AI Drafter 
TaxTMI 
TaxTMI 
2025 (2) TMI 380
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....airline operator engaged in the business of transportation of passengers and goods by air from various places in India and outside India. To carry out scheduled operations in India, the appellant imports aircrafts and their parts. The appellant also imports aircraft engines with engine stands, when required for repair, maintenance or otherwise. 3. The dispute pertains to classification of such aircraft engine stands imported with engines by the appellant during the period from April, 2018 to March, 2019. 4. During the relevant period, the appellant imported engine stands under CTI 7310 29 10/ 7310 29 90 on payment of basic customs duty @ 10% and IGST @ 18%/ 12%. The classification adopted by the appellant was for the first time objected to by the department in November 2018 for the import made by a Bill of Entry dated 19.11.2018. According to the department, the classification of aircraft engine stands should have been under CTI 8716 39 00, which covers trailers / semi-trailers. 5. The appellant objected to such re-classification by a protest letter dated 10.12.2018, but the appellant claims that due to commercial reasons it had to clear the consignment as per the classifi....
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....f Item Description goods Unit Rate of Duty Standard Preferential Areas (1) (2) (3) (4) (5) 8716 Trailers and semi-trailers; other vehicles, not mechanically propelled; parts thereof 8716 10 00 - Trailers and semi-trailers of the caravan type, for housing or camping u 10% - 8716 20 00 - Self-loading or self-unloading trailers and semi-trailers for agricultural purposes u 10% - - Other trailers and semi-trailers for the transport of goods: 8716 31 00 -- Tanker trailers and tanker semi-trailers u 10% - 8716 39 00 -- Other u 10% - 8. A show cause notice dated 13.06.2019 was issued to the appellant and paragraphs 4 and 5 of the show cause notice are reproduced: "4. However, an engine stand is a tool commonly used to repair large heavy gasoline or diesel engines. It uses a heavy cantilevered support structure to hold the engine in midair so that the mechanic has access to any exposed surface of the engine. Engine stands are typically mounted on large casters so that an engine c....
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....y shock or jerk on the aircraft engine during its transportation. The engine stand comes with various miscellaneous parts like hooks, rings, etc. to safely tie and fit the engine stand on to the truck/aircraft / vessel floor for safety during its transportation. The engine is kept on the engine stand even while it is getting repaired in the repair shop or while installation / removal from the aircraft. The engine stand allows limited mobility within the repair workshop and for adjustment of direction for easy access to all sides of the engine. The images are given above already and detailed explanation of the functioning of the engine stand is also given above in the facts. B.6 It is humbly submitted that the essential character of aircraft engine stands is given by the cradle holder which is used to accurately grip and secure the engine and not by the caster wheels. It may be noted that the aircraft engine stands are principally used as a safety guard for the engine. The reasons are given below: (i) The impugned engine stands are essential and mandatory for safely transporting engines either by truck, sea or air. In fact, engine stands are always prescribed by th....
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....nd, being composite machine, has to be classified on the basis of the component that gives essential character to the engine stand, i.e. cradle (container)." (emphasis supplied) 10. The Principal Commissioner, however, did not accept the contentions raised by the appellant and confirmed the differential amount of customs duty, by the order dated 30.01.2020, holding that aircraft engine stand is not a container. The relevant portions of the order are reproduced below: "10.10 Thus, I find that the Explanatory Notes to CTH 8609, specifically covers only different types of containers, which may be open, closed, specially designed for fluids, cubical or cylindrical and usually vary in size from 4 to 45m3 capacity. Here, it is important to note that this chapter does not cover any casters, or mechanically propelled/ non- mechanically propelled vehicles or sledges/special sleds running on timber trackways that may be joined with another vehicle for transportation from one place to another placed for safe movement. 10.11 Thus, from the above, I am of the view that the main feature of the impugned item is to move the aircraft engine from one place to another pl....
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....t engine. I am of the view that safe transportation of the aircraft engine with the impugned item 'engine stand' is not possible without wheel. The impugned item 'engine stand' is used for transportation of aircraft engine on wheels for safety purpose. Wheels are essential part of impugned item for safe transportation and the same is not the specific description covered under CTH 8609. In view of the above, I do not agree with the importer's contention that the presence of castor wheels does not give essential character to the engine stand and its function is ancillary to the main function of securely holding and protecting the engine during transportation. ***** 10.21 I am of the view that the transportation/ movement with or without wheels is the essential characteristics of goods of CTH 8716 and simultaneous reading of HSN Explanatory Notes for CTH 8716 with the GI Rules as well as essential characteristics of item, I am of the view that the goods are appropriately covered under CTH 8716." (emphasis supplied) 12. The Principal Commissioner ultimately, by the order dated 30.01.2020, held that as the appellant had misclassified the importe....
