TaxTMI 
TaxTMI 
2025 (12) TMI 1624
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..... Submission by the Applicant: 2.1 M/s. Valeo India Private limited ("the Applicant"), a Private Limited company is engaged in the manufacture of automobile components and has a strong presence in areas of Mechanical Design, Simulation, Embedded Software Development, Vision Systems Software and Hardware and Functional Safety Design. 2.2 The applicant is importing Clutch Master Cylinders and Concentric Slave Cylinders (hereinafter referred to as "CMC and CSC"), which are used in motor vehicle's clutch system. Though the CMC and CSC may not look the same, they are integral parts of the hydraulic clutch system. Function and Composition of 'CMC' 2.3 A CMC is a component of a car clutch system, specifically semi- hydraulic and fully- hydraulic clutch systems and is used to transfer the clutch pedal movement to the clutch via hydraulic fluid. The CMC consists of a body, piston, primary seal, secondary seal, a push rod, a low-pressure nozzle and a high- pressure nozzle. The body is made up of aluminium or plastic and the piston is made up of anodized aluminum. The primary seal of the CMC is used to isolate the reservoir from the hydraulic chamber and the secondary ....
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....ster cylinder and compresses the hydraulic fluid building up pressure. The pressure is transmitted through the high-pressure pipe (4) to the slave cylinder (5). The pushrod (6) is connected to the piston of the salve cylinder. Due to the increase of pressure in the slave cylinder, the pushrod is pushed outside acting on the clutch fork, which releases the pressure plate and opens the clutch. The hydraulic fluid used for actuation is usually brake fluid or mineral oil. The working of the CSC is depicted in the picture below. (Picture 4) 2.11 It could be seen that both the CMC and CSC are essentially linear acting hydraulic cylinders, and their operation depends on the hydraulic pressure created by the hydraulic fluid. 3. Applicants interpretation of Law/Facts: APPLICANT'S ELIGIBILITY TO SEEK ADVANCE RULING 3.1 The Applicant is eligible to seek an advance ruling under the Customs Act, 1962. As per Section 28E(c) of the Act, an "applicant" is defined as a person holding a valid Importer-Exporter Code (IEC) under the Foreign Trade (Development and Regulation) Act, 1992. The Applicant holds a valid IEC (No. 0508058899), satisfying this requirement. The present applica....
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.... is extracted below: "(B) HYDRAULIC POWER ENGINES AND MOTORS This group includes: (1) Certain engines, other than turbines or wheels of heading 84.10, producing mechanical power by utilising the energy of the waves or sea swell (Savonius rotor with two semicylindrical bladings) or of the tides. (2) Water column machines operating by the pressure of water on pistons. The water acts on two or more pistons moving inside the (cylinders which in turn drive a shaft. (3) Hydraulic cylinders consisting, for example, of a brass or steel barrel and a piston operated by oil (or other liquid) under pressure applied on one side (single-acting) or on both sides (double-acting) of the piston, the energy of the liquid under pressure being converted into a linear motion. These cylinders are used on machine-tools, construction machines, steering mechanisms, etc. (4) Hydraulic valve actuators, presented separately, consisting of a metal casing containing a piston which, by means of a pin perpendicular to the piston rod, converts the linear motion caused by the action of a liquid under pressure into a rotary motion, in order to operate a plug valve....
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....ally with the above-mentioned vehicles; and (ii) They must not be excluded by the provisions of the Notes to Section XVII (see the corresponding General Explanatory Note)". 3.11 The HSN Explanatory Notes under Section XVII lay down the most important principle for classification of parts and accessories of the goods of Section XVII thus: "(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 Note 2 to this Section and (b) They must be suitable for use solely or principally with the articles of Chapters 86 to 88 and (c) They must....
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....ification of the CMC and CSC in question under CTH 8708 only on the ground that these components are identifiable for use solely or principally with motor vehicles in question will not be appropriate. 3.18 It is therefore apparent that classification of CMC and CSC in question under CTH 84122100 will be appropriate in terms of GIR 1 read with Note 2(e) to Section XVII and for the same reasons classification of the CMC and CSC in question under CTH 8708 and more specifically under CTH 8708 9300 as parts of clutches of motor vehicles can be ruled out. 3.19 The American Customs in their Ruling No HQ H195876 dated March 24, 2016 dealt with identical components. In this ruling, the American Customs revoked their earlier ruling for these components under CTH 87089375 and approved the classification of the CMC under CTH 8413 5000 as a reciprocating positive displacement pump, while approving the classification of CSC under CTH 8412 2100. 3.20 While this ruling has clearly ruled out classification of CMC and CSC under CTH 87089375 correctly, in our view the suggested classification for CMC under CTH 84135000 as reciprocating positive displacement pump, may not be correct as pumps ....
