TaxTMI 
TaxTMI 
2025 (6) TMI 578
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....ied under tariff heading 84213990 whether it merits classification under tariff heading 8708 of the Indian Customs Tariff (as applicable to GST Law)? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 01. FACTS AND CONTENTION - AS PER THE APPLICANT 1.1. The applicant is a part of Cummins India Group. The Applicant is engaged in manufacture and sale of products and provide services relating to turbo engine technologies, emission solutions, fuel systems etc. 1.2. The Applicant's business encompasses eight divisions viz. Cummins Turbo Technologies, Cummins Emission Solutions ('CES'), Cummins Business Services, Cummins Fuel Systems India, Cummins Technical Centre India, Phaltan Engine Plant, Global Analytics Centre and Supply Chain Operations ('SCO'). 1.3. The CES division is eng....
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....Particulate Filter ('DPF') - DPF collects particulate matter (Soot and Ash) from engine, Soot can be combustible by chemical and thermal means and that of Ash is non-combustible. iii. Selective Catalytic Reduction Catalyst ('SCR Catalyst') - SCR catalyst converts nitrogen oxide into nitrogen, water, tiny amounts of CO2 through chemical reactions iv. Ammonia Slip Catalyst ('ASC') - ASC catalyst converts Non-utilized NH3/Urea from SCR catalyst v. Mixer - The primary function of the mixer is to mix Urea with the exhaust gases thoroughly in the specified quantity by creating turbulence. vi. Dozing unit - Dozing unit is used to inject the Diesel Exhaust Fluid ('re-agents') in the pre-defined quantity and at a pre-defined time according to the temperature in the EGP as instructed by the Electronic Control Unit ('ECU') vii Sensors-Various sensors are used to monitor the temperature/pressure of gases in the ATS/ EGP. Sensors send appropriate signals to the ECU to determine the quantity of reagents to be pumped in the dozing unit. c. DEF lines comprise a set or kit of tubes, connectors, couplings, and nuts and bolts for transporting the re-agents from the tank to the dozing unit....
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....ne 2017, amended from time to time, inter alia specifies different CGST rates (for equivalent SGST rates Notifications are issued by States) for the goods, under different schedules. Similarly, Notification No. 1/2017-Integrated Tax (Rate), dated 28th June 2017 prescribes the IGST rates for goods. 1.10. Classification for purposes of GST Law, reverts to the Customs Tariff - refer explanation (iii) to the Notification 1/2017-Central Tax (Rate), dated 28th June 2017. For the purposes of classification of ATS, reproduced here are relevant entries of the Customs Tariff Act, 1975 under which filtering or purifying machinery and apparatus supplied to the automobile OEM is classifiable: Chapter heading under the Customs Tariff Act Description of goods GST rate (cumulative) 8421 Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases 18% 8708 Parts and accessories of the motor vehicles of headings 8701 to 8705 [other than specified parts of tractors] 28% 1.11. As the Applicant will be making supplies of ATS in a new regulatory regime (under the revised norms of Bharat Stage and the GST Law), and after considering the posi....
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....he motor vehicles of headings 8701 to 8705) under Section XVII of the First Schedule to the Customs Tariff. The following paragraphs reproduce the relevant extracts of the notification issued under GST Law, followed by the interpretation of the Applicant of this material, so as to determine the classification of the Subject Goods. 2.3. Notification No. 1/2017 Central tax (Rate) dated 28 June 2017 (hereinafter referred to as 'Notification 1/2017'), in Schedule I to VI specifies goods, which shall be levied to tax at the rate of 2.5%, 6%, 9%, 14%, 1.5% and 0.125% respectively. Explanation to Notification 1/2017 provides: "Explanation. - For the purposes of this notification, - (i) ......... .. (ii) . .... (iii) "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a tariff item, sub-heading, heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this n....
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....planatory notes to the HSN. These have been reproduced and analysed in the ensuing paragraphs, along with relevant judicial precedents on issue. 2.7. The Applicant first submits that ATS being a purifying and filtering equipment Section XVI and Chapter heading 8421 are relevant. Section XVI of the Customs Tariff covers 'Machinery and mechanical appliances; electrical equipment; parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles', and, Chapter heading 8421 covers 'Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases' 2.8. The relevant explanatory notes to the HSN for Chapter heading 8421 are reproduced below: "Part II - Filtering or purifying machinery and apparatus, for liquids and gases Much of the filtration or purification plant of this heading is purely static equipment with no moving parts. The heading covers filters and purifiers of all types (physical or mechanical, chemical, magnetic, electro-magnetic, electrostatic etc.). The heading covers not only large industrial plants but also filers for internal combustion engine....
