TaxTMI 
TaxTMI 
2025 (2) TMI 691
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....manufacture the aforesaid parts, the appellant imported various components from Thailand and classified the same under Customs Tariff Heading 8708 99 00 under the category 'others'. The product whose classification has been called in question is "Cap-Sub-Assy Fr Door Outside Handle". While clearing the goods, the appellant availed the benefit of the concessional rate of 5% basic Customs duty, as per under Notification No. 46/2011 Customs dated 1 June 2011 [as amended by Notification No. 82/2018 Customs dated 31 December 2018] for specified products from Thailand. Notification No. 46/2011 covered products falling under Customs Tariff Heading 8708 99 00. On scrutiny of imports made by the appellant, the Department noticed that they were importing parts and accessories of bodies of automotive vehicles like Cap Sub-Assy Fr Door Outside Handle 423205-11480-Coh (Parts for Automobile) by classifying the same under CTH 87089900. On completion of investigation, show cause notice dated 12.03.2021 was issued to the appellant. Vide the impugned order, the Commissioner confirmed the differential duty of Rs. 1,33,82,357/- along with interest under Section 28AA of the Customs Act, 1962. A....
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....437 (Tri.-Bang)] 3.2 The learned counsel contended that of the impugned order relied on Rule 2(a) of General Rules of Interpretation to observe that an unfinished or incomplete article are to be classified as finished goods, if it has incomplete or unfinished article has the characteristics of the finished goods. He further submitted that Rule 2(a) relates only when the incomplete or unfinished article possesses the characteristics of the finished goods. However, he submitted that the product did not have any characteristic of a door handle. Post its importation, a plastic base material is inserted through its circumference and subsequently, a door handle cames into existence. It is not the case that the said product could perform the function of the door handle on a standalone basis. It is only when the product is moulded in a specific manner and under controlled circumstances, does a door handle come into existence. In support of his submissions, ld. Counsel relied upon the following decisions:- • Sony India Ltd. v Commissioner of Customs, New Delhi [2002 (143) ELT 411 (Tri-LB)] • Commissioner of Customs, New Delhi vs. Sony India Limited [2008 (321) E....
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....f his submissions, ld counsel relied upon the following decisions:- • Commissioner of Central Excise, Bangalore vs. San Transmissions [1999 (107) ELT 482 (Tri.-Bang.)] • Commissioner of Central Excise, Delhi-III vs. Uni Products India Ltd. [2020 (372) ELT 465 (SC)] In view of above submission, the ld. Counsel submitted that principal usage of the product is qua the door handle and since there is no specific entry for door handle, the same merits classification under Customs Tariff Heading 8708 99 00. Therefore, going by the rationale of the impugned order itself, the product ought to have been classified under Customs Tariff Heading 8708 99 00 by virtue of Section Note 3 and Note B to HSN Explanatory Notes. 3.5 The ld. Counsel also submitted that Customs Tariff Heading 8708 covers 'Parts and Accessories of the Motor Vehicles of Headings 8701 to 8705'. The sub-classifications envisaged thereunder has to be interpreted keeping in mind the Customs Tariff Heading, i.e., 8708 even in terms of Note 1 of General Explanatory Notes, the entries carrying single dash are to be treated equally and same refers to a sub-set of the heading, which in the pre....
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....ommissioner of Central Excise, Bangalore v Pearl Insulation Ltd [2012 (281) ELT 192 (Kar)] 4. Learned Authorized Representative for the Department while reiterating the findings in the impugned order, submitted that there is no doubt that the imported goods i.e. Cap FR door outside handle, Cap RR door outside handle or handle door outside were designed for specific purpose and the same has been admitted by the importer as well. Therefore, Section Note 3 of Section XVII applies here which states that:-Reference in Chapters 86 to 88 to 'parts' or 'accessories' do not apply to parts of 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 or accessory. Therefore, the correct CTH will remain as 8708 which is supported by HSN Explanatory Note B of section XVII. 4.1 Learned AR submitted that as per Rule 2(a) of General Rules of Interpretation that any reference in a heading to an article shall be taken to include a reference to tha....
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....'t change the principal use. As per rule 2(a) of GIR, the incomplete/ unfinished door handles has the essential character of the complete or finished door handles, therefore, the same can be considered as 'finished door handle' and accordingly should be classified under CTH 87082900. Since, the imported goods are for specific use, therefore, considering Rule 3(a) of the GIR, the goods are classifiable under СТН 87082900. Further, CTH 870899 as others cover those parts which are (a) not parts of bumpers (CTH 8708.10), (b) not parts of bodies (CTH 8708.20), not parts of brakes (CTH 8708.30)........not parts of radiators, silencers, clutches, steering wheels, safety air bags (CTH 8708.91 to 8708.95). As the imported goods are specifically covered under CTH 8708.20 as parts of bodies, these are not to be covered under CTH 8708.99. The entry 8708.99 is a residual entry and covers goods not covered in previous entries of CTH 8708. It is very clear that that the imported item is a special purpose item and it cannot be treated as parts of general use and accordingly its classification should be decided. In the light of above submissions, ld. AR prayed that the....