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....d the impugned order and made the following submissions: (i) The order passed by the Principal Commissioner is a detailed order and takes into consideration all the aspects pointed out by the appellant; (ii) The appellant is not justified in contending that the aircraft engine stands deserve classification under CTI 8609 00 00; (iii) On the other, an aircraft engine stand deserves classification under CTI 8716 39 00; and (iv) The Principal Commissioner was justified in demanding interest under section 28AA of the Customs Act. 16. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered. 17. The issue that arises for consideration in this appeal is regarding classification of aircraft engine stands. For this purpose, it would be useful to first consider the description of aircraft engine stands. 18. According to the appellant, aircraft engine stands are made of welded steel frames and are fabricated from structural-steel shapes. It comes with attachment parts such as structural bolt, which are made of high strength corrosion resistant, SAE....
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....gine stand is to protect and secure the aircraft engine from damage during transportation. The aircraft engine stand is a specialized designed stand to enable it to absorb shock loads, if any, during transportation. The aircraft engine stand is supplied by Pratt and Whitney and it is specifically mandated by them that engine should be transported only on engine stand to maintain safety and avoid any damage during the transit. 22. It would, therefore, be seen that an engine stand is specially designed for safely transporting the aircraft engine by different modes of transport i.e., by land, air and sea. The engine stand comprises of a cradle (holder), a base and four caster wheels. The cradle holds the engine safely and prevents impact of any shock or jerk to the aircraft engine during transportation. An engine is kept on engine stand even while it is getting repaired in the repair shop or during installation/removal from the aircraft. An engine stand allows limited mobility within the repair workshop for adjustment of direction for easy access to all sides of the engine. It is, therefore, moved along with the engine right from its loading on to a truck, vessel or aircraft till t....
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....ssential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration." 24. It would be seen from a perusal of rule 3(b) of the GI Rules that the appropriate heading/ sub-heading of an aircraft engine stand would have to be determined on the basis of the component that gives the essential character to aircraft engine stand. 25. The description of an aircraft engine stand reveals that the essential character of an aircraft engine stand is given by the cradle/holder which is used to accurately curb and secure the engine and not by the caster wheels. This is apparent from the fact that an aircraft engine stand is essential and mandatory for safely transporting the engines by road, sea or air. In fact, engine manufacturers mandate that engine stands should be used for safe transportation of engines. The shape of the cradle is specific to the engine and designed to provide grip to the engine so that the engine does not move during transportation. Engine stand also contain a shock attenuation sy....
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....acles specially designed and equipped for carriage by one or more modes of transport (e.g., road, rail, water or air). They are equipped with fittings (hooks, rings, casters, supports etc.) to facilitate handling and securing on transporting vehicles, aircraft or vehicle. 29. The dictionary meaning of the word "container" can now be considered. (i) New Webster's Dictionary- "that which contains; a vessel, receptacle, carton, caste or other enclosing structure" (ii) The Chamber's Dictionary- "something that contains goods, etc. for storage; a large box-like receptacle of standard shape and size in which goods are enclosed for transport on a lorry, train or ship" (iii) Oxford Dictionary of English (3rd Ed.)- "an object for holding or transporting something" 30. In G. Claridge & Company Ltd. Vs. Collector of Central Excise [1991 (52) E.L.T. 341 (S.C.)], the Supreme Court considered the meaning of the term "container" and the relevant portion of the judgment is reproduced below: "9. The above definitions would show that the expression 'container' is used in three different senses: in a broad sense, it means a receptacle which contains; in a nar....
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....m "container" was preceded by the type of containers like boxes, cartons and cases, which are all closed containers. 32. In the present case, CTH 8609 does not use the term 'boxes' or 'cartons'. In fact, in terms of HSN Explanatory Notes to CTH 8609, all packing receptacles specially designed and equipped for carriage by one or more modes of transport are covered under this Heading. HSN Explanatory Notes to CTH 8609 also give various examples of containers that can get covered within the Heading. One example at paragraph (4) is also of an open container. Thus, so far as CTH 8609 is concerned, there is no good reason to apply the narrow meaning of the term "container" as against the broad meaning as discussed by the Supreme Court in G. Claridge & Company Ltd. 33. Thus, a product would merit classification under CTH 8609 if it fulfills the following conditions: (i) It must be a container, which can be of any type, including an open container. (ii) It must be a packing receptacle that is specially designed and equipped for carriage by one or more modes of transport i.e. road, rail, water or air. (iii) It must be equipped with fittings (hooks, rings, ca....