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.... (a) of the Rules of Interpretation of Customs Tariff - that goods shall be classified under heading which provides the most specific description rather than under heading which provides general description - it can be said that the Subject Goods should not be classified under tariff heading 8708 (covering parts and accessories of the motor vehicles of headings 8701 to 8705). In support, the Applicant places reliance on the following judgements: a. Speedway Rubber Company vs. Commissioner of Central Excise [2002 (143) E.L.T. 8 (S.C.)] b. Pioneer Industries vs. Commissioner of Central Excise and Service Tax [2017 (6) G.S.T.L. 491 (Tri. - Ahmedabad)] c. Aarti Drugs Limited vs. Commissioner of Central Excise [2015 (324) E.L.T. 594 (Tri. - Mumbai)] 2.11. Section XVII of the Customs Tariff covers 'Vehicles, aircraft, vessels and associated transport equipment'. Chapter 87 of the Customs tariff (forming part of Section XVII) covers 'Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof' and Chapter heading 8708 of Customs Tariff covers 'Parts and accessories of the motor vehicles of headings 8701 to 8705'. The Section Notes (2 and 3) are reproduce....
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.... not excluded by virtue of Section Note 2 that the tests as to usage 'solely' or 'principally' as provided for in Section Note 3 can be applied to a given case. This approach to classification has been explained in the advance ruling by this Hon'ble Authority in re. Parker Hannifin India Private Limited, Order No. KAR/AAAR/07/2019-20 dated 10 January 2020. 2.13. We turn to the HSN and reproduced here are the explanatory notes to HSN (Section XVII), which will elucidate the scope and ambit of Section XVII of the Customs Tariff: "(III) PARTS AND ACCESSORIES It should be noted that Chapter 89 makes no provision for parts (other than hulls) or accessories of ships, boats or floating structures. Such parts and accessories, even if identifiable as being for ships, etc., are therefore classified in other Chapters in their respective headings. The other Chapters of this Section each provide for the classification of parts and accessories of the vehicles, aircraft or equipment concerned. It should, however, be noted that these headings apply only to those parts or accessories which comply with all three of the following conditions: (a) They must not be excluded by the terms of Not....
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....t Goods are thus required to be manufactured according to the specifications / design provided by the OEM, although from a purely functionality aspect a typical ATS could be remodeled, redesigned and re-engineered to be deployed elsewhere than the internal combustion engine of motor vehicle it was intended for. The function of the Subject Goods is filtering and purify the harmful gases emitted during combustion of fuel in a motor vehicle's engine and this is certified by a chartered engineer's certificate enclosed with this application. Accordingly, an ATS as an apparatus may be used in any engine (for example generator engine) with suitable alterations and modifications. At this stage, it may be important to consider meaning of terms 'solely' and 'principally'. The dictionary meaning of these terms is reproduced here: - 'Solely': 'to the exclusion of all else' - 'Principally': 'for the most part; chiefly; mainly' It therefore emerges that in order for a product to be covered in Section XVII the same must be capable of use only with articles of Chapters 86 to 88. However, as mentioned earlier ATS as an apparatus may be used in articles other than those covered in Chapter 86 to....
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....specific Chapter Heading as per (7) (a), (k) which excludes photographs and other current collectors for electric traction vehicles, fuses, switches and other electric apparatus of Heading No. 85.35 or 85.36. The items, therefore, manufactured by the appellants are identifiable or are in the nature of goods falling under Chapter Heading 85.36. Since these falls under the category of excluded goods under Chapter Notes, even though they are used specifically solely or principally with the armoured vehicles of Chapter Heading 8710, they are classifiable under Chapter Heading 8536.90 only as held by the adjudicating authority." 2.18. The Applicant refers to the decision in CCE vs. Cummins India Limited [2003 (156) E.L.T 98 (Tri. - Mumbai)] wherein, fuel filters were classified under Chapter heading 8421 and not under Chapter heading 8708 by application of Note 2(e) of Section XVII of the Customs Tariff. The relevant extract is reproduced for ease of reference: "3. We do not find it possible to accept the classification put forth by the department. Heading 84.09 is for parts suitable for use solely or principally with the engines of Heading 84.07 or Heading 84.08 (Spark-ignition inte....
