TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1404
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....inafter referred to as "the Applicant"), a private limited company, operates across sectors such as Digital Industry, Smart Infrastructure, and Rail Mobility. The company offers advanced solutions in electrification, automation, and digitalization. It supports manufacturing through industrial software and automation, enables sustainable energy systems, develops smart city infrastructure, and delivers modern rail transport solutions. The Applicant is a preferred supplier to various public sector undertakings, state utilities, and private enterprises across the country. 2.2 The applicant is importing multiple parts of "Vacuum Circuit Breakers" (hereinafter referred to as the "VCBs/Vacuum Circuit Breakers "the subject good") through Air Cargo Complex, Mumbai Zone - III and through Sea, JNCH, Nhava Sheva, Zone - II. 2.3 The VCBs are classified under CTH 8535 of the First Schedule to the Customs Tariff Act 1975. Under the heading 8535, the appropriate Tariff Items will depend on the applicable voltage at which the Circuit Breaker operates: as shown below: 85352121 For a voltage of 11 kV 85352122 For a voltage of 33 kV u 85352123 For a voltage of 66 kV u ....
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.... Tariff Act, 1975. GIR 1 is extracted below: 1. The titles of Sections, Chapters and Sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions: (emphasis supplied). 3.5 Chapter 85 of the First Schedule to the Customs Tariff Act, 1975 covers goods described as "Electrical machinery and equipment and parts thereof, sound recorders and reproducers, parts and accessories of such articles". Chapter 85 falls under Section XVI, titled "Optical, Photographic, Cinematographic, Measuring. Checking, Precision, Medical or Surgical Instruments and Apparatus; Clocks and Watches, Musical Instruments; Parts and Accessories Thereof". 3.6 Electrical apparatus for making or protecting electrical circuits for voltages in excess of 1000 Volts are covered under CTH 8535. The Heading 8535 reads as under: "8535: Electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for exam....
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....ide a Vacuum Circuit Breaker at high voltages, temperatures and during arcing. These components are specially designed to quench electrical arcs and are manufactured to strict specifications. The copper used for manufacturing these parts is a special grade of copper; commonly known as De-oxygenated Copper or Oxygen-Free Copper. 3.13 When the classification of the Vacuum Circuit Breakers on their own under CTH 8535 is justified, the classification of identifiable parts of the Vacuum Circuit Breakers will be governed again by Note 2 to Section XVI. 3.14 In the matter of Delton Cables Ltd. reported in 2005 (181) ELT 373 (SC), the Hon'ble Supreme Court had laid down the ratio of sequential application of Note 2 to Section XVI. In accordance with this ratio, once Note 2(a) is found applicable, recourse to Note 2(b) or 2(c) ibid would not be appropriate. 3.15 As Note 2 is subject to the provisions of Note 1 to Section XVI, it will also be necessary to look at the exclusions laid down in Note 1 ibid, which has a bearing on classification of a few parts covered in this application. 3.16 It is apparent that subject to exclusions specified in Note 1 to Section XVI all parts o....
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....umber of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate'. 3.24 The heading 8535 under which the Vacuum Circuit Breakers are covered does not have a separate sub-heading for parts. However, parts of the machines of the heading 8535 that are meant for use solely or principally with the machines of CTH 8535 are specifically covered under CTH 8538. 3.25 Therefore, by application of Note 2(b) to Section XVI, classification of the parts of Vacuum Circuit breakers listed from SI No 1 to 25 in Annexure 1 to the application under CTH 8538 (Boards, panels, consoles, desks, cabinets and other bases for the goods of heading 8537, not equipped with their apparatus) will be legally appropriate. 3.26 Under CTH 8538 the appropriate Tariff Item will be CTH 85389000. Therefore, the parts listed from Sl. No 1 to 25 of Annexure 1, will merit classification under CTH 85389000 for the reason that a) these parts are not excluded by Note 1 to Section XVI, b) these parts are identifiable for use solely with the Vacuum Circuit Breake....
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....ing 85.36, when for a voltage exceeding 1,000 volts. 3.33 As the HSN ENs under CTH 8535 state that the HSN ENs under CTH 8536 will equally apply. Therefore, a reference to the HSN ENs under CTH 8536 as they apply to electrical contacts and terminals will be necessary. (III) APPARATUS FOR MAKING CONNECTIONS TO OR IN ELECTRICAL CIRCUITS This apparatus is used to connect together the various parts of an electrical circuit. It includes : (A) Plugs, sockets and other contacts for connecting a movable lead or apparatus to an installation which is usually fixed. This category includes : (1) Plugs and sockets (including those for connecting two movable leads). A plug may have one or more pins or side contacts which match corresponding holes or contacts in the socket. The rim or one of the pins may be used for earthing purposes. (2) Sliding contacts such as brushes for motors and current-collectors for electric traction vehicles, lifting appliances, etc. (overhead or third rail collectors, etc.) other than such articles of "carbon" or graphite (heading 85.45). They may consist of block metal, wire cloth or laminated strip. and remain in this heading....
