TaxTMI 
TaxTMI 
2025 (9) TMI 1549
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....mported by the appellant was classifiable under Customs Tariff Heading 8708 9900 of the First Schedule of Customs Tariff Act, 1975 as "parts of motor vehicles or otherwise"?. 4. Before the said Authority, the alternate plea of the appellant was that the same was classifiable under Customs Tariff Heading 7610 9020 as "parts of structure, not specified elsewhere". 5. The appellant submitted that the subject goods i.e. a Assy Guide Rails will be used in the manufacture of the sunroof system of an automobile. The subject goods in a sunroof assembly is a long, narrow track that provides support and guidance for the sunroof panel as it slides open and closed. It was submitted that the Guide Rail also helps to keep the sunroof panel in place and prevent it from rattling or vibrating during operation. Guide Rail ensures safe, controlled movement, prevents damage and contributes to a pleasant sunroof experience. 6. By the impugned order, the said Authority has held that the "Assy Guide Rails" was classifiable under Heading under Customs Tariff Heading 8708 2900 of the Customs Tariff Act, 1975. Relevant portion of the impugned order of the said Authority holding Assy Guide Rails cla....
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....e. The presence of the model number and part number on the subject goods i.e. Assy Guide Rail to a sunroof assembly confirms that this part is specifically designed to perform a function within that subsystem of the car's body. Motor vehicles are covered under headings 87.01 to 87.05 of Chapter 87 of the First Schedule to the Customs Tariff Act, 1975, Thus the second condition is satisfied. Further, the product is not specified particularly anywhere else in the Tariff, therefore, the third condition, ie, they must not be specifically included elsewhere in the Nomenclature is also satisfied. Since all the three conditions have been satisfied, it can be concluded that the Assy Guide Rail' is covered under the heading 8708 only and is in accordance with classification in terms of Rule 1 of GIR, Section XVII and Chapter Notes of Customs Tariff Act, 1975. 7.7.7 One thing which I would like to discuss here is that explanatory notes to the heading 8708 which contains only an illustrative list of the parts and accessories covered under that heading and not an exhaustive list. Further, just because this illustrative list may or may not contain any entry relating to any spec....
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....econd- Front windscreen (windshields), rear window and other window specified in sub-heading Note I to this Chapter and third-Other. The subsequent last single dash (-) entry, 87089900 as claimed by the applicant, pertains to other parts and accessories of motor vehicles. It is clear that the subject goods are integral part of the body of a motor vehicle of heading 8703, and as such, should be classified under CT1 87082900 as the preceding heading specifically covers parts that are directly associated with the motor vehicle's body. Therefore, it is not appropriate to classify the product under the broader category of CT1 87089900, which covers 'other types of parts and accessories of motor vehicle other than parts and accessories of motor vehicle's body. 7.7.9 I note that the Assy Guide Rail is used in the sunroof system of a vehicle. The sunroof is a specialized part of a car's bodywork that allows light and air to enter the vehicle, and the guide rail is an essential component for the movement and secure positioning of the glass panel Further, a part number that specifically identifies the Assy Guide Rail as a motor vehicle part suggests....
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....nroof. The product is thus more of a mechanical or functional part of the sunroof assembly, rather than a structural frame. The product in question does not perform the function of enclosing or providing structural support for windows or doors. It is part of a specific vehicle feature (the sunroof) and does not fit the conventional description of a frame for windows, doors, or other structures classified under Heading 7610 as claimed by the Applicant." 9. The alternate plea of the appellant before the Authority which is captured in the impugned order is reproduced below:- "7.8 The Applicant has also contended that the subject goods ie. Assy Guide Rail described as Aluminium Guide Rail which are in the nature of parts of windows and frames, would alternatively merit classification under CT1 76109020 (Parts of structures, not elsewhere specified). In this regard, it is pertinent to mention that the Assy Guide Rail in a motor vehicle sunroof system is an assembly component designed specifically to support and guide the movement of the glass panel in a sunroof system. It provides structural integrity and helps in ensuring the smooth operation of the sunroo....
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.... that heading pertains to aluminum structures generally used in building of window and door frames, not automotive parts." 11. The appellant has contended that "Assy Guide Rail" is not classifiable under Customs Tariff Heading 8302. The conclusion of the Authority reads as under:- 7.9 The applicant has contended that the Assy Guide Rail is not classifiable under heading 8302 in this regard. I find that as per Explanatory Notes to heading 8302, this heading covers general purpose classes of base metal accessory fittings and mountings. such as are used largely on furniture, doors, windows, coachwork etc. However, the heading does not extend to goods forming an essential part of the structure of the article, such as window frames or swivel devices for revolving chairs. The heading 8302 also covers mountings. fittings and similar articles suitable for motor vehicles (eg, motor cars, lorries or motor coaches), not being parts or accessories of Section XVII, For example: footrests, grip bars, window opening mechanisms etc. From the above, it is clear that Heading 8302 covers "base metal fittings, mountings. and accessories that are used for general purposes. These it....