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....riff line items in the GST law since it is borrowed from rather based on the Customs law, the indubitable conclusion is that the Subject Goods are appropriately classifiable under tariff heading 8421 of the Indian Customs Tariff and GST notifications. Noticeably, in each of the referred judgements the issue at hand was whether the goods in question were to be classified under a specific tariff hearing or with reference to tariff heading falling within ambit of Section XVII, more particularly Chapter 87 (vehicles). 2.21. The Applicant, in support of its interpretation and view refers to the advance ruling by the Karnataka State Appellate Authority of Advance Ruling in re. Parker Hannifin India Private Limited [Order No. KAR/AAAR/07/ 2019-20], wherein it was concluded that notes to Section XVII specifically carve out an exclusion for goods covered under Chapter Heading 8401 to 8479 and "filters" would fall for classification under Chapter Heading 8421. The relevant extract is as follows "11. The Appellant has argued that Note 2(e) to Section XVII is generic in nature and primacy should be given to Section Note 3 to Section XVII which determines the classification based on sole and....
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....at Note 2 contradicts the specific test of 'sole and principal use' laid down by Note 3 and hence Note 3 is to be given primacy over Note 2 in not a correct interpretation. There is no contradiction between Section Notes 2 and 3 to Section XVII. The test laid down in Note 3 is to be applied only after it is ensured that the article is not excluded by virtue of Note 2. Section Notes 2 and 3 are to be read harmoniously in sequential order. Section Note 3 cannot be rend in isolation or accorded primacy as contended by the Appellant." 2.22. Similarly, in re. Hyva India Private Limited [2019 (27) G.S.T.L. 85 (A.A.R.-GST)], this Hon'ble Authority held that the hydraulic kits are appropriately classifiable as 'other engines and motors' under Chapter Heading 8412 even if supplied to be fitted to tippers and dumpers classifiable under Chapter 87. The relevant extract of the advance ruling, is reproduced below: "From the submissions made by the applicant we find that, in the case of sale of Hydraulic Kits to OEMs, we agree with their submissions that their product falls under Chapter Heading 8412 of the Customs Tariff under the description "Other Engines and Motors" in view of the Explana....
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....8, 8714 and 8716 and Section Note 4 to Section XVI and Exclusion Note 2 to Section XVII." Conclusions 2.23. The Subject Goods are designed for and meant for filtering and purifying the harmful gases emitted as a result of combustion of fuel in the engine into harmless gases which conform with the emission regulation requirement and supplied accordingly. 2.24. In view of the above facts and provisions, Applicant submits that the Subject Goods are excluded from and so cannot be classified under Section XVII of the Customs Tariff (as is relevant for GST regime), especially due to Note 2(e) read with Note 3 to Section XVII of the Customs Tariff. 2.25. The Applicant also submits that for any goods to be classified under Chapters 86 to 88 all three conditions stated as at paragraph 14 (a), (b) and (c) above must be satisfied, however since ATS does not meet these conditions, it cannot merit classification under tariff heading 8708. 2.26. Hence, the Applicant submits that ATS are appropriately classifiable under tariff heading 8421 of the Indian Customs Tariff and consequently serial no. 322 of Schedule III of Notification No. 1/2017-Central Tax (Rate). 2.27. In view of the describe....
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....ing or purifying equipment for gases, it falls for classification under tariff heading 8421 (Chapter heading 8421 covers 'Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or Effective from January 2022, ATS falls for gases') of the Customs Tariff. classification under tariff item 84213200, which has the description as "catalytic converters or particulate filters, whether or not combined, for purifying or filtering exhaust gases from intern combustion engines". On the other hand, since ATS finds application in the exhaust system of the motor vehicles, it may be classified under the customs tariff heading 8708 of the Customs Tariff, which covers 'parts of motor vehicles of heading 8701 to 87051. Previously, the Company classified ATS under tariff heading 8708 however, owing to these competing entries and resultant ambiguity as to the appropriate classification of ATS, the application was filed with the following questions: (i) Whether ATS (exhaust after-treatment system) also known as EGP (exhaust gas processor), which is a purifying and filtering apparatus / equipment is classifiable under tariff heading 84213990 of the Customs....