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....ction XVI, which states that the parts which are goods covered under any of the headings of Chapter 84 or 85 should in all cases be classified under this heading only. 3.37 The principle of sequential application of Note 2 to Section XVI has been laid down by Hon'ble Supreme Court in the matter of Delton Cables Ltd. reported in 2005 (181) ELT 373 (SC), Therefore, when the classification of a part can be decided by application of Note 2 (a) to Section XVI, there will no requirement to refer to other rules such as Note 2 (b) or 2 (c) to determine the classification of the said part. 3.38 As already noted the parts listed in Table -1 are in the nature of contacts and terminals classifiable under CTH 8535. Under this heading the appropriate Tariff Item will be 85359090 as no other Tariff Item covers these parts specifically. Therefore, the classification of the parts listed in SI No 26 to 39 of Annexure- 1 and listed in Table -1 under CTH 85359090 will be appropriate in terms of Note 2(a) to Section XVI. Classification under CTH 7415 as parts of general use, 3.39 Given the fact that the parts listed in Table 1 above, are in the nature of contacts or terminals used for m....
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....r assembling or fastening of goods. The bolts and rods listed in the Table-1 are not used for assembling or fastening of goods but are used to make electrical contacts and are used for power transmission. The same principles will apply to rods also which are in the nature of rivets of CTH 7318 as shown below: (C) RIVETS Rivets differ from the goods described above in that they are non-threaded; they are usually cylindrical with round, flat, pan shaped or countersunk heads. They are used for the permanent assembly of metal parts (e.g., in large frameworks, ships and containers). The heading excludes tubular or bifurcated rivets for all purposes (heading 83.08) but rivets which are only partly hollow remain classified in this heading. 3.42 These bolts and rods are made of copper and bolts and rods which are in the nature of parts of general use are covered under CTH 7415. The HSN ENs under CTH 7415 are extracted below: The Explanatory Notes to headings 73.17 and 73.18 apply, mutatis mutandis, to this heading, except that the heading also includes copper-headed nails with iron or steel shanks (mainly used m upholstery or ornamental work). 3....
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....ntifiable parts of the Vacuum Circuit Breakers will be governed again by Note 2 to Section XVI. ⮚ In the list of parts mentioned in the table to the application, the parts listed from SI. No. 1 to 25 are parts identifiable for use solely with the Vacuum Circuit Breakers and not in the nature of parts of general use as defined in Note 2 to Section XV, hence classifiable under CTH 8538. ⮚ In other words, if any part of the Vacuum Circuit Breakers is covered as goods in any of the headings of Chapter 84 or 85, its classification under that heading will be appropriate in terms of Note 2(a) to Section XVI. Other parts, if they are identifiable parts (as listed from SI. No. 1 to 25) of Vacuum Circuit Breakers their classification under CTH 8538 will be appropriate in terms of Note 2(b) to Section XVI. ⮚ Further, regarding classification for the parts mentioned at SI. No. 26 to 39, HSN Explanatory Notes may be referred which are reproduced as under: (B) Other connectors, terminals, terminal strips, etc. These include small squares of insulating material fitted with electrical connectors (dominoes), terminals which are metal parts in....
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....ect goods. I have gone through the submissions made by the applicant during the personal hearing and comments received from the concerned Commissionerate. I proceed to pronounce a ruling on the basis of information available on record as well as existing legal framework. 6.2 At the outset, I find that the issue raised in the question in the Form CAAR-1 is squarely covered under Section 28H(2) of the Customs Act, 1962, being a matter related to classification of goods under the provisions of this Act. 6.3 Before deciding the issue, let me deliberate on the legal framework prescribed in Customs Tariff Act, 1975, Chapter/ Section notes along with HSN explanatory notes. As per Rule 1 of GRI, the titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes. 6.4. The applicant has submitted that the Vacuum Circuit Breaker is a device that uses a vacuum to make or break electrical circuits or interruption of interruption of current flow and the opening of the circuit thus enabling breaking of an electrical circuit in hig....
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....resters, voltage limiters, surge suppressors, plugs and other connectors, junction boxes), for a voltage exceeding 1,000 volts. 8535 10 - Fuses: - Automatic Circuit Breakers: 8535 21 -- For a voltage of less than 72.5 kV: --- Vacuum circuit breakers : 8535 21 21 --- For a voltage of 11 kV 8535 21 22 --- For a voltage of 33 kV 8535 21 23 --- For a voltage of 66 kV 8535 21 29 --- Other "This heading covers electrical apparatus generally used in power distribution systems. The provisions of Explanatory Note to heading 85.36 apply, mutatis mutandis, as regards the technical characteristics and the functioning of apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits. The heading covers apparatus of the kinds described an Explanatory Note to heading 85.36, when for a voltage exceeding 1,000 volts. These include (A) Fuses and automatic circuit breakers which automatically interrupt the current when its intensity or voltage exceeds a certain limit. " From the above entries and the Explanatory Notes to Heading 8....
