TaxTMI 
TaxTMI 
2026 (4) TMI 1095
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....e OEM (Original Equipment Manufacturers). The subject product in the name and style of "Integrated Dynamic Brake" (hereinafter referred to as iDB) is a product manufactured by HL Mando in South Korea, which is being imported by the Applicant for resale. The imported product is not undergoing any value addition in India and is directly resold in the market. 2.1 About the Product: Integrated Dynamic Brake is a 1-box electro-hydraulic brake system that replaces and integrates multiple components of a traditional brake system and modern brake system into one unit. This promotes the reduction in vehicle mass and simplifies the assembly step by requiring fewer electrical and hydraulic components. The iDB majorly includes various sensors such as Stroke Sensor, Motor Position Sensor, Pressure Sensor, a reservoir holding brake fluid, a valve block that regulates the flow of brake fluid, an ECU, a motor to pump the fluid and a pump piston to apply the brake fluid pressure. Complete list of Components present in the subject product is mentioned below: 2.2 In order to understand its functioning, reference to the functioning of a traditional brake system is essential. In a tradition....
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....generating unit discharges the fluid through the hydraulic line to the calliper installed at the wheel of the vehicle to generate a braking force, and the electronic control unit controls the valve block that essentially regulates the amount and flow of brake fluid passing on to the callipers. * Here, the valve block is constituted by a plurality of valve units and its combined synchronous action regulates the flow of liquid. In such a braking process, the component called master cylinder consisting of a pedal simulator artificially induces pressure on the brake pedal in order to give a feeling to the user that the vehicle is stopping proportionally based on the amount of pedal pressure. This pedal simulator generates a pressure on the brake pedal to reduce the sense of difference in driving. * As depicted above, the whole function of regulating the brake fluid starting from the stage of acquiring the pressure on the pedal from the stroke sensor to discharge of the fluid from the reservoir to the calliper to generate braking force is carried out by the IDB. * A pictorial representation of iDB's working is given below: 3. Applicant's interpretat....
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....up, or may at some time make up a whole, a constituents". 7. On a plain reading of the dictionary meaning of the terms "part" and "raw material" it follows that whereas a part which along with others makes up or is a constituent of something has necessarily to be in a state in which it can be used or fitted in the system of which it constitutes a part." (Enclosed as Exhibit-5) On a cumulative analysis of the above Judicial Precedents, the point which crystallizes is that "part" per se means a portion of equipment or machinery which is intrinsically linked to the functioning of that particular equipment or machinery. In other words, "part" is an integral element of machinery or equipment without which the specific product cannot function. The "part" in question should be so inextricably be linked to the Product. The Product cannot be brought into any form in use, without the "part" in question being a part and parcel of the Product. In the instant case, iDB is an advanced mechanism that merely enhances the ease of braking. But, in order to classify the subject product as "part" of brake, it has to be an integral part of it without which the braking function cannot be ....
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....uires classification based on the terms of the headings and any relevant section or chapter notes, we propose to classify the item under heading 9032. 3.2 Classification of iDB under CTH 9032 The iDB is an integration of several components and machines with an objective to execute the braking function or such similar function tuned to it, acting like a controlling or regulating instrument. In its normal operation, the subject product automatically regulates the flow of brake fluid passing on to the brake calipers with the help of various components and machines such as Sensors, Valve Block, Motor, Pump, Piston, ECU, etc. As iDB is capable of automatically controlling or regulating the brake fluid passing on to the caliper, the relevant heading can be seen under CTH 9032. And this can also be classified under 8413 5090 as others in "Other reciprocating positive displacement pumps" in accordance with GIR 3(b) r/w Note 3 and 4 of Section XVI. In view of the above submissions, hereby we propose that the subject product is classifiable in any one of the following three HSN- a. 9032 - The iDB qualifies for classification under Heading 9032, as it is a Programmable Proce....
