TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 1686
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....: 2.1 One of the products imported by the Applicant is "Dual Mass Flywheel" (hereinafter also referred to as "DMFs"). The Applicant is continuously intending to import the DMF from its various foreign supplier into India, clearing the goods from Chennai Sea Port (INMAA1). Product Details 2.2 The DMF is a component of a vehicle's driveline system, used particularly in cars with manual transmission. It is a rotating mechanical device that transmits torque- a rotational force from the engine to the transmission, while simultaneously reducing the amount of vibration felt in the vehicle 2,3 The DMF is composed of two individual flywheel masses which are connected via a damping system. This system typically incorporates springs and a damper to absorb any vibration. The first of the two-flywheel mass is linked directly to the engine's crankshaft, while the second is connected to the transmission input shaft. 2.4 Notably, DMEs are uniquely designed to ensure and sustain contact between the engine and the clutch assembly. This design allows for independent movement between the engine and the transmission. In addition to facilitating continuous energy to the driveline,....
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....) set out in the First Schedule to the Customs Tariff Act, 1975 ('Tariff'). 3.3 As per Rule 1 of the GRI, classification of the imported products 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 remaining Rules of the GRI. 3.4 Further, as per General Explanatory Notes of The General Rules of Interpretation (GRI), in the First Schedule to the Customs Tariff, when the description of a product under a heading is preceded by "-", the said product would be a sub-classification of the description of products covered by the said heading, when the description of a product is preceded by. "-", the said product would be a sub-classification of the immediately preceding description of product under "-", when the description of a product is preceded by " ---" or " ---", the said product shall be taken to be a sub-classification of the immediately preceding description of "-" or. "-" 3.5 In case of the Applicant, the product under consideration is DMF which is a component of a vehicles' driveline system. It consists of two separate flywheel mas....
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.... 8483 60 - Clutches and shaft couplings (including universal joints): 8483 60 10 --- Flexible coupling u 7.5% - 8483 60 20 --- Fluid coupling u 7.5% - 8483 60 90 --- Other u 7.5% - 8483 90 00 - Toothed wheels, chain sprockets and other transmission elements presented separately; parts 3.7 The Applicant would like to draw attention as to why the said product is to be classified under the customs tariff heading 84835090 by the relevant Section Notes and Chapter Notes followed by the relevant explanatory notes as mentioned below. 3.8 With reference to facts of the DMF summarised in Annexure I by the Applicant, it is important to note that the DMF is principally used in the drivetrain of the motor vehicle. It is a critical component that interacts directly with the engine and plays a significant role in a vehicle's drivetrain system. The function of the flywheel is to store and provide continuous energy. When the engine piston goes from the Bottom Dead Centre to the Top Dead Centre of the engine, technically there is no power being generate....
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....ms such as damper flywheels as an internal part of an engine and classified the damper flywheel under the Heading 8483 (Exhibit 3). Hence, it ought to remain classified under the heading 8483. Section XVI Note 2 (a) specifically includes chapter 84 items in Section XVI. 3.11 Further, as per Note 2(a) of Section XVI, "Parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 84.09, 84.31, 84.48, 84.66, 84.73, 84.87, 85.03, 85.22, 85.29, 85.38 and 85.48) are in all cases to be classified in their respective headings;" 3.12 It would be pertinent here to also refer the Explanatory Note 2 of Section XVI which covers chapter 84 of CTA ....... (II) Parts In general, parts which are suitable for use solely or principally with particular machines or apparatus (including those of heading 84.79 or heading 85.43), or with a group of machines or apparatus falling in the same heading, are classified in the same heading as those machines or apparatus subject, of course, to the exclusions mentioned in Part (I) .... Separate headings are, however, provided for: ........ ........ The above rules....