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....nder Section 28 of the Customs Act specifically provides for raising any issue in respect of duty not paid/short paid/short levy. The decision of the Hon'ble Supreme Court has to be interpreted in the context of self assessment. Being a case of self assessment, the appellant cannot take the plea that ITC decision would apply in the facts of the case. Hence we are unable to appreciate the learned counsel's submissions. It has also been submitted before us that the imported product does not have the characteristics of a door handle. Post importation, plastic material is inserted through its circumference and subsequently the door handle comes into existence. Ld. Counsel also has submitted that the product has to be moulded in a specific manner and under controlled circumstances for it to emerge as a door handle. In this context we note that the product imported by the appellant are door handles that are to be attached to the motor car door. The said door handles are attached using a plastic piece around its circumference. Rule 2(a) of the General Rules for Interpretation states that any reference in a subheading to an article shall be taken to include a reference that article as pres....
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..... It has to be ascertained as to how the goods in question are referred to in the market by those who deal with them. In the instant case, the imported goods are door handles for the front door, rear door and in commercially identifiable as such, forming part of the body of the car. 9. At this point, we take note of the Hon'ble Supreme Court in its judgment in M/s Thermax Ltd Vs Commissioner of Central Excise, Pune [2022 (382) E.L.T. 442 (S.C.)] has highlighted the persuasive value of the HSN and held as follows:- "6. The definition of a product given in the HSN should be given due weightage in the classification of a product for the purpose of levying excise duty. This is because in the Statement of Objects and Reasons of the Bill leading to enactment of Central Excise Tariff Act, 1985, it was clearly stated that the pattern of tariff classification is broadly based on the system of classification derived from the International Convention on the Harmonised Commodity Description and Coding System (Harmonised System) with such contraction or modification thereto as are necessary, to fall within the scope of the levy of Central Excise duty. The tariff so suggested for the....
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.... far as possible, be resolved with reference to the nomenclature indicated by the HSN unless there be an express different intention indicated by the Central Excise Tariff Act, 1985 itself. The definition of a term in the ISI Glossary, which has a different purpose, cannot, in case of a conflict, override the clear indication of the meaning of an identical expression in the same context in the HSN. In the HSN, block board is included within the meaning of the expression "similar laminated wood" in the same context of classification of block board. Since the Central Excise Tariff Act, 1985 is enacted on the basis and pattern of the HSN, the same expression used in the Act must, as far as practicable, be construed to have the meaning which is expressly given to it in the HSN when there is no indication in the Indian tariff of a different intention." 7. Commenting on the importance of taking guidance from HSN Classification and how a taxing statute should be construed in consonance with their commonly accepted meanings in the trade and popular sense, Justice Sanjiv Khanna in D.L. Steels (supra) also so correctly observed as follows :- "9. The Harmonised System of Nom....
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....ted for the purpose of classification in the popular sense, which is the sense attributed to it by those people who are conversant with the subject matter that the statute is dealing with. This principle should commend to the authorities as it is a good fiscal policy not to put people in doubt or quandary about their tax liability. The common parlance test is an extension of the general principle of interpretation of statutes for deciphering the mind of the law-maker. However, the above rule is subject to certain exceptions, for example, when there is an artificial definition or special meaning attached to the word in a statute, then the ordinary sense approach would not be applicable." 10. It is important to note here that in the aforesaid judgment, the Supreme Court has reiterated the view that the HSN code is the bedrock of custom controls and procedures. It has also been held that as per the HSN, classification is done by placing the goods under the most apt and fitting sub-heading. In this context, we also note that the Supreme Court in the judgement in Commissioner of Central Excise, Delhi vs. Uni Products Limited [2020-TIOL-91-SC-CX] had laid some guidelines for classific....
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....ered as 'finished door handle' and accordingly is liable to be classified under CTH 87082900. Since, the imported goods are for specific use, therefore, considering Rule 3(a) of the GIR, the goods are classifiable under CTH 87082900. 13. It has been submitted by the learned Authorized Representative that CTH 87089900 others' cover those parts which are (a) not parts of bumpers (CTH 8708.10), (b) not parts of bodies (CTH 8708.20), not parts of brakes (CTH 8708.30).....not parts of radiators, silencers, clutches, steering wheels, safety air bags (CTH 8708.91 to 8708.95). As the imported goods are specifically covered under CTH 8708.20 as parts of bodies, these are not to be covered under CTH 8708.99. We are in agreement CTH 87089900 refers to "other parts and accessories of motor vehicles" which includes any miscellaneous parts or accessories for vehicles that are not specifically classified under other headings within Chapter 87, like small hardware components, non-standard vehicle parts, or specialized accessories not commonly listed elsewhere; essentially, any vehicle part not falling under the other 8701 to 8705 categories that are considered "parts and accessories of ....
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....ows: "...there is no one single universal test in these matters. The several decided cases drive home this truth quite eloquently. It is for this reason probably that the common parlance test or commercial usage test, as it is called, is treated as the more appropriate test, though not the only one. There may be cases, particularly in the case of new products, where this test may not be appropriate. In such cases, other tests like the test of predominance, either by weight of value or on some other basis may have to be applied. It is indeed not possible, nor desirable, to lay down any hard and fast rules of universal application." Therefore, the respondents ought not to have overlooked the 'predominant use' or 'sole/principal use test acknowledged by the General Rules for the Interpretation of the Schedule." 15. Similarly, in the case of Cast Metal Industries (P) Ltd. vs. Commissioner of Central Excise-IV, Kolkata [2015 (325) E.L.T. 471(S.C.)], the Apex Court held as follows:- "5. On the face of it, this note would not be applicable as it is HSN Note which has diversion with the relevant entry and as the very first line thereof mentions tha....