories are classified m this Section. (C) Parts and accessories covered more specifically elsewhere in the Nomenclature. Pans and accessories, even if identifiable as for the articles of this Section, are excluded it they ....
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....it is seen that the chapter heading 9401 covers only seats and parts thereof. So only such items, which constitute as specific parts of a seat such as backs, bottoms, armrests etc can be termed as parts of seats. 8.6 CTH 8708 covers 'Parts and accessories of Motor Vehicles' and CTH 9401 covers 'Parts of seats of Motor vehicles'. Now it is essential to find out the definitions of 'parts' and 'accessories'. As per Oxford English Lexico, parts and accessories would be defined as under: Parts: An amount or section which, when combined with others, makes up the whole of something. Accessories: A thing which can be added to something else in order to make it more useful, versatile, or attractive. From the above definitions, 'parts' are an amount or section which when combined with others makes up the whole of something. Hence part is an essential component of the whole without which the whole cannot be complete or cannot function. It is an integral component of the whole. As defined above, accessories are not an essential component without which the whole cannot be complete or function, but it is a component which when added....
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....;Track assemblies' are identified as being suitable for use solely or principally with the Motor Vehicles and the first condition is satisfied. The said goods are not excluded under Section Note 2 to Section XVII, which is the second condition. Track assembly being an accessory which provides add-on-value, in terms of comfort for the driver/front passenger in terms of leg room, seating position, etc is not a 'Part of vehicle seat' as has been arrived at above, and is not specifically mentioned elsewhere in the nomenclature and thereby the third condition is also satisfied. 8.8 We further find that Hon'ble Supreme Court in the case of Commissioner of Central Excise, Delhi Vs. Insulation Electrical (P) Ltd in Civil-Appeal no.5943 of 2002 dt. 27.03.2008 has decided that Seat assembly cannot be held as 'Parts' meriting classification under Chapter heading 9401, rather they would be accessories to Motor vehicles and would merit classification under Chapter heading 8708 because they are fitted in the motor car for adjustment of the seats for convenience and comfort of the passengers. The case being similar, we find the Apex Court decision squarely applicable....