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....ining an expanding liquid, float, etc.) may be used instead of a measuring device. B. A control device that compares the measured value with the desired value and actuates the device described in (C) below accordingly. C. A starting, stopping or operating device. As per the above explanatory notes, a product can be classified under this Heading if the same consists of a measuring device, a control device and a starting, stopping or operating device. In the instant matter, the iDB is a package of Motor Assembly, Pressure Sensor, ECU, hydraulic block, main reservoir, etc., that enhances braking function. As an independent part, the Integrated Dynamic Brake can measure the pressure applied on the brake pedal using a stroke sensor, and the ECU assesses the required brake force and sends control signals to both the electric motor and the valve block, which in turn releases the pump piston to generate hydraulic pressure acting on the calipers. The pressurised hydraulic fluid generated by the piston moves toward the wheel callipers. As the hydraulic pressure builds, braking force is applied to the wheels, slowing the vehicle. Therefore, the subject product iDB is a....
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....032. In order to ascertain if the subject product can be termed as a Programmable Process Controller, reference to the above table is necessary. Similar to what has been stated above, iDB automatically controls the process of brake fluid flowing to the caliper by continuously monitors the amount of fluid flowing to the calipers and based on the inputs received from the factor to be controlled, the microprocessor (ECU) instructs the operating devices (Valves and Motors) to send the pre-determined amount of brake fluid to the calipers. Moreover, the factor to be controller herein is the braking and the functioning of iDB also depends upon the amount of braking pressure applied by the driver. It would be trite to note that the Indian Institute of Technology, Madras has certified that the subject product is a Programmable Process Controller after due consideration of its constituents and functioning. On the whole, iDB fulfils all the criteria to constitute a Programmable Process Controller and thus, classifiable under CTH 9032 as Automatic Regulating or Controlling Instruments and Apparatus. The Hon'ble CESTAT, New Delhi in the case of M/s. Continental Automotive Brake vs.....
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....an intervention. Each unit typically comprises of an input or measuring device, a control device or microprocessor, and an output or operating device. Additionally, these units are equipped with components that enable communication with other Electronic Control Units (ECUs), the instrument cluster, sensors, actuators, and more. The BCM function as specialized ECUs dedicated to controlling vehicle body functions such as automatic wiper operation, cabin climate control, automatic headlamps, the immobilizer system, and the seat belt warning system, etc. The Hon'ble CESTAT in the above case classified BCM, a similar product to that of iDB, under HSN 9032 by stating that: The impugned products do not control various types of machines. It controls various features of the car. Secondly, there are various features to be controlled for example automatic head light; automatic wiper control systems. Moreover, the desired factor to be controlled varies with the local situation. It is not at just one level that is predetermined. Thirdly, the impugned items gets inputs and compares them with the desired level and gives out put signals accordingly. This is a continuous one. Fourth....
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....anatory Notes is not fulfilled herein. Note 2(g) to Section XVII specifically excludes "Articles of Chapter 90" from the purview of Section XVII. Therefore, IDB cannot be classified under 8708. 3.3 Classification of iDB under 8413 as other reciprocating positive displacement pumps. From the analysis undertaken in the previous paragraph, it is evident that the subject product is appropriately classifiable under CTH 9032 8910. Without prejudice to our primary submission that the product is appropriately classifiable under Heading 9032, it is respectfully submitted that, in the alternative, should the Hon'ble Authority be of the view that the product does not fall under Heading 9032, the appropriate heading to classify the subject product is available under Chapter 84. Sequential Application of GIR's: If the subject product is not classifiable under CTH 9032 in accordance with GIR 1, the subsequent GIR's must be sequentially applied. GIR 2(a) deals with unfinished goods; the subject imported goods is a finished goods and capable of delivering the output it's intended for and thus, inapplicable to the case at hand. GIR 2(b) clearly stipulates that classifica....
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.... or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function. According to Note 3 of Section XVI, if a particular machine consists of two or more machines performing complementary functions, the composite machine must be classified as that individual machine that performs the principal function. The iDB, the commodity imported by the importer, is also a composite machine consisting of many machines such as Valve Block, Pump, Piston, Motor, etc. which performs complementary functions i.e., all these machines work in furtherance of regulating the brake fluid. Another Note that is of relevance is Note 4 of Section XVI which states that : Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function. In the case of iDB, there is a Stroke-Pressur....