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....taches as Exhibit 2 to this synopsis, the HSN Explanatory Notes, which it is well settled' are to be considered, followed and applied in matters of classification under the Customs Tariff of India. Amendments in Custom Tariff effective from January 01, 2022 2.39. Several changes were brought into Customs Tariff, in order to align the same with new (seventh) edition of the Harmonized System Nomenclature (i.e. HS 2022). As a part of these amendments, a number of specific entries were incorporated in the tariff to cover goods which were otherwise being classified under residual entries. 2.40. Relevantly, amendments have been made in chapter heading 8421, wherein a specific tariff item 84213200 has been incorporated to cover 'Catalytic converters or particulate filters, whether or not combined, for purifying or filtering exhaust gases from internal combustion engines. Relevant extracts of the Customs Tariff before and after the aforesaid changes are enclosed as Exhibit 3. ATS being a filter for purifying gases (resulting) from internal combustion engines squarely answers to the description in customs tariff item 84213200. 2.41 The Applicant refers to the CBIC's guidance note which p....
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....y with the goods of Section XVII. It should be noticed that the construct of the Section Notes is such that in order to apply Section Note 3 to any goods, it is essential that the goods should not be excluded from Section Note 2 of Section XVII, and so only after it is ensured that a given part is not excluded by virtue of Section Note 2 that the tests as to usage 'solely' or 'principally' as provided for in Section Note 3 can be applied. In para. 5 of the Apex Court's decision in Intel Design Systems (India) Pvt. Ltd. vs. CC&CE. [2008 (223) E.L.T. 135 (S.C.)], in the context of classification of electrical machinery and equipment for use in tanks and other armoured and motorised fighting vehicles it was held "As per the Explanatory Notes to HSN the parts falling under Chapter Heading 8710 would be covered under the said chapter, provided they fulfil both the conditions i.e. they must be identifiable as being suitable for use solely or principally for such vehicles and that they must not be excluded by the provisions of Notes to Section XVII.". This approach to classification has been explained and endorsed in the GST advance ruling in Parker Hannifin India Private Limited, Order N....
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....) in the Explanatory Notes to HSN is that 'goods should not be specifically included elsewhere in the nomenclature'. Here, the judgment of the Supreme Court in CCE Delhi vs. Uni Products Ltd. [2020 (372) E.L.T. 465 (S.C.)] is instructive, since it recognised and endorsed the three-layer test - refer para. 8 of the enclosed copy, marked as Exhibit 5. In present case, ATS are more specifically included in Chapter heading 8421 (in terms of Rule 3(a) of the General Rules of the interpretation of this Schedule) i.e., filtering and purifying machinery, etc. for gases, thus cannot be brought within the folds of Section XVII or Chapters thereunder upon application of this third test of the three-layer test. Instruction No. 01/2022-Customs dated January 5, 2022 and its impact of classification 2.50 Central Board of Indirect Taxes and Customs ("CBIC") issued the Instruction to address the difficulty in assessment of classification of automobile parts and components. This Instruction while noting the judgement in case of Westinghouse Saxby Farmer Ltd. vs. Commissioner of Central Excise, Kolkata [2021 (376) E.L.T. 14 (S.C.)] observed that: a. Classification of parts of goods of Section XVI....
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....ding which provides the most specific description rather than under heading which provides general description - it can be said that ATS should be classified under tariff heading 8421. In this behalf, judgments" supporting this position that the specific description must always be preferred over the general ones, reinforce the submission of the Applicant that ATS or EGP deserves to be classified under Customs Tariff Item 84213200, and none other. 2.54 In the light of the above points, it is summarized that the three-pronged test prescribed under Section Notes and HSN explanatory is not fulfilled by ATS, hence the same cannot be covered under Section XVII and thereby under Chapter 87. IV Specific rebuttals to the Assistant Commissioner's observations / comments. 2.55 The Applicant refers to the Assistant Commissioner's Comments from the letter dated June 21, 2022, enclosed as Exhibit 6, wherein the Assistant Commissioner has laid out his rationale and justification on why the subject goods should be classified under Chapter heading 8708. Specific submissions/ rebuttals to these comments are provided below: Comments of the Assistant Commissioner Applicant's Submissions and Rebut....
