TaxTMI 
TaxTMI 
2026 (2) TMI 340
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....lves Private Limited (hereinafter referred to as the "Applicant") is inter-alia, engaged in the manufacture of various Gas Inlet and Cylinder Valves for the automotive industry. The Applicant after manufacture of different types of valves (as mentioned above) and supplies it to automobile manufacturers in India and also to its group company Krishna Landi Renzo India Private Limited. 1.2 For the above purposes, the Applicant has been importing Brass rods from 2024 onwards (hereinafter referred to as "subject product") from the Azienda Lavorazioni Metallurgiche e Affini Gnutti (hereinafter referred to as "ALMAG/Manufacturer") based in Italy. The Applicant places a purchase order with ALMAG, specifying the grade and specification of the Brass rod intended to be imported. 1.3 In past, Applicant raised Purchase order no. IM 124-25/ dated 05.11.2024 ("PO") bearing the description "Brass Rods DIA 58 MM and Brass Rod DIA 42 MM". Further, the Bill of lading No.MEDUFK008896 mentions the same description as mentioned in the PO. 1.4 The Bill of Entry No 8192418 dated 05.02.2025 bears the description of goods as "Brass Bars MM 58 and Brass Bar MM 42 use for auto industry" and classifie....
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.... Rem. Lead (Pb) 7439-92-1 1.6-2.2% Nickel (Ni) 7440-02-0 ≤0.3% Tin (Sn) 7440-31-5 ≤0.3% Iron (Fe) 7439-86-6 ≤0.3% Aluminium (AI) 7429-90-5 ≤0.05% 1.12 The method undertaken by the ALMAG (manufacturer) to manufacture solid brass rods is the extrusion method. Below mentioned is a detailed steps involved in producing brass rods through extrusion: a. Raw Material Selection: The Extrusion manufacturing process of Brass rods begins with the careful selection and preparation of raw materials. Copper, zinc, and lead are the primary constituents, with trace elements like tin, nickel, and iron. b. Preliminary Treatments: The raw materials are thoroughly cleaned to remove any surface impurities such as, oils, dirty, or unwanted particles to avoid contamination in the further processing. c. Charge Preparation: At this stage the cleaned raw materials with appropriate ratio of Copper, Zinc and other metals are added and measured to create "Charge" for melting and casting stage. d. Melting and Casting: This charge consisting of the appropriate composition of metals to make brass rods is melted in a fu....
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....stage, the graphitized billets are heated in a specialized machine that subjects them to a consistent high temperature. This ensures uniform heating throughout the billet's core, making them ideal for the next step. 1.17 The Billets once adequately heated, are shaped using powerful hammers and hydraulic presses. This process allows the hot, malleable billet to be precisely formed into the desired form. It is during this step that the main body of the Valves takes shape. 1.18 The main body of the valve is then fitted with the sub-assemblies / parts imported by the Applicant. These parts are different sub-assemblies essential for the valve's functionality. The assembly process is carried out with high precision to ensure proper fitment and alignment of all components. After successful integration of all parts, the Valve becomes fully operational. Valves are critical components for gas control systems, designed to regulate the flow of gas in a controlled and efficient manner. In applications where the medium is flammable or under high pressure, valves play a vital role in ensuring safe operation. It helps maintain consistent pressure, prevent leaks, and ensure secure ....
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....in terms of the rules notified under the Customs Tariff Act, 1975 (51 of 1975) and matters relating thereto. (Emphasis Supplied) 1.24 The present application is being made by the Applicant to confirm the classification of the subject product under the First Schedule to the Customs Tariff Act, 1975. 1.25 Therefore, it flows that in the present case, the Applicant is satisfying the following conditions required for filing the application for advance ruling, namely: a. Applicant has been granted a valid Importer-Exporter Code Number (IEC) under section 7 of the Foreign Trade (Development and Regulation) Act, 1992; b. Application for advance ruling is in relation to clause (a) of Section 28H (2) of the Customs Act. Non-Applicability of Bar under Section 281 1.26 Section 281 of the Customs Act, 1962 is set out below: "SECTION 28-1. Procedure on receipt of application. - (1) On receipt of an application, the Authority shall cause a copy thereof to be forwarded to the [Principal Commissioner of Customs or Commissioner of Customs] and, if necessary, call upon him to furnish the relevant records : Provided that where any records have been c....
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.... Customs Act is the charging section, according to which Basic Customs Duty (hereinafter referred to as "BCD") is payable on all goods imported into India or exported out of India at such rates as may be specified under the Customs Tariff. 1.30 In accordance with Section 2 of the Customs Tariff, the rates at which BCD shall be levied are specified in First and Second Schedules to the Customs Tariff. Accordingly, to determine the appropriate rate of BCD on the subject product proposed to be imported in India, it is important to determine the classification of the subject product under First Schedule of the Customs Tariff. Application of principles of classification of the subject goods under Customs Tariff 1.31 It is a settled position of law that classification of a product is determined basis the 'form and condition' in which the goods are presented for clearance to the Customs Authorities. In other words, classification will be determined basis the technical specifications of the subject product in its 'as imported' condition. Reliance is also placed upon the decision of the Hon'ble Supreme Court in the case of Dunlop India Ltd. v. Union of India, 198....