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....nd other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function". Notwithstanding all its parts and functions, the product is basically an electrical hydraulic pump to control the brakes of a vehicle and, as such, is classified under Heading 84.13. Products of 84.13 are excluded from Section XVII (Vehicles, Aircraft, Vessels and Associated Transport Equipment) by Legal Note 2 (E) that excludes "Machines or apparatus of headings 84.01 to 84.79"." (Enclosed as Exhibit-17) From the above Rulings, it is evident that the exact same product manufactured by the Applicant's Parent Company Mando that is being imported by the Applicant was classified under HSN 8413 5090 by placing reliance upon Note 3 to Section XVI and its essential character. Therefore, the subject product is appropriately classifiable under HSN 8413 5090 in accordance with Note 3 & 4 of Section XVI and such a stand is both aligned with and supported by Rule 3(b) of the General Rules of Interpretation. 3.4 Classification of iDB under 8479 as Mac....
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....tioning, description or type. and (ii) No other heading covers it by reference to its use or to the industry in which it is employed. or (iii) It could fall equally well into two (or more) other such headings (general purpose machines). In order to classify a machine under heading 8479, the above mentioned conditions must be fulfilled. i. In compliance with the above mentioned clause (a), the subject product is not excluded by any note of Section XVI and Chapter 84. Thus, iDB fulfils the first condition. ii. In line with clause (b), the functions undertaken by the subject product is not covered under any specific heading. iDB functions as an advanced braking enhancer that automatically works when required. Such a function does not find a place in any of the headings. Therefore, iDB complies with the second condition as well. iii. In line clause (c), no other heading appropriately depicts the subject product's method of functioning or its usage. Moreover, in line with GIR 3(a), all the components in the subject product are to be considered as equally specific; thus, the subject product could equally fall under multiple headings. Th....
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....viso. This modularity aligns with Note B examples (e.g., chain cutters for sewing machines) in HSN Explanatory Note to Heading 8479, where devices perform standalone functions despite being mounted on host machinery. It would be to trite to note that the exact same product called "All in one Integrated Dynamic Brake" manufactured by the Applicant's Parent Company HL Mando, Korea was classified by the US Cross Ruling Authority under CTH 8479. (Enclosed as Exhibit 20). The same product dealt in the above ruling is being imported by the Applicant and thus, the ruling is applicable and have persuasive effect before this Hon'ble Authority for Advance Ruling. The US Advance Ruling Authority in NY N332229, held that: The all-in-one brake, Integrated Dynamic Brake, combines the functions of the conventional vacuum booster brake and electronic stability control (ESC). When the driver of the vehicle operates the brake pedal, the ECU detects it and generates hydraulic brake fluid pressure. In addition to its brake pressure generating function, the ECU performs control functions related to vehicle safety and stability (ESC). The ECU receives signals from various sensors ....
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....ing 8708, pursuant to the exclusionary provision set out in Note 2 to Section XVII of the Customs Tariff. Note 2(e) to Section XVII excludes machines and apparatus of headings 8401 to 8479 and Note 2(g) specifically excludes "Articles of Chapter 90" from the purview of Section XVII (Enclosed as Exhibit-22). Therefore, goods falling under 9032, 8413 and 8479 are completely excluded from being classified as a "part and accessory of Automobile" falling under 8708. In order to classify an Article under 8708, the below mentioned conditions as stipulated by WCO Explanatory Notes must be fulfilled (Enclosed as Exhibit-23): (i) They must be identifiable as being suitable for use solely or principally with the above-mentioned vehicles (8701 - 8705); and (ii) They must not be excluded by the provisions of the Notes to Section XVII. The subject product fulfils the first condition but fails to comply with the second condition. Article falling Chapter 90 and articles falling between 8401 and 8479 has been specifically excluded from being classified under 8708 even though it is used as part of the motor vehicles. Therefore, IDB cannot be classified under 8708. The Hon&....
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....iew of the above submissions, it is respectfully submitted that the subject product is primarily classifiable under HSN 9032, based on its fulfilment of the conditions stipulated under the relevant Section Notes. However, without prejudice to the primary classification, it is also submitted that the product may alternatively merit classification under HSN 8413 as the subject product is a Composite Good dealt under Note 3 and 4 of Section XVI. If the Hon'ble Authority is of the view that none of the headings appropriately depict the essential character or principal function of the subject product in line with Note 3 of Section XVI, iDB ought to be classified under HSN 8479 in accordance with Note 8 of Chapter 84. In light of the foregoing and to avoid any ambiguity in classification, we are seeking a ruling from the Authority to obtain clarity and ensure appropriate classification. 4. Port of Import and reply from concerned jurisdictional Commissionerate 4.1 The applicant in their CAAR-1 indicated that they intend to import the subject goods i.e. "iDB" at the jurisdiction of Office of the Commissioner of Customs, Chennai. The application was forwarded to the Office of the ....