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.... (A) Parts and accessories excluded by Note 2 to Section XVII This Note excludes the following parts and accessories, whether or not they are identifiable as for the articles of this Section: ...... (6) Certain other goods of Chapter 84, e.g.: (a) Taps, cocks, valves and similar appliances (e.g., radiator drainage taps, inner-tube valves) (heading 84.81) (b) Ball or roller bearings (heading 84.82) (c) Internal parts of engines or motors (crank shafts, camshafts, flywheels, etc.) falling in heading 84.83". 3.15 Moreover, we can gain additional understanding from the explanatory note of Chapter 87.08, which states - "Parts and accessories of this heading include: ......... ......... (F) Other transmission parts and components (for example, propeller shafts, halt- shafts; gears, gearing; plain shaft bearings; reduction gear assemblies; universal joints). But the heading excludes internal parts of engines, such as connecting-rods, push-rods and valve lifters of heading 84.09 and crank shaft, cam shafts and flywheels of heading 84.83. 3.16 From a conjoint reading of tariff heading, secti....
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....iff item 8483 5090 as determined by the applicant. 5. A personal hearing in the matter was held on 26.06.2024 in which Ms. Ruchi Bhat (CA), Ms. Ayushi Tamboli (CA), Mr. Anant Narayan Joshi (Sr. Manager) and Ms. Shreya Anant Joshi (Trainee) appeared for personal hearing in the matter as representatives of applicant. They reiterated the contention made in the application regarding the classification of the subject goods i.e. "Dual Mass Flywheel" a component of Vehicle's Driveline System. They contended that the subject goods merit classification under CTI- 84835090. They explained the functioning of the subject goods and relied upon the Custom Tarif heading, Section and Chapter notes and HSN Explanatory notes. In support of their contention, they also relied upon an advance ruling no. N270318 dated 23.11.2015 issued by US Customs and Board Protection (CBP). They also submitted that the department has also accepted the said classification, in their office letter dated 03/05/2024. Nobody appeared from department side to attend the personal hearing. 6. I have taken into consideration all the materials placed on record in respect of the subject goods including the submissions m....
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....er : 8483 10 91 ---- Crank shaft for engines of heading 8407 8483 10 92 ---- Crank shaft for engines of heading 8408 8483 10 99 ---- Other 8483 20 00 - Bearing housings, incorporating ball or roller bearings 8483 30 00 - Bearing housings, not incorporating ball or roller bearings; plain shaft bearings 8483 40 00 - Gears and gearing, other than toothed wheels, chain sprockets and other transmission elements presented separately; ball or roller screws; gear boxes and other speed changers, including torque converters 8483 50 - Flywheels and pulleys, including pulley blocks: 8483 50 10 --- Pulleys, power transmission 8483 50 90 --- Other Chapter 87(08) deals with parts and accessories of the Motor Vehicles. Further subheadings under CTH 8487 are: 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 (windshields), rear windows and other windows specified in Sub-heading Note 1 to th....
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.... for use solely or principally with vehicle or aircraft (Section XVII); it should, however, be noted that this exclusion does not apply to internal parts of vehicle or aircraft engines- these parts remain classified in this heading." It can be seen that the fundamental role of DMF is to store energy and transfer it to the driveline, the component might be viewed as a transmission device specifically engineered for use with the vehicle. However, examination of the description and function of the flywheel provided in para 4.8 above clearly positions it as an integral part of engine system, rather than a separate transmission device. Consequently, it would be appropriate to consider the dual mass flywheel as internal parts of the vehicle's engine. Reference could also be taken from the US Customs and Board Protection (CBP) Ruling No. N270318 dated 23 November 2015, wherein CBP has recognized items such as damper flywheels as an internal part of an engine and classified the damper flywheel under the Heading 8483 6.6 Further, as per Note 2(a) of Section XVI, "Parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 84.09, 84.31, 84.48, 84.....
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......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 (see paragraph (A) below), and (b) They must be suitable for use solely or principally with the articles of Chapters 86 to 88, and (c) They must not be more specifically included elsewhere in the Nomenclature. (B) Parts and accessories excluded by Note 2 to Section XVII This Note excludes the following parts and accessories, whether or not they are identifiable as for the articles of this Section: ... .... (6) Certain other goods of Chapter 84, e.g.: (a) Taps, cocks, valves and similar appliances (e.g., radiator drainage taps, inner-tube valves) (heading 84.81) (b) Ball or roller bearings (heading 84.82) (c) Internal parts of engines or motors (crank shafts, camshafts, flywheels, etc.) falling in heading 84.83". 6.10 Besides....