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....Import and reply from jurisdictional Commissionerate: 4.1 The applicant in their CAAR-1 indicated that they intend to import the subject goods i.e. Clutch Master Cylinder (CMC) and Concentric Slave Cylinder (CSC) at the jurisdiction of Office of the Commissioner of Customs, Chennai-II (Import), Chennai. The application was forwarded to the Office of the Commissioner of Customs, Chennai-II (Import), Chennai for their comments on 05.03.2025, 24.03.2025, 09.04.2025 & 30.04.2025. However, no response or comments has been received in this matter till now. 5. Details of Hearing 5.1 A hearing was held on 13.06.2025 at 03.30 PM. Sh. P. Sridharan, authorized representative appeared online for the hearing on behalf of the applicant and reiterated the contention submitted with the application. He stated that the subject goods, namely Clutch Master Cylinder (CMC) and Clutch Slave Cylinder (CSC), are used in the clutch systems of motor vehicles and are classifiable under CTH 8412, specifically under CTI 8412 21 00 as linear acting cylinders. In support of this classification, he referred to Section Note 2(e) of Section XVII, arguing that the subject goods are excluded from the ambit....
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....s hydraulic clutch system. While differing in appearance, both serve integrated functions within the system. The CMC is used in semi-hydraulic and fully hydraulic clutch systems to transmit pedal movement to the clutch via hydraulic fluid. It comprises a body (made of aluminium or plastic), an anodized aluminium piston, primary and secondary seals, a push rod, and both low-pressure and high-pressure nozzles. The primary seal isolates the reservoir from the hydraulic chamber, while the secondary seal isolates the reservoir chamber from the external environment. The push rod connects to the clutch pedal, and the nozzles connect to the reservoir and high-pressure lines. The CMC is connected to a fluid reservoir, sometimes shared with the brake master cylinder, and functions as a transmitter of driver input to the clutch. The CSC is a hydraulic cylinder with an integrated release bearing, eliminating the need for a clutch fork and conventional release bearing. Mounted concentrically on the gearbox input shaft, it is made of lightweight aluminium and is in direct contact with the clutch cover diaphragm, enhancing system efficiency. The CSC simplifies the mechanism and improves the....
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....er vapour power units. (A) REACTION ENGINES OTHER THAN TURBO-JETS ........ ........ (B) HYDRAULIC POWER ENGINES AND MOTORS This group includes: (1) Certain engines, other than turbines or wheels of heading 84.10, producing mechanical power by utilising the energy of the waves or sea swell (Savonius rotor with two semicylindrical bladings) or of the tides. (2) Water column machines operating by the pressure of water on pistons. The water acts on two or more pistons moving inside the (cylinders which in turn drive a shaft. (3) Hydraulic cylinders consisting, for example, of a brass or steel barrel and a piston operated by oil (or other liquid) under pressure applied on one side (single-acting) or on both sides (double-acting) of the piston, the energy of the liquid under pressure being converted into a linear motion. These cylinders are used on machine-tools, construction machines, steering mechanisms, etc. (4) Hydraulic valve actuators, presented separately, consisting of a metal casing containing a piston which, by means of a pin perpendicular to the piston rod, converts the linear motion caused by the action of a liquid unde....
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.... * A piston operated by the hydraulic circuit, * A body with a piston guide and gaskets, * A preloading spring, * A release bearing, * A hydraulic inlet port A concentric Slave Cylinder has a concentric (circular) design, is mounted around the transmission input shaft, and incorporates the release bearing. In a CSC system, the release bearing is integrated with the hydraulic piston and plays a critical role in clutch operation by directly contacting the clutch diaphragm spring. When the driver presses the clutch pedal, hydraulic pressure moves the piston, and thus the release bearing forward to push against the diaphragm spring, thereby disengaging the clutch and separating the engine from the transmission. When the pedal is released, the diaphragm spring pushes the bearing and piston back, re-engaging the clutch. This integrated design ensures a compact, efficient, and smooth clutch actuation, eliminating the need for a separate clutch fork and release bearing. The release bearing in a CSC is essential, as it physically contacts the clutch diaphragm spring and transmits hydraulic force from the piston to disengage the clutch. Without it, t....
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....described in the HSN Explanatory Notes to Heading 8412. Therefore, the CSC cannot be classified as a linear acting hydraulic cylinder under Heading 8412. 6.7 Let me examine the issue of classification of the product i.e. Clutch Master Cylinder (CMC) and Concentric Slave Cylinder (CSC), under CTH 8708 as parts of motor vehicles. 6.7.1 The applicant has submitted that the Clutch Master Cylinders (CMC) and Concentric Slave Cylinder (CSC), are used in the clutch systems of motor vehicles, specifically in semi-hydraulic and fully hydraulic clutch configurations. The CMC and CSC are key components in the clutch actuation mechanism and are designed exclusively for use in motor vehicles. Given that the CMC and CSC are specifically engineered for and used in motor vehicle clutch systems, and are identifiable as a part of such vehicles, it is necessary to examine the classification of the subject goods under Customs Tariff Heading (CTH) 8708, which covers parts and accessories of motor vehicles, under the Customs Tariff Act. 6.7.2 Chapter 87 is covered under Section XVII (vehicles, aircraft, vessels and associated transport equipment). Classification of parts and accessories of moto....