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..... It connects directly to the brake pedal, master cylinder, hydraulic lines, and vehicle ECU, contributing inseparably to the brake system's operation. As per Supreme Court rulings in Pragati Silicon Put. Ltd. us. CCE (2007), a " part" is not normally used independently". The iDB's modularity (e.g., mechanical fallback in failure mode) does not exclude it; many brake parts like ABS modulators or boosters are classified under 8708 despite similar traits. * Technological Advancement Does Not Alter Classification: Modern brake systems evolve with electronics (e.g., ECU, sensors), but tariff identity remains based on principal function-braking. Courts in Intel Design Systems vs. CCE and CCE vs. Uni Products Ltd. emphasize that functional nexus to the principal machine (vehicle brakes) governs classification, not complexity. The iDB replaces traditional components (vacuum boosters, ABS units) into a single " 1- box" system, but its essence is brake actuation and regulation, not a standalone device. * Exclusion from Other Sections via Section XVII Notes : Note 2 to Section XVII excludes articles of Chapters 84, 85, and 90 only if they fit those headings better. ....
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.... Commissioner (2021), where ABS/ECU was excluded from CTH 9032 because regulation varies by external factors, not the controlled variable (braking) itself. * Not a Standalone Regulator : Unlike true process controllers (e.g., temperature regulators in Board's Order 49/3/97-CX), iDB lacks regulatory algorithms for continuous monitoring/maintenance; it actuates braking on demand. The pedal simulator provides "feel," but this is haptic feedback, not regulation. CESTAT in Commissioner us. Mobis India Ltd. (2021) classified BCM under 9032 for multi- feature body control, but iDB is brake-specific, not a general vehicle controller. * Exclusion by end-Use: Note 2(g) to Section XVII excludes Chapter 90 articles from vehicle parts only if they fit 90 better. Here, iDB's brake-centric function fits under CTH 8708 more specifically. Thus, CTH 9032 fails GRI-1; iDB is a brake actuator, not an industrial regulator. 4.4 Heading 8413 - This heading covers "Pumps for liquids, whether or not fitted with a measuring device, liquid elevators" - Not applicable The applicant invokes GRI 3(b) and Section XVI Notes 3/4, arguing the pump/piston gives "essential character....
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.... mode analysis-mechanical fallback proves iDB enhances, but remains integral to advanced braking. Thus, Heading 8479 is inapplicable; iDB has a defined brake function, not a residual one. 4.6 Based on the analysis of the above-mentioned paras, the General Rules of Interpretation (GRI), and relevant Harmonized System (HS) Explanatory Notes : The Integrated Dynamic Brake (iDB) appears to be rightly classifiable under Customs Tariff Item (CTI) 8708 3000 (corresponding to HS heading 8708.30: "Brakes and servo-brakes; parts thereof'), for the following reasons : i. It functions exclusively as a component of motor vehicle brake systems, integrating functions such as brake boosting (replacing traditional vacuum boosters) and electronic stability control (ESC) into a single unit. ii. It is unequivocally identifiable as a braking component due to its primary role in generating and modulating hydraulic braking pressure for vehicle wheels. iii. It does not meet the criteria for classification under alternative headings, including. 9032 (automatic regulating or controlling instruments), as it lacks the independent measuring, controlling, and operat....
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....dictional Commissioner has stated that iDB does not autonomously maintain brake fluid pressure at fixed setpoints; it responds proportionally to driver pedal input and vehicle signal (e.g., speed, rotation), not a pre-set desired value. Such an observation is factually incorrect. The Electronic Control Unit (ECU) in the iDB is pre-programmed with calibrated control parameters and response maps. For every defined input condition such as a specific magnitude of brake pedal force, the ECU is coded to generate a corresponding, predetermined hydraulic output. Thus, the functioning of the subject product is not a mere mechanical or proportional reaction, but a controlled regulation based on pre-determined setpoints and programmed values. The iDB, therefore, operates on the principle of automatic regulation as contemplated under the relevant tariff heading. Further, the Jurisdictional Commissioner has referred to the decision of Continental Automotive Breaking vs. Commissioner, wherein an observation was made with regards to the classification of ABS. The Hon'ble CESTAT made a mere observation excluding ABS from the purview of 9032 because the regulation varies by external facto....