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....esign Systems (India) Pvt. Ltd. (SC, 2008) This ruling confirms the two-fold test: goods must be (1) suitable solely/principally for use in motor vehicles, and (2) not excluded by Section XVII Note 2. - This judgment supports the Applicant's position and not that of the GST Department. - The Court held that even if goods are suitable for exclusive use in vehicles, they cannot be classified under Chapter 87 if excluded by Note 2. The items in Intel (electrical switches, control boxes) fell under Chapter 85 and were thus excluded by Note 2(f) to Section XVII. - In the present case, ATS falls under Chapter 84 (heading 8421) and is therefore excluded from Section XVII due to operation of Note 2(e). The omission of this critical aspect in the comments, undermines the submission of the GST department. ATS is fitted to the exhaust system of motor vehicles and is required under BS VI hence norms, and should be considered part of motor vehicles. - Use in motor vehicles alone does not determine classification and overpower other principles and tests concerning classification. The comments view the subject of classification with an over-simplistic approach, which must be desisted from. ....
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....the Customs Tariff. Further, it applied the three-pronged test derived from the Notes to Section XVII read with HSN explanatory notes. The Customs Authority for Advance Ruling ("CAAR") held that since the TCU was an electrical apparatus falling under Chapter 85, it was excluded under Note 2(f) to Section XVII, and therefore could not be considered a part of a motor vehicle under Heading 8708. Instead, it was classified under heading 8517, being more specifically covered there. 2.58 This customs advance ruling reaffirms that: The exclusions under Section Note 2 are primary and determinative End-use or suitability for use (Note 3) is to be examined only after exclusion under Note 2 is ruled out; - A more specific classification elsewhere in the Tariff overrides residual or functional claims under Chapter 87. 2.59 Applicant submits that upon considering these tests and indeed the reasoning adopted in this customs advance ruling, ATS or EGP which is an equipment or apparatus for filtering and purifying exhaust gases falls for classification under heading 8421, more specifically tariff item 84213200 and upon application of Section Notes 2(e) and 3, cannot be classified under tariff....
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....nder tariff heading 8708 of the Indian Customs Tariff (as applicable to GST Law). 3.3 The matter was examined in light of various facts & judgments by the higher authorities in this regard. The departments comment/stand in this regard is as follows: - 3.3.1 We all know that motor vehicles are nothing but an amalgam of lakhs of parts, spares, components & accessories that are aesthetically engineered & interconnected in a manner to function in sync with each other. Now, it is very much possible that the various parts so assembled can either be the parts of general use or the parts of specific use but in all likeliness, the parts would always be so designed that It fits the use for a particular type, class, model & variant of the motor vehicle. 3.3.2 Now, in order to arrive at the appropriate classification of these items used in the motor vehicle, it is important to refer to the tariff classification as issued by the CBIC read with its Schedules and as guided by the Interpretative rules, Section Notes, Chapter Notes as supported by the explanatory notes to the HSN as issued by the World Customs Council, Brussels. 3.3.3 The basic principle provided in rule 1 is that classifica....
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.... as parts of motor vehicles and accordingly will merit classification under the Tariff Item 8708 9900 and not under 7318. In case of Intel Design Systems (India) Pvt. Ltd. vs Commr. Of Cus. & C. Ex. 2008-TIOL-18-SC-CX, the Hon'ble Supreme Court of India held that parts falling under CTH 87 would only be covered under CTH 87 provided they fulfil both the conditions (1) they must be identifiable as being suitable for use solely or principally for vehicles falling under Chapter 87 and (2) they must not be excluded by the provisions of Section Note XVII. 3.4. In the present case, the ATS is an equipment used for filtering and purifying the harmful gases emitted as a result of combustion of fuel in the engine of the motor vehicle into harmless gases which conform with the emission regulation of Bharat Stage Emission Standards in India. The ATS is actually the assembly comprising of various components viz., Diesel Oxidised Catalyst, Diesel Particulate Filter, Mixer, Dozing Unit, Sensors, Ammonia Slip Catalyst etc. This ATS/EGP is supplied by the applicant to various Original Equipment manufacturers in Automobiles Industry and then this ATS/EGP is integrated into and fitted to the exhaus....