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....s of the headings or the relevant Section or Chapter Notes. Therefore, the Section Notes and Chapter Notes are relevant for the purposes of determining classification of the subject product. Moreover, on application of GRI 6 which requires that while interpreting the sub-headings of the tariff for classification, the guidance of the GRIs can be applied mutatis mutandis. The text of GRI 1 reads as follows: "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." 1.36 The subject product is a man-made alloy composed primarily of copper (Cu) i.e. 57-59% and zinc (Zn), with other elements present in miniscule quantities. Its unique combination of properties such as corrosion resistance, high strength, and excellent machinability makes it highly suitable for a wide range of industrial applications. 1.37 On application of GRI 1, it is submitted that the subject product is specifically related to the desc....
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....les" and "modified rectangles", of which two opposite sides are convex arcs, the other two sides being straight, of equal length and parallel). Products with a rectangular (including square), triangular or polygonal cross-section may have corners rounded along their whole length. The thickness of such products which have a rectangular (including "modified rectangular") cross-section exceeds one-tenth of the width. The expression also covers cast or sintered products, of the same forms and dimensions, which have been subsequently worked after production (otherwise than by simple trimming or de-scaling), provided that they have not thereby assumed the character of articles or products of other headings. 1.42 In the present case, based on the Material Safety Data Sheet for CW617N (CuZn40Pb2) and the provided definition of Brass rods, the subject product clearly satisfies the criteria. The subject product is a copper-zinc-lead alloy supplied as a semi-finished rod in various sizes, and lengths, with a solid, uniform cross-section throughout its length, typically in circular forms. The rods are not in coils, and their thickness exceeds one-tenth of the width, aligning with the dimens....
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....the present case Nickel is < 0.3%. c. Tin content by weight is less than 3%. In the present case Tin is < 0.3%. 1.48 Thus, the subject product meets all conditions for classification as Copper-Zinc base alloy (brass) under Chapter 74. 1.49 Based on the Material Safety Data Sheet and Sub-heading Note, the subject goods CW617N Brass rods qualify as Copper-Zinc base alloys (brasses) under Customs Tariff Sub-Heading 7407.21 as "Of copper-zinc base alloys (brass)" under the First Schedule of the Customs Tariff Act. 1.50 Now, coming to the 8-digit classification, reliance must be placed on GRI 6 which states that "the classification of goods in the sub-headings of a heading shall be determined according to the terms of those sub-headings and any related sub-heading Notes and, mutatis mutandis, to the above rules, on the understanding that only sub-headings at the same level are comparable. For the purposes of this rule the relative Section and Chapter Notes also apply, unless the context otherwise requires". 1.51 Therefore, upon application of GRI 6, the classification of the subject product must be determined according to the terms of sub-headings. 1.52 Further, ....
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....ement by weight in the subject product, accounting for approximately 57-59% of the total composition. Further, after copper, zinc is the predominant element among all the remaining constituents. The subject product also satisfies the conditions outlined in Subheading Note (a) of Chapter 74. 1.58 In light of the conjoint reading of GRI 1, Section Notes 3, 5, and 9 of Section XV, Chapter Note 9(a) to Chapter 74, the relevant sub-heading notes, and the chemical composition, the subject product, being Brass rods, merits classification under Customs Tariff Item 7407.21.20 as "Copper bars, rods and profiles; Of copper-zinc base alloys (brass); Rods" under the First Schedule to the Customs Tariff Act. 1.59 The Basic Custom Duty for subject products falling under 7407.21.20 is 5% as per Customs Tariff. As per Schedule II to Notification No 09/2025-Integaretd Tax (Rate) dated 17.09.2025, the IGST rate for the subject product is 18% [Refer SI. No 312 of Schedule II to the NN 09/2025]. ISSUES REQUIRING ADVANCE RULING AND APPLICANT'S UNDERSTANDING 1.60 In light of the aforementioned submissions, the Applicant's interpretation of the questions raised will be as under: ....