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....under Para 2(C)(iii) makes it evident that the Jurisdictional Commissioner has wrongly interpreted the Applicant's Application. The learned Jurisdictional Commissioner has stated that the Applicant has invoked GRI 3(b) but such a statement is untenable for the reason that the Applicant has clearly submitted before this Hon'ble Authority in the Written Submission dated 13.01.2026, that the Subject product is appropriately classifiable under heading 8413 as per GRI 1 itself. This submission was neither countered nor dealt by the Jurisdictional Commissioner. GRI-1 stipulates that "classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes". In the instant case, Note 3 & 4 of Section XVI brings in a mandate that Composite Goods made out of multiple components ought to be classified in a particular manner. Note 3 stipulates that the entire composite good is to be classified as if consisting only of that component or as being that machine which performs the principal function. Since the Subject product is an integration of multiple components, Note 3 stipulates that the entire product is to be classified as that "Individ....
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....es for raising or otherwise continuously displacing volumes of liquids (including molten metal and wet concrete), whether they are operated by hand or by any kind of power unit, integral or otherwise. The above explanatory notes clearly specify that the pump falling under this heading can be operated by any means, i.e., through a power unit integral to it or through any other means of integration. In line with the above explanatory note, the pump in the subject product is integrated with multiple other components and all together operate the pump. Therefore, the argument that only those pumps that are standalone with independent commercial identify is covered herein is completely baseless. Most importantly, this heading has been proposed as per the condition stipulated under Note 3 of Section XVI. Note 3 & 4 are reproduced below: 3. Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the prin....
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.... be an electrical apparatus. However, the presence of the solenoids and valve body assembly add significant mechanical capabilities to this item and render the control box not "wholly electrical." We also note that the electrical functions of the control box are subsidiary because they only enhance the mechanical activities." From the above decision, it is amply clear that the Control Logic from the ECU is only subsidiary because of the fact that the ECU only enhances and aids the mechanical activities performed by the mechanical components. Therefore, the above statement of the Jurisdictional Commissioner is legally and technically flawed. Further, the primary argument of the Jurisdictional Commissioner against the proposed classification under heading 8413 is that the Applicant has misapplied the Essential Character. As per the learned Jurisdictional Commissioner, the essential character of the subject product is holistic function - braking regulation - not isolated pumping. It is their argument that, since iDB does braking regulation, it has to be classified as Brake. To reiterate the exact terms, the Jurisdictional Commissioner has stated that "Section XVI Note 3 requi....
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....n which are contained in New Tariff the matter of classification has to be considered in the light of the said rules. As indicated earlier, Rule 3 of the said rules contains the principles to be applied for classification of goods, which are prima facie classifiable under two or more headings. Since decorative laminates are composite goods made from different components, namely, paper and chemical solutions with which it is impregnated, the classification of decorative laminates has to be determined in the light of Rule 3(b). According to the said rule, composite goods consisting of different materials or made up of different components which cannot be classified by reference to sub- rule (a) shall be classified as if they consisted of the material or components which gives them their essential character insofar as this criterion is applicable. As a result to impregnation with the chemical solutions the character of paper is changed into decorative laminates and it is the chemical solutions which give them their essential character. As is evident from the above decision of the Hon'ble Supreme Court, when it comes to classification of a decorative laminates made of paper and ....
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....o the product their essential character. In the present case, if we keep in mind the manufacture of roofs, partitions etc., then the stiffness is the main attribute of such a product. The glass fibre mat when impregnated gives stiffness which helps in the manufactures of roofs, partitions etc., e.g., in the context of an insulation paper which is a composite of plastic and paper, the item will fall under Heading 39.01/06 of the previous Customs Tariff Act since plastic gives higher degree of insulation quality. Rule 3(b) requires classification based on the material which gives it the essential characteristics. This is the test of essentiality. The effect of the tariff schedule is to classify the products under different heads according to the character of the product. In interpreting a tariff entry, Rules for the Interpretation are helpful, particularly in cases of composite goods. In the aforesaid decision, the final product under consideration was glass fibres impregnated with resins/plastics. The determining factor was that the essential character of the composite product was stiffness, and such stiffness was imparted by the plastic component; mere glass fibres, by themselve....
