TaxTMI 
TaxTMI 
2024 (3) TMI 675
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....ng the tax liability or reducing the amount of admissible input tax credit shall be made, unless the appellant has been given an opportunity of being heard. 2. Under Section 103(1) of the Act, this Advance ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only,- (a) on the applicant who had sought it in respect of any matter referred to in sub-section (2) of Section 97 for advance ruling; (b) on the concerned officer or the jurisdictional officer in respect of the applicant. 3. Under Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the said advance ruling have changed. 4. Under Section 104(1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-section (1) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made. At the outset, we would....
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....te of tax on the seat covers manufactured by them with the Authority for Advance Ruling vide their application dated 06.06.2022. The question raised in the application was as under "Whether the GST rate of tax of 28% collected and paid for Bike and Scooter seat cover manufactured and sold by them under CTH 87089900, is correct." The Authority for Advance Ruling (AAR) vide Order No. 105/AAR/2023 dated 05.09.2023 ruled as follows "Two wheeler seat covers merit classification under CTH 87149990 and are taxable at 14% CGST + 14% SGST vide entry No. 174 of Schedule IV of Notification No. 01/2017-CT(Rate) dated 28.06.2017, as amended." 3.2. The Original Authority (AAR) had arrived at the above decision based on the following discussions held therein, viz., • The heading 8708 relates to parts and accessories of Motor Vehicles falling under 8701 to 8705, which covers Motor vehicles such as Tractors, Motor Car etc. and not two wheelers, and since the product involved is seat cover for two wheeler, which are not parts and accessories of Motor vehicles under headings 8701 to 8705, it will not get covered under 8708. • The heading 940120 covers....
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.... and entry 94019900 is for parts of seats, which includes seats of a kind used in motor vehicles. • The AAR had had come to erroneous conclusion that the seat cover is purchased by the customer for comfort and convenience, whereas the seat covers are tailor made for each type of two wheeler seats and it cannot be used for different vehicles. It is to protect the seat and there is no comfort or convenience to the rider or the pillion rider by any means. • As per note 3 to Section XVII of the Customs Tariff Act, 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 and accessory. • As per Rule 3(a) of the General Rules for the Interpretation of import Tariff, heading which provides the most specific description shall be preferred to headings providing a more general description. • CTH 94019900 that refers to parts of seat for two wheeler is more specific as compared to CTH 87141090, which is a general entry as it speaks about parts of two wheeler as a whole. • The finding of AAR that i....
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....lly considered all the material on record, the various submissions made by the Appellant and the applicable statutory provisions. We find that the product in question is Bike and Scooter Seat covers. The Authority for Advance Ruling (hereinafter referred to as 'AAR') has classified the product "Two wheeler seat covers" (that includes Bike and Scooter seat covers) under CTH 87149990. The Appellant is before us, seeking to set aside the Ruling given by the Authority for Advance Ruling (AAR), classify the seat cover under CTH 94019900 and pass any such further or other order(s) as deemed fit and proper in facts and circumstances of the case. 6.2. We find that the Appellant are manufacturers of seat covers for two-wheeler bikes and scooters. From the submission made by the Appellant, we find that in the said manufacturing process the "U" Foam which is purchased from other dealers are cut to the shape of Two-Wheeler Seats and along with Rexine sheets are stitched and the said Seat Covers are fitted into the Two Wheelers like Bike and Scooter. Then they supply the same to the two-wheeler dealers and also to local market. As per the Appellant, these seat covers are meant for the protec....
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....while Rexine of various textures, colours, etc., lend primarily beauty and to some extent protection to the two-wheeler seat. Seats, as cleared from two wheeler manufacturers, by themselves are quite sturdy and designed to weather all conditions, convenient to sit upon and by themselves are aesthetically designed. Hence use of seat covers is an option with two-wheeler owners to further add another layer of protection, convenience and beauty to the seats if they so desire. 6.6. The seat covers are generally not manufactured or cleared by the O.E. manufacturer of motorcycle seats when the supply is made by them to the motorcycle manufacturer. Instead it is the dealers of motorcycles that sell the seat covers separately, on optional basis, to the purchasers of motorcycles. Sometimes, even dealers of motorcycle do not sell it along with the new motorcycle and the customer has to buy it from a local shop elsewhere as per his choice of colour, texture etc. It is pertinent to note here that when the appellant was requested to explain the nature of customers to whom they sell the seat covers, during the personal hearing on 23.01.2024, they stated that they supply the same to the two-whe....
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....ation of accessories of product falling under CTH 8711. 6.11. We find that CTH 8714 refers to 'Parts and Accessories of vehicles of headings 8711 to 8713'; of which 8711 covers two wheelers including motorcycles and scooters. Within the framework that both motorcycles and scooters fall under CTH 8711, the relevant entries for their accessories (i.e., seat covers) are reproduced hereunder Chapter/ Heading/ Tariff Item Description of Goods 8714 Parts and accessories of vehicles of headings 8711 to 8713 8714 10 - Of motorcycles (including mopeds) 8714 1010 --- Saddles 8714 1090 --- Other From the above it is clear that parts and accessories of vehicles of heading 8711, get covered under 8714 10. Since Scooters also fall specifically under CTH 8711, the same also applies to seat covers of scooters too. So, parts and accessories, other than 'Saddles', of both motorcycles and scooters get covered under 8714 10 90. The product link between the main machine, i.e., motorcycle and scooters (both of which fall under CTH 8711), and their parts and accessories i.e., 'two wheeler seat cover for motorcycles and scooters', is as follows 8711 Motorcycles....