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....at the 1st Respondent ought to have afforded an opportunity to the Appellant to make submissions on whether the subject goods are classifiable under CTI 8708 2900. This is especially so when the aforesaid classification of CTI 8708 2900 was neither the case of the Appellant nor that of the 2nd Respondent. This arbitrary act of the 1 Respondent has resulted in gross injustice to the Appellant inasmuch as the Impugned Ruling is binding on the Appellant and the Department, insofar as the future import of subject goods are concerned. G. It is settled legal position that the parties to a case should be given a reasonable opportunity of being heard and that a decision should be arrived at only upon the basis of the same. If a decision is arrived at without providing an opportunity of hearing to the aggrieved party, it becomes violative of the principles of natural justice. Thus, the Impugned Ruling passed on a completely new ground without affording an opportunity to the Appellant must be set aside as illegal. Reliance in this regard is placed on the decision of the Hon'ble Apex Court in Swadeshi Cotton Mills v. Union of India, (1981) 1 SCC 664, wherein, the Court held that ....
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.... Hon'ble Bombay High Court has set aside decision of Appellate Authority for Advance Ruling on the ground that the decision was based on new grounds which were not communicated to the assessee and that the assessee did not have the opportunity to meet and address the new grounds. L. A similar view was taken by this Hon'ble Court in Sree Annapoorna Sree Gowrishankar Hotels (P) Ltd. v. Assistant Commissioner [2016 (8) TMI 524 - MADRAS HIGH COURT]. M. In Pioneer Bakers v. Union of India [2024 (1) TMI 1247 - ORISSA HIGH COURT], the Hon'ble Orissa High Court set aside the order of the Appellate Authority for Advance Ruling on the ground that the order was passed on the basis of a report containing adverse material against the assessee without affording the assessee an opportunity to confront the same. N. The Appellant submits that the principles of natural justice, in the context of advance rulings, is also contained in Section 28-I(5) of the Customs Act. The said provision mandates the 1st Respondent to grant opportunity of personal hearing to the Appellant on the latter's request. The objective of the said provision is to ensure that the appl....
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....in accordance with GRI 1 i.e., through the primacy of terms of headings and Section Notes and Chapter notes. When the nature and description of goods match the terms of headings in a chapter and further the goods fall within the scope of Section notes and Chapter Notes of the Customs Tariff, such goods are classifiable as per Rule 1 of GRI. V. Thus, it becomes necessary to refer to relevant Section notes, Chapter notes and Heading notes to decide the classification of the subject goods under consideration. HSN Explanatory Notes: W. The Customs Tariff is aligned up to the 6-digit level with the Harmonized System of Nomenclature ('HSN') issued by the World Customs Organization ('WCO'). For uniform interpretation of the HSN, the WCO has published detailed Explanatory Notes to the HSN which have long been recognised as a safe guide to interpret the Schedules to the Customs Tariff. X In O.K. Play (India) Ltd v CCE, 2005 (180) E.L.T. 300 (S.C.) the Hon'ble Supreme Court, inter alia, observed that HSN along with the explanatory notes provide a safe guide for interpretation of an Entry." 14. The appellant has also raised several ot....
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....rmination of origin of the goods in terms of the rules notified under the Customs Tariff Act, 1975 (51 of 1975) and matters relating thereto;] (f) any other matter as the Central Government may, by notification, specify.]" 19. As per Section 28J(1) of the Customs Act, 1962, an Advance Ruling pronounced is binding :- "(a) on the applicant who had sought it; (b) in respect of any matter referred to in sub-section (2) of section 28-H; (c) on the [Principal Commissioner of Customs or Commissioner of Customs], and the customs authorities subordinate to him, in respect of the applicant." 20. As per sub-section (2) of Section 28J of the Customs Act, 1962, the Advance Ruling referred to above in sub-section (1) has to remain in force for a period of three years. If there is a change in law or facts on the basis of which the Advance Ruling was given, such Advance Ruling will cease to be in force before expiry of aforesaid period of three years. 21. The scope of appeal under Section 28KA of the Customs Act, 1962 is limited, as the ruling obtained is binding on the persons mentioned above in Section 28J of the Customs Act, 1962. Unless the ruling o....
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....eeds though it is true, some contentions of law are also raised. The Commission has interpreted the trust deeds in a particular manner. Even if the interpretation placed by the Commission on the said deeds is not correct, it would not be a ground for interference in these appeals, since a wrong interpretation of a deed of trust cannot be said to be a violation of the provisions of the Income-tax Act. It is equally clear that the interpretation placed upon the said deeds by the Commission does not bind the authorities under the Act in proceedings relating to other assessment years." 25. Under similar circumstances, in Anurag Jain v. Authority for Advance Rulings and Another, 2008 SCC OnLine Mad 1087, this Court held that the petitioner who had voluntarily invited the ruling from the first respondent therein was certainly bound by the ruling unless it is shown that the procedure followed by the authority while passing the said ruling was not in accordance with law and the same is basically opposed to law or against the principles of natural justice.(emphasis added) 26. In our view also, the challenge can be made only where there is a violation of principles of natural justice o....