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.... achieved by the Brake as claimed by the Jurisdictional Commissioner in previous Paragraph. The primary role is to generate brake fluid pressure and the same is achieved by the Pump. Moreover, there is no such component within iDB which can be construed or considered as a brake and thus, the entire argument of the Jurisdictional Commissioner is unsustainable. Finally, the Jurisdiction Commissioner has concluded by stating that "Heading 8413 is inapplicable; iDB is not a pump but an integrated brake system". It is true that iDB is not a pump but we emphasise that this is the individual component that depicts the essential character of the entire product as per Note 3 of Section XVI and in accordance with GRI 1 r/w. 3B. On the whole, the learned Jurisdiction Commissioner has failed to raise any relevant legal or factual counter to the proposed classification. Therefore, for the reasons stated above and in the previous Submissions before this Hon'ble Authority, the subject product is appropriately classifiable under CTH 8413 5090 as the same depicts the essential character of the subject product. 4.8.2 Para 2(C)(iv) - Comment against CTH 8479 8999: Without prejudice to th....
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....on from the host machine and that it does not play an integral role for the functioning of host machine. Here, iDB performs distinct function from the brake on which it is mounted as iDB merely undertakes pushing of brake fluid but what brake does it completely different (Activity that squeezes the Brake Disk to reduce the wheel speed). And iDB does not play an integral role as the ultimate braking function would work even when the iDB fails and the same been acknowledged by the Jurisdictional Commissioner. Further, the Jurisdictional Commissioner has stated that the iDB cannot function in isolation, it requires vehicle integration and performs no standalone task - its sole purpose is braking. The entire interpretation of the Jurisdictional Commissioner is misplaced, even when it cannot function in isolation, it would fall under 8479 as already stated. It need not do any standalone task, it should just do a distinct function than the host machine and that is squarely fulfilled by iDB. Therefore, the above statement of the Jurisdictional Commissioner is contrary to the position enumerated in the Explanatory Notes. Subsequently, the learned Jurisdiction Commissioner has brought....
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....product is held to be appropriately classifiable under any one of the proposed classification, i.e., 9032/8413/8479, the same would be excluded from the ambit of heading 8708. Therefore, the first condition is not fulfilled. Moving on to condition (b) which stipulates that the concerned product must be solely and principally used with articles of Chapter 86 to 88 (includes Cars, other automobiles, steering, gearbox, etc.). This requires the analysis of the subject product's usage and if the concerned product is solely and principally used with Automobiles, then this condition is fulfilled. Since it is beyond doubt that the subject product is designed and used solely for Automobile, the second condition is fulfilled. Moving to the condition (c), a bare perusal of the same would reveal that a product can be classified under 8708 only when the concerned product is not specifically included elsewhere. Therefore, the term "parts and accessories" under 8708 acts merely as a residuary entry and when a specific entry is available mentioning the description of the subject product, then the same must be classified under that specific heading and not under 8708. From the Uni Prod....
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....not be classified under the head "parts and accessories" and all the other conditions such as the "exclusionary clause" and "specifically included elsewhere" must also be cumulatively complied with. Further, the Jurisdictional Commissioner has stated that the subject product does not fit in any of the proposed headings and thus, no exclusion clauses kicks in. But it is evident that the Jurisdictional Commissioner has not brought in any relevant ground to rebut the Applicant's proposed classifications and thus, considering the fact that the subject product would appropriately fall under any of the proposed heading, iDB would stand excluded from the purview of heading 8708. The learned Jurisdictional Commissioner has reiterated that "iDB is marketed, imported and resold as an Automotive Brake System Component. It is not traded as a generic controller, pump, or appliance. Such a statement is baseless as already demonstrated, the subject product is classifiable as Pump for the sole reason that such a procedure is stipulated under Note 3 to Section XVI r/w. GRI 3(b). When such is the scenario, the Jurisdictional Commissioner had no reason to quote this as a reason to say that ....