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.... purifying the harmful gases emitted as a result of combustion of fuel in the engine into harmless gases which conform with the emission regulation requirement. The ATS converts carbon monoxide (CO) into carbon dioxide (Co2), nitrogen Oxides (Nox) into Nitrogen(N2), Water (H2O) and carbons into CO2 and traps the residual carbon in the filter. The ATS is an assembly comprising of the following components :- i. Diesel Oxidized Catalyst ('DOC') - DOC reduces the particulate matter, carbon monoxide and hydrocarbons through the process of oxidation. ii. Diesel Particulate Filter ('DPF') - DPF collects particulate matter (Soot and Ash) from engine, Soot can be combustible by chemical and thermal means and that of Ash is non-combustible. iii. Selective Catalytic Reduction Catalyst ('SCR Catalyst') - SCR catalyst converts nitrogen oxide into nitrogen, water, tiny amounts of CO2 through chemical reactions iv. Ammonia Slip Catalyst ('ASC') - ASC catalyst converts Non-utilized NH3/Urea from SCR catalyst v. Mixer - The primary function of the mixer is to mix Urea with the exhaust gases thoroughly in the specified quantity by creating turbulence. vi. Dozing unit - Dozing unit is use....
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....luding catalytic converters which change carbon monoxide in the exhaust gases of motor vehicles). We also agree that the Customs Tariff has been aligned with the Harmonized system of nomenclature (HSN) provided by the World Customs Organization and that the HSN elucidating the scope of a particular chapter would have persuasive value in determination of scope of headings of corresponding chapter of Customs Tariff as per the law declared by the Hon'ble Supreme Court in the following judgements. a. Camlin Limited vs. CCE [2008 (230) E.L.T. 193 (S.C.)] b. Coen Bharat Limited vs. CCE [2007 (217) E.L.T. 165 (S.C.)] c. CCE vs. Bakelite Hylam Limited [1997 (91) E.L.T. 13 (S.C.)] 5.4. We find that for classification of any goods, due regard will have to be given to the Section Notes, the Chapter Notes and the wordings of the particular chapter headings. In order to classify any product as parts and accessories of motor vehicles, the provisions of Section XVII which covers 'Vehicles, Aircraft, vessels and associated transport equipments' will have to be taken into consideration. Further, Chapter notes to Chapter 87 which covers vehicles other than railway or tramway rolling stock an....
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.... of Chapters 86 to 88 [see paragraph (B) below] and (c) They must not be specifically included elsewhere in the Nomenclature [see paragraph (C)]." We find that in order to classify any goods as a part or accessory of a motor vehicle falling under chapter 8701 to 8705, the goods must pass the aforesaid three tests i.e. they should not be excluded by terms of Note 2 to Section XVII, they must be suitable for use solely or principally with the articles of Chapter 86 to 88 and they must not be specifically included elsewhere in the nomenclature. We find that this view has been elucidated by the Hon'ble Supreme Court in the case of Intel Design Systems (India) Pvt. Ltd Vs.CC and CE reported in 2008 (223) ELT 135 (SC) and a similar view has been followed by the judgements of the various AAR relied upon hereinabove by the applicant. In the light of the above, we proceed to classify the product i.e. After Treatment System supplied by the applicant to various OEM manufacturers. 5.5. We find that in order to classify the ATS supplied by the applicant to the OEM manufacturers as parts of motor vehicle under 8708, it has to pass the three-pronged tests as mentioned above. It is seen from t....
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....y when it is fitted with the exhaust system of the said motor vehicle. It cannot independently function as an ATS on any other type of internal combustion engine as it will not be able to carry out its function of purifying the exhaust fumes from such engines. What is recognized in Note 3 can be called the suitability for use test or the user test. The exclusion under Note 2(e) may be of goods which are capable of being marketed independently as ATS System. However, in the instant case, the goods which are being supplied by the applicant are nothing but tailor-made parts of motor vehicles which will function as an ATS system only if it is fitted with the particular motor vehicle for which it has been designed. They cannot, function independently of the motor vehicle. We further find that the goods covered under chapter 8421 are 'filtering or purifying machinery and apparatus for gases". In this regard a machinery or an apparatus are equipment needed for a particular activity or purpose. It means that the said apparatus or machinery should be able to perform the function for which it is used. In the instant case, it can be seen that the ATS System supplied by the applicant would not....