AI Drafter 
TaxTMI 
TaxTMI 
2022 (7) TMI 1097
X X X X Extracts X X X X
X X X X Extracts X X X X
....rposes of this Advance Ruling, a reference to such a similar provision under the CGST Act or MP GST Act would be mentioned as being under the GST Act. 3. BRIEF FACTS OF THE CASE AND SUBMISSION OF THE APPLLICANT ARE AS UNDER:- 3.1 The applicants registered under the provisions of CGST Act (the Act) and MP GST Act read with section 20(v) of IGST Act, vide GSTIN: 23AABCD3596Q1Z6, having principal place of business, at Mandideep (MP). 3.2 The Applicant submits that Roof Mounted AC Package Unit manufactured and supplied as per the RDSO is Squarely covered by Chapter Heading 8607 of GST Tariff. 3.3 The applicant submitted that Note 3 of Section XVII of GST Tariff is relevant for classification of goods supplied to Indian Railways by the Applicant. Section note 3 of Section XVII of GST Tariff Act is reproduced herewith for the sake of brevity. "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 headi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of wood or of concrete, or concrete guide track sections for hover trains (heading 4406 or 6810); (b) railway or tramway track construction material of iron or steel of heading 7302; or (c) electrical signaling, safety or traffic control equipment of heading 8503." The applicant submitted that in view of the foregoing facts and as per the GST Tariff, the Tariff head 8607 9910 refers to "Parts of Coach work of railway running stock. "Roof Mounted AC Package unit "Specially meant for Railways as per the design and layout Provided by them are integral part of the coach and classifiable under Chapter 8607. 3.6 Section Notes and Chapter Notes makes it clear that only parts suitable for use solely or Principally with the articles of those chapters are covered under chapter 86 to 88. These clarificatory notes leave no room for doubt. They are in clear and emphatic terms like 'must',' solely', 'proper'. Since the item in question are designed exclusively for use in Railway Rolling Stock therefore it satisfies the requirement of being classifiable as being suitable for use solely or Principally with Railway locomotives/Coach. 3.7 Judicial....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 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 or accessory." In relation to Chapter Note 3, what HSN states is: "(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, roadwheels, mudguards, etc. used on many of the mobile machines falling 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 in this Section." So, this Section Note of HSN makes it clear that final classification is determined by its principal use. The principal use of the components manufactured by the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ive that the classification of goods under section XVII of the Central Excise Tariff Act 1985, shall be determined by the principle use of the said goods. The Goods manufactured by the noticee are supplied to Indian Railways for solely and principally used in the Locomotives which is an undisputed fact. These goods are manufactured on the basis of the requirements of Indian Railways and hence cannot be used elsewhere. Chapter headings 8607 and 8608 are as follows: "8607 PARTS OF RAILWAY OR TRAMWAY LOCOMOTIVES OR ROLLING-STOCK 8608 RAILWAY OR TRAMWAY TRACK FIXTURES AND FITTINGS; MECHANICAL (INCLUDING ELECTROMECHANICAL) SIGNALLING, SAFETY OR TRAFFICS CONTROL EQUIPMENT FOR RAILWAY, TRAMWAYS, ROADS, INLAND WATERWAYS, PARKING FACILITIES, PORT INSTALLATION OR AIR- FIELDS; PARTS OF THE FOREGOING" On the basis of the above judicial pronouncements and relevant Chapter notes and section notes we submit that the Roof Mounted AC Package unit manufactured by the applicant for Indian Railways shall be classified under the chapter heading 8607 and 8608. Further in Pre GST era Board also issued circular no 16/90 Dated 11.06.90 wherein it is clarified that Radiator Assembly ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oduct "Roof Mounted AC Package Unit" is classifiable under Chapter 8607. For examining the classification of Roof Mounted AC package unit, we go through chapter 86 and we observe that chapter 86 covers "Railway or tramway locomotives, rolling-stock and parts thereof: railway or tramway track fixtures and fittings and parts thereof: mechanical (including electro-mechanical) traffic signaling equipment of all kinds" and Chapter subheading 860/ covers "PARTS OF RAILWAY OR TRAMWAY LOCOMOTIVES OR ROLLING-STOCK - Bogies, bissel-bogies, axles and wheels, and parts thereof". Ongoing through the Chapter 86, we find that this chapter covers Railway or tramway locomotive, rolling stocks and parts thereof. 7.4 Further as per chapter Note 2 of Chapter 86, heading 8607 applies, inter alia, to "(a) axles, wheels, wheel set (running gear), metal tyres, hoops and hubs and other parts of wheel; (b) frames, under frames, bogies and bissel-bogies; (c) axle boxes, brake gear; (d) buffers for rolling-stock; hooks and other coupling gear and corridor connections; (e) coachwork." 7.5 Further, as per the exclusion clause of the Chapter 86 of the GST Tariff....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t Parts made out of rubber and metal bonded together as per specification of Indian Railway and meant for use solely and exclusively for them, classification under Subheading 8607.00 of Central Excise Tariff." 7.9 In the case of Mechanico Enterprises Vs. Commissioner of C.Ex, Calcutta- II, {1998(104) E.L.T 345 (Tribunal}}, the Hon'ble Tribunal has observed that "Aluminium water tanks, principally and solely designed for use in railway coaches- classifiable under 86.07 and not under 76.11". 7.10 We also observe that, the Hon'ble Tribunal, in the case of Diesel Components Works Vs. Commissioner of C.Ex. Chandigarh {2000 (120) E.L.T. 648 (Tribunal)} has observed that "Ports of internal combustion engine used exclusively for Railway locomotive classifiable by virtue of Section Note 3 of Section XVII of Schedule to the Central Excise Tariff Act; classifiable under Chapter 86 as parts of Railway locomotive and not under chapter 84 of the Central Excise Tariff Act, 1985." 7.11 Similar views has been observed by the Hon'ble Tribunal, in the case of Rail Tech Vs Commissioner of Central Excise, Chandigarh {2000 (120) E.L.T. 393 {Tribunal} that "Aluminium Windows, doors a....