AI Drafter 
TaxTMI 
TaxTMI 
2023 (3) TMI 424
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....h design and Standard Organisation (RDSO) specification and drawing". 2. The appellant filed an application for Advance Ruling with the Authority for Advance Ruling, Punjab (hereinafter referred to as, "AAR, Punjab"). The question for consideration was that whether roof mounted Air conditioning unit especially for use in railway coaches (manufactured as per railway design) should be classifiable under HSN- 8415 1090- IGST 28% or under HSN 8607 99 - IGST 18% as parts of Railway Coaches/ Locomotives. 3. AAR Punjab, vide its Order No. AAR/GST/PB/016 dated 16th of August,2022 ruled that the Roof Mounted Air-Conditioning unit manufactured by the applicant are classifiable under HSN Heading 8415 and the classification of the goods shall not alter on account of supply by them to Railways II. Order of the Authority for Advance Ruling: Relevant extract of the order No. AAR/GST/PB/016 dated 16thof August,2022 issued by the AAR, Punjab is reproduced hereunder:- "The Roof Mounted Air-Conditioning unit manufactured by the applicant are classifiable under HSN Heading 8415 and the classification of the goods shall not alter on account of supply by them to Railways." III. S....
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....the same product becomes uncompetitive. C. The impugned goods are solely and principally used in railways; it has no other use except in railways coaches. It is an integral/ essential part of Air conditioned railways coaches. As per note 3 to section XVII by applying "user test", the impugned goods are classifiable under HSN 8607. Discussion and Findings: 4. The primary issue that emerges from the appeal filed by the appellant is regarding the classification of the roof mounted Air conditioning unit. The AAR Punjab, vide its Order No. AAR/GST/PB/016 dated 16th of August, 2022 ruled that the Roof Mounted Air-Conditioning unit manufactured by the applicant are classifiable under HSN Heading 8415 and the classification of the goods shall not alter on account of supply by them to Railways. 5. In order to comprehend the issue under consideration it would be pertinent to reproduce the contentious entries of the tariff so that a clarity can be developed regarding the classification of the goods. The Heading 8415 reads as under:- 8415 AIR CONDITIONING MACHINES, COMPRISING A MOTOR-DRIVEN FAN AND ELEMENTS FOR CHANGING THE TEMPERATURE AND HUMIDITY, INCLUDING THOSE MACHINE....
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....; (h) frames, underframes, bogies and bissel-bogies; (c) axle boxes, brake gear; (d) buffers for rolling-stock; hooks and other coupling gear and corridor connections; (e) coachwork," 10. The chapter note details the various good which may fall within the scope of the said entry i.e. 8607. It is perceptible that the air conditioning machines are not mentioned in the said Chapter note. The only aspect that requires consideration here is that the said chapter note mentions the word "inter-alia" which literally means "among other things". Thus, it can be deduced that the Chapter Note (2) is not the exhaustive chapter note detailing all the goods that may fall within the ambit of the said entry. 11. Now coming to the Section note that defines the domain of the Section XVII VEHICLES, AIRCRAFT, VESSELS AND ASSOCIATED TRANSPORT EQUIPMENT of which Chapter 86 is a part. Section Note 2 of the said section provides that 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 ac....
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.... elements for changing the temperature and humidity. It further includes those machines even where the humidity cannot be separately regulated. The said entry clearly applies to the good under question as the same is an air conditioner unit that is roof mounted in the railway coaches. The important aspect that requires attention here is that the said heading does not define the good by the manner in which the fitting is done or the particular vehicle in which the same is to be deployed. Thus, the said heading is wide enough to cover within its realm all kind of air conditioning machines irrespective of the fact that whether the same are manufactured in such a manner to be installed on a particular vehicle or a machine or even a location. It can be inferred that once the said good is classified under the heading 8415, then by virtue of the clause (e) of the Section Note 2 of the Section XVII, the same is excluded from classification under heading 8607. 15. The above line of argument is further amplified once the Explanatory notes to the Chapter 84 are referred. The Explanatory Notes to Chapter 84 under Heading 'General' and sub heading '(B) General Arrangement of the ....
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....401 to 8479 shall not be treated or classified as "parts" or "parts and accessories" for this section. Thus, the goods being manufactured by the appellant fail to satisfy the second condition of the said explanatory note and therefore lose their claim to classification under the heading 8607. 19. The appellant has further attacked the correctness of the order of AAR, Punjab by adopting the line of argument that the said authority has ignored the Section Note 3 of Section XVII while dealing with the application. The said argument has been further substantiated by giving reference to the Hon'ble Supreme Court Judgment of Westinghouse Saxby Farmer Ltd vs. Commissioner of Central Excise Kolkata-2021(376) ELT 14(SC). 20. The said section note is being reproduced hereunder for reference:- 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 acc....
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....lied) 24. Incidentally, on a similar issue, CBIC vide Instructions No. 01/2022-Customs dated 05.01.2022 in para 10 has advised that in general, the practice of assessment of such 'parts' or any change in it may holistically keep in view and in a speaking manner, all relevant aspects including HS explanatory Notes, the relevant section and chapter notes. 25. Further the appellant has cited certain judgments in his submissions. The discussions in these judgments as well as the factual matrix detailed therein, it is clear that the specific exclusion provided to HSN 84.01 to 84.79 do not apply in above judgments. Accordingly, the judgment cited by the appellant varies from the instant appeal both on law and facts. The judgments mentioned above relates to the Chapter 73 and 76 of the erstwhile Central Excise Tariff Act, 1985 and not applicable in the instant case. 26. The appellant has further adopted the contention that Air conditioned units are to be included in the coach work. It is to be noted that the expression "Coachwork" is not defined in the Customs Tariff Act, 1975. However, the dictionary meaning of the coachwork is reproduced as under:- a) the bo....