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....c) all other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8485 or 8548. Note 2 deals with three categories of parts (i) parts which are goods included in any of the headings of Chapter 84 or 85 (ii) other parts suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading and (iii) all other parts. 6.4.5 Since Note 2 is expressly made "subject to" Note 1 to Section XVI, it is also necessary to examine Note 1, which provides for exclusions from classification as "parts" under Chapters 84 and 85. The relevant extract of Note 1 to Section XVI is reproduced below: 1. This Section does not cover: (a) transmission or conveyor belts or belting, of plastics of Chapter 39, or of vulcanized rubber (heading 4010); or other articles of a kind used in machinery or mechanical or electrical appliances or for other technical uses, of vulcanised rubber other than hard rubber (heading 4016): (b) articles of leather or of composition leather (heading 4205) or of furskin (heading 4303),....
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....olishing) to meet the highly specialized requirements of functioning inside a Vacuum Circuit Breaker at elevated voltages and temperatures, and during arcing conditions. These components are specifically designed to quench electrical arcs and are produced to exacting technical specifications. The copper used is a special grade, commonly known as De- Oxygenated Copper or Oxygen-Free Copper. From the design, shape, and functionality, it is evident that these copper parts are specially made for and solely used in Vacuum Circuit Breakers. They are not generic copper articles that could be applied in other equipment or goods and therefore cannot be classified under Chapter 74. On the basis of their technical characteristics and dedicated functional use, it is clear that the goods in question do not fall within the ambit of "parts of general use" as defined in Note 2 to Section XV. Furthermore, these parts do not fall within any of the exclusion categories listed under Note 1 to Section XVI. Classification of parts of Vacuum Circuit Breaker, as listed at Sr. No. 1 to 25 of Table I above 6.4.7 It is seen that parts which are goods included in any of the Heading of Chapters 84 or ....
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....propriately classifiable under CTI 85389000 (Other) i.e. residual entry, of the First Schedule of the Customs Tariff Act, 1975, in accordance with Note 2(b) to Section XVI and the Explanatory Note to Chapter Heading 8535. Classification of parts of Vacuum Circuit Breaker, as listed at Sr. No. 26 to 39 of Table I above 6.4.9 The applicant submits that the parts listed from SI. No 26 to 39 of Table I above, are in the nature of electrical contacts or terminals and used in making electrical contacts for power transmission. From the technical description it could be seen that these parts are used for the following purpose: This is a fixed contact carrier connector made of oxygen-free copper, manufactured through machining and milling processes. It is assembled with a copper-chromium contact disk through brazing and used inside a vacuum interrupter device, which is hermetically sealed for life. Its main purpose is power transmission. There is no dispute that the parts listed at SI. No. 26 to 39 of Table I above, are identifiable parts of Vacuum Circuit Breakers. Based on their technical description and function, it is evident that these parts are used for making electr....
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.... and remain in this heading even when coated with an external lubricating layer of graphite. (3) Lamp or valve sockets and lamp-holders. Certain lamp-holders are in the form of candles for mounting in candelabra or are designed to form a bracket against a wall; these remain classified here provided their main function is to act as lamp-holders. Plugs and sockets, etc., assembled with a length of wire are excluded (heading 85.44). (B) Other connectors, terminals, terminal strips, etc. These include small squares of insulating material fitted with electrical connectors (dominoes), terminals which are metal parts intended for the reception of conductors, and small metal parts designed to be fitted on the end of electrical wiring to facilitate electrical connection (spade terminals, crocodile clips, etc.). Terminal strips consist of strips of insulating material fitted with a number of metal terminals or connectors to which electrical wiring can be fixed. The heading also covers tag strips or panels; these consist of a number of metal tags set in insulating material so that electrical wires can be soldered to them. Tag strips are used in radio or oth....
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.... the Explanatory Note to Chapter Heading 8535. 7. The concerned jurisdictional Commissionerate, i.e. NS-V, JNCH, has submitted that the parts listed at Sl. No. 1 to 25 are identifiable for use solely with Vacuum Circuit Breakers and are not in the nature of "parts of general use" as defined in Note 2 to Section XV. Accordingly, these are classifiable under CTH 8538, in terms of Note 2(b) to Section XVI. Further, as regards the parts listed at Sl. No. 26 to 39, which are in the nature of contacts or terminals used in making electrical connections for power transmission, and are specifically designed to be fitted on the ends of electrical wiring to facilitate such connections, it has been submitted that these parts, being used in equipment where the operating voltage exceeds 1,000 volts, merit classification under CTH 8535 90 90. I concur with the view expressed by the concerned jurisdictional Commissionerate. 8. The applicant, in their submission, has requested that, in view of the highly technical and sensitive nature of the information furnished in the application, the ruling and any related information may not be published so as to prevent unintended dissemination. ....