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..... The learned AR contended that the subject goods merit classification under CTH 8413, more specifically 84135090 (other) due to the following reasons- (a) GIR-1, read with Note 3 and Note 4of Section XVI. (b) GIR-3b: Essential character of the product as pump. In support of their claim, they submitted a compendium of case laws in their additional submission which are covered in the paras above. They further contended that the subject goods will not appropriately fall under CTH 8479 or under CTH 8708. That the CTH 9032 (in terms of continental case, CESTAT) will also not be applicable. As the principal purpose/function of the product is pump hence CTH 8708 is not applicable. Moreover, the subject goods do not qualify for CTH 8708 as all the three conditions to satisfied to be classifiable under CTH 8708 is not fulfilled. They would submit that in case the CTH 8413 is not applicable, the CTH 8479 would alternatively be applicable. They relied upon several case laws including some US Cross Rulings in support of their contentions. 5.2 Nobody appeared on behalf of the department for the hearing. Discussion and findings 6.1 I have considered all the mate....
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.... unit controls the motor included in the hydraulic pressure generating unit based on the acquired pedal pressure information, rotational power of the motor is converted into linear reciprocating movement in order to pump brake fluid within the hydraulic line. * A pump piston serving as the final stage of the hydraulic pressure generating unit discharges the fluid through the hydraulic line to the caliper installed at the wheel of the vehicle to generate a braking force, and the electronic control unit controls the valve block that essentially regulates the amount and flow of brake fluid passing on to the calipers. * Here, the valve block is constituted by a plurality of valve units and its combined synchronous action regulates the flow of liquid. In such a braking process, the component called master cylinder consisting of a pedal simulator artificially induces pressure on the brake pedal in order to give a feeling to the user that the vehicle is stopping proportionally based on the amount of pedal pressure. This pedal simulator generates a pressure on the brake pedal to reduce the sense of difference in driving. * As depicted above, the whole function of....
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....able under CTH 8708 as it is not integral to the operation of the core braking system. Further, as per Note 2(e) to Section XVII excludes machines and apparatus of headings 8401 to 8479 and Note 2(g) specifically excludes "Articles of Chapter 90" from the purview of Section XVII (Enclosed as Exhibit-22). Therefore, goods falling under 9032, 8413 and 8479 are completely excluded from being classified as a "part and accessory of Automobile" falling under 8708. 6.8 In order to determine the correct CTH, I will discuss each and every CTH proposed by the applicant: 1. CTH 9032: Heading 9032 covers AUTOMATIC REGULATING OR CONTROLLING INSTRUMENTS AND APPARATUS and as per Note 7(a) of Chapter 90, the heading only covers - (b) instruments and apparatus for automatically controlling the flow, level, pressure or other variables of liquids or gases, or for automatically controlling temperature, whether or not their operation depends on an electrical phenomenon which varies according to the factor to be automatically controlled, which are designed to bring this factor to, and maintain it at, a desired value, stabilized against disturbances, by constantly or periodically measuring....
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....rolled, control unit and starting/stopping/operating device. In the present case, sensor measure the pressure applied by the applicant which is not the variable to be controlled. It is hydraulic brake fluid that is to be controlled by the ECU on the basis of preset value. Therefore, it is evident that the measuring and controlling variables are two different entities that so iDB does not qualify as Apparatus for automatically controlling liquids or gases or temperature. Further, iDB does not autonomously maintain brake fluid pressure at fixed setpoints; it responds proportionally to driver pedal input and vehicle signals (e.g., speed, rotation), not a preset "desired value." Braking is event-driven, not a stabilized process, as noted in CESTAT's Continental Automotive Brake vs. Commissioner (2021), where ABS/ECU was excluded from CTH 9032 because regulation varies by external factors, not the controlled variable (braking) itself. iDB is not a Standalone Regulator Unlike true process controllers (e.g., temperature regulators in Board's Order 49/3/97-CX), iDB lacks regulatory algorithms for continuous monitoring/maintenance; it actuates braking on demand. The pedal simu....
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....ther reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows : (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3 (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to 3 (a) or 3 (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. Heading 8413 covers sta....