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....nto motion and therefore does not exhibit the essential characteristics of a hydraulic cylinder as defined under the category of (B) Hydraulic Power Engines and Motors in the HSN Explanatory Notes to CTH 8412 (Other engines and motors). Consequently, it does not merit classification under CTH 8412. Further, as discussed at para 7.6.3, Concentric Slave Cylinder (CSC) contains a hydraulic cylinder, it also incorporates a release bearing specifically designed for clutch actuation in vehicles. The release bearing's design enables it to rotate with the diaphragm spring, ensuring smooth and frictionless operation. Its integration into the CSC housing simplifies the system by eliminating the need for a separate release bearing, thereby improving reliability and reducing maintenance requirements. As such, it performs a function that extends beyond that of a standard hydraulic cylinder as described in the HSN Explanatory Notes to Heading 8412. Accordingly, both the CMC and CSC do not fall within the scope of Heading 8412 and are not excluded from classification under Section XVII by Note 2(e), as claimed by the applicant. Furthermore, the Clutch Master Cylinders (CMC) and Conce....
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....ms Tariff Act, 1975. 6.7.6 The Heading 8708 falls under Section XVII of HSN covers 'Parts and accessories of Motor vehicles of Heading 8701 to 8705'. The relevant entries and HSN Explanatory Notes to CTH 8708 are reproduced hereunder: 8708 Parts and Accessories of the Motor vehicles of Heading 8701 to 8705 8708 10 -Bumpers and parts thereof: 8708 10 10 --- For tractors 8708 10 90 --- Other - Other parts and accessories of bodies (including cabs) 8708 21 00 -- Safety seat belts 8708 22 00 -- Front windscreens (windshield), rear windows and other windows specified in Sub- Heading Note 1 to this chapter 8708 29 00 -- Other 8708 30 00 -- Brakes and servo-brakes; parts thereof 8708 40 00 - Gear boxes and parts thereof 8708 50 00 - Drive-axles with differential, whether or not provided with other transmission component, non-driving axles; parts thereof 8708 70 00 - Road wheels and parts and accessories thereof 8708 80 00 - Suspension systems and parts thereof -Other parts and accessories: 8708 91 00 -- Radiators and parts thereof 8708 92 00 -- Silencers and exhaust pipes; parts thereof 8708 ....
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....f, including hydraulic clutches and their components, except for electro-magnetic clutches (classified under Heading 85.05). In the present case, both the CMC and CSC are essential parts of the hydraulic clutch system, and this fact has also been duly acknowledged by the applicant. It is nobody's case that Clutch Master Cylinder (CMC) and Concentric Slave Cylinder (CSC) are not the essential part of the clutch system of a motor vehicle. Customs Tariff Item (CTI) 87089300 of the Customs Tariff covers "clutches and parts thereof". Since the subject goods form an integral part of the hydraulic clutch system of a motor vehicle, hydraulic clutch systems and their integral components, such as the CMC and CSC, fall within the scope of Heading 8708. Accordingly, the subject goods namely Clutch Master Cylinder (CMC) and Concentric Slave Cylinder (CSC) are appropriately classifiable under Customs Tariff Item (CTI) 8708 93 00 (Clutches and parts thereof), in accordance with General Interpretative Rule (GIR) 1, Section XVII, and the Explanatory Notes to Heading 8708 of the Customs Tariff Act, 1975. 6.8 The Applicant has contended that the subject goods cannot be classified under CTH ....
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....e parameters for the classification of the goods: (i) HSN along with explanatory notes which provide a safe guide for interpretation of an entry, (ii) equal importance to be given to Rule of Interpretation of Tariff, (iii) Functional utility, design, shape and predominant usage have also got to be taken into account while determining classification of an item. Therefore, while end use alone may not be decisive for classification, it remains a relevant factor that should be considered along with other statutory criteria when determining the appropriate classification of goods. 6.9 The applicant has relied upon the American Customs Ruling No HQ H195876 dated March 24, 2016 wherein they approved the classification of the CMC under CTH 8413 5000 as a reciprocating positive displacement pump, while approving the classification of CSC under CTH 8412 2100 and ruled out classification of CMC and CSC under CTH 8708. Further, the applicant has submitted that classification for CMC under CTH 84135000 as reciprocating positive displacement pump, may not be correct as the definition of pumps under the Harmonized System Nomenclature (HSN) Explanatory Notes to Hea....