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....ter Notes of the First Schedule to the Customs Tariff Act, 1975. Section Note 5 of Section XV provides that alloys are to be classified according to the base metal which predominates by weight. Further, Section Note 3 of Section XV defines "base metals" to include, inter alia, copper and zinc. Section Note 9 of Section XV defines "bars and rods" as rolled, extruded, drawn or forged products, not in coils, having a uniform solid cross-section along their entire length, including products subsequently worked, provided they do not assume the character of articles of other headings. Further, Sub-heading Note (a) to Chapter 74 defines copper-zinc base alloys (brasses) as alloys of copper and zine, with or without other elements,. When other elements are present, Zinc predominates by weight over each of the other elements, nickel content is less than 5% by weight, and tin content is less than 3% by weight. In view of the above, where the subject product is manufactured in conformity with the definition of "bars and rods" under Section Note 9 of Section XV and the composition satisfies the parameters prescribed for copper-zinc base alloys under Sub-head....
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....to zinc and adding other elements like lead, tin, or silicon, manufacturers can tailor brass to meet specific functional requirements. 4.2.3 Brass rods are rods made of Brass Metal of the standard UNI EN 12165:24 /CW617N DW (CuZn40Pb2) / UNS C37700 (ASTM) commonly known as forging brass due to its chemical properties making it most suitable for the process of hot forging which includes heating the metal to high temperatures and then deformed under pressure within a die to assume a desired shape which improves its workability and mechanical properties like strength and grain structure. The subject goods being imported by the Applicant are in shape of Rods with a uniform circular cross section (Diameter) of 40mm, 42mm, and 52mm having 3-meter length. 4.2.4 Chemical composition of the Brass Rods is as under: - Chemical Composition of CW167N - CuZn40Pb2 Substance nº CAS Composition Copper (Cu) 7440-50-8 57-59% Zinc (Zn) 7440-66-6 Rem. Lead (Pb) 7439-92-1 1.6-2.2% Nickel (Ni) 7440-02-0 ≤0.3% Tin (Sn) 7440-31-5 ≤0.3% Iron (Fe) 7439-86-6 ≤0.3% Aluminium (AI) 7429-90-5 ≤0.05% As per the Mat....
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....er importation have no bearing on its legal classification or duty liability Thus, the subject goods-brass rods-must be classified based on their condition at the time of import, regardless of their eventual conversion into finished products like valves. Issue of classification: 4.5 The question for determination before me is whether the "Brass Rods" merit classification under CTH 7407 2120 or any other CTH. The applicant claims CTH 7407 2120 which the Department also accepts. Chapter 74 covers "Copper and articles thereof" and Tariff Heading 7407 covers "Copper Bars, Rods and Profiles" 4.5.1 The Relevant HSN Explanatory Notes to Chapter 74 is as follows: Sub-heading Note 1 (a) to Chapter 74 In this Chapter the following expressions have the meanings hereby assigned to them: (a) Copper-zinc base alloys (brasses) Alloys of copper and zinc, with or without other elements. When other elements are present: (i) zinc predominates by weight over each of such other elements; (ii) any nickel content by weight is less than 5%. [see copper-nickel-zinc alloys (nickel silvers)]; and (iii) any tin content by weig....
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....hole length. The thickness of such products which have a rectangular (including "modified rectangular") cross-section exceeds on-tenth of the width. The expression also covers cast or sintered products, of the same forms and dimensions, which have been subsequently worked after production (otherwise than by simple trimming or de-scaling), provided that they have not thereby assumed the character of articles or products of other headings. Relevant HSN Explanatory Notes to Section XV is as follows: Section Note 3 to Section XV Throughout the Nomenclature, the expression "base metals" means: iron and steel, copper, nickel, aluminium, lead, zinc, tin, tungsten (wolfram), molybdenum, tantalum, magnesium, cobalt, bismuth, cadmium, titanium, zirconium, antimony, manganese, beryllium, chromium, germanium, vanadium, gallium, hafnium, indium, niobium (columbium), rhenium and thallium. Section Note 5 to Section XV Classification of alloys (other than ferro alloys and master alloys as defined in Chapters 72 and 74): (a) An alloy of base metals is to be classified as an alloy of the metal which predominates by weight over each of the other m....
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....e alloy (brass) under Chapter 74 and Customs Tariff Sub-Heading 7407 21 as "Of copper-zinc base alloys (brass)" under the First Schedule of the Customs Tariff Act. 4.7 Having examined the Customs Tariff, I find the subject goods merit classification under Heading 7407 21 in terms of Rule 1 of the General Rules for Interpretation. The subject goods are alloy of copper, zinc and lead where copper is predominant by weight and Zinc predominates other elements. Further, weight of nickel is also less than 5% and tin less than 3%. 4.8 Classification of the Brass Rods at eight-digit level under heading 7407 I find the classification of Brass Rods under Customs Tariff Sub-Heading 7407 21. For classification at 8-digit, reliance must be placed on GRI 6 which states that "the classification of goods in the sub- headings of a heading shall be determined according to the terms of those sub-headings and any related sub-heading Notes and, mutatis mutandis, to the above rules, on the understanding that only sub-headings at the same level are comparable. For the purposes of this rule the relative Section and Chapter Notes also apply, unless the context otherwise requires". 4.8.1 Section....