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....ndustry in which it is employed. or (iii) It could fall equally well into two (or more) other such headings (general purpose machines). For this purpose, the following are to be regarded as having "individual functions" : (A) Mechanical devices, with or without motors or other driving force, whose function can be performed distinctly from and independently of any other machine or appliance. (B) Mechanical devices which cannot perform their function unless they are mounted on another machine or appliance, or are incorporated in a more complex entity, provided that this function: (i) is distinct from that which is performed by the machine or appliance whereon they are to be mounted, or by the entity wherein they are to be incorporated, and (ii) does not play an integral and inseparable part in the operation of such machine, appliance or entity. The subject goods i.e. iDB consist of mechanical and electronic components and cannot function individually means it cannot operate on its own, it requires vehicle integration (pedal, lines, ECU signals) and cannot perform any standalone task. Although the individual components or their corres....
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....ded the parts and accessories fulfill both the following conditions: (i) They must be identifiable as being suitable for use solely or principally 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). GRI Rule 1 is the first Rule to be considered in classifying any product. In other words, if the goods to be classified are covered by the words in a heading and the Section and Chapter Notes do not exclude classification in that heading, the heading would apply to the said goods. In case of any ambiguity in understanding the scope of entries in Tariff recourse is taken to the Harmonized Commodity Description and Coding System (Harmonized System or HSN) Hon'ble Supreme Court in multiple cases has underlined the importance of HSN Explanatory Notes as of significant guidance value in deciding the matters of classification under the Customs Act, 1962 and the Customs Tariff Act, 1975. The Integrated Dynamic Brake (iDB) is classifiable under Customs Tariff Heading (CTH) 8708, for the following reasons: i. In terms of HSN explanatory notes,....
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....of the whole without which whole cannot function. It is also observed that the subject goods are ancillary/enhancement feature in addition to the mechanical brakes, that is not an essential component to perform braking operation. The HSN explanatory notes encompasses only such parts and components that are used in these specified braking mechanisms. Accordingly, only those parts which are essential to, and operate within, the mechanical assemblies that perform the primary or resultant braking function would fall within the ambit of this entry, and not components which are merely ancillary in nature. The intended functionality of iDB being centered around enhancing performance, automation, and driver assistance, such a function is not an inevitable or necessary element of the basic braking process. Since the primary braking function remains unaffected by the failure of iDB, the primary functionality it provides cannot be regarded as a "part" of the brake system itself. Rather, it constitutes an auxiliary feature that supports, but does not define, the braking capability of the vehicle. Accordingly, iDB should be viewed as an auxiliary system, and not as a component that is ess....
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.... the subject items which are not included as per the Explanatory Notes cannot be considered as 'parts of clutch'. 9. In a manual transmission the gear shift is carried out by manually engaging and disengaging the clutch plate, in the automatic transmission system, the gear shifting is done automatically by the transmission control unit by sensing the speed of the vehicle on real time basis. In iMT the engagement and disengagement of clutch plate are done by the TCU through the Actuator. The Actuator therefore is not an integral part of a clutch, rather it is in the functional line of the TCU, which enhances, makes easy, improvise and facilitates engagement and disengagement of clutch plate; and as such they cannot be equated and fitted into the term of 'part'. We may consider the example of computer which was invented (by Charles Babbage), the operation was done through keyboard (teletype machines) and punch cards and computer mouse was not there. The Computer Mouse was invented during 1964. The mouse in a computer facilitates and makes easy the operation of the computer. The computer without mouse can also be operated using the keyboard but the mouse makes....
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....f the Entries in 8708, viz., 8708 7000 reads as "Road wheels and parts and accessories" which clearly shows that the Tariff mentions the terms "accessories" wherever the accessories of a part or component of an automobile is to be classified with that part or component. Hence, it is obvious that if an Entry is not having the term 'accessory', then the said Entry does not cover the 'accessory' of that component. Further, the Heading clearly differentiates a part or component from a "system" or "assembly". It is also a settled position of law that a statute has to be understood as per the wording and plain reading of the statute without imparting any intention or notion. Hence, when the Entry reads as "Clutch and parts thereof", it obviously does not cover 'Clutch System' or ' Clutch Assembly'. The term 'Clutch Assembly' or 'Clutch System' clearly denotes the entire/complete parts, components and items which are connected together to carry out the complete function of gear shifting. The function of shifting gear involves clutch, gear, transmission control unit, and sensor. The TCU, Gear and Sensor are not classified under CTI 8708 9300.....