TaxTMI 
TaxTMI 
2026 (8) TMI 738
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....Notes, but constituted "parts and accessories of motor vehicles", specifically 'body control systems', classifiable under CTH 8708 9900, attracting higher BCD and IGST. Accordingly, a Show Cause Notice dated 01.09.2021 demanded differential customs duty of Rs. 1,22,76,931/- with interest and proposed confiscation and penalty. By the impugned order, the Principal Commissioner rejected the appellant's classification, reclassified the goods under CTH 8708 9900, confirmed the duty demand with interest, but dropped the proposal for penalty under Section 112(a) of the Customs Act, 1962. Aggrieved, the appellant has filed the present appeal. 3. Ms. Swetha R.S., ld. Advocate appeared for the appellant and ld. Authorized Representative Smt. Anandalakshmi Ganeshram appeared for the respondent-department. Submissions made by the Appellant 3.1 Ms. Swetha R.S. ld. Advocate at the outset submitted a chart giving a summary of the impugned goods imported by them under CTH 90328910: Bills of Entry Customs Notification No. IGST Notification No. Rate of Duty 76 Sl. No. 953 of Customs Notification No. 152/2009 Sl. No. 422 in Schedule - III of Notification No. 01/2017 ....
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....epend on the nature and function of the goods, not merely their end use. I. Classification under Heading 8708 ignores GIR 1 and the relevant Section and Chapter Notes. Note 2(g) to Section XVII expressly excludes Chapter 90 goods from Chapter 87, making BCM/IBU and TPMS classifiable under Heading 9032. Reliance is placed on Coen Bharat Ltd. v. CCE. J. Section XVII Note 2(g) overrides Note 3 and excludes regulating apparatus of Chapter 90 from Heading 8708. BCM/IBU and TPMS measure variables, compare them with preset values, and control outputs, thereby satisfying the description of automatic regulating apparatus under Heading 9032. K. BCM/IBU and TPMS satisfy Note 7(b) to Chapter 90 as automatic regulating apparatus. They autonomously regulate functions such as wipers, climate control, lighting, and tyre pressure by measuring variables and issuing electrical impulses. The Explanatory Notes to Heading 9032 support classification under CTH 9032. L. The Department has consistently classified similar goods under CTH 9032 through assessed Bills of Entry and unchallenged adjudication orders, including orders relating to BCMs, Airbag Control Units, and ....
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....operates at voltages below 1000V. G. As per international classification practices, including US Customs and European Union rulings, similar automotive electronic control units, including Body Control Modules and Powertrain Control Modules, have been classified under tariff headings corresponding to CTH 8537 and not under Heading 9032. [Ruling No. HQ H222091 dated 25.04.2016 by the US CBP- Customs; US Customs Ruling N244506 dated 28.08.2013; European Union classification; European Union Customs BTI reference ROBTI2019/003339 12.08.2019] H. In Siemens Ltd. Vs CCE (2014-TIOL-157-CESTAT-MUM), the Tribunal held that programmable logic controllers are classifiable under CTH 8537 and not under CTH 9032, observing that classification under Heading 9032 requires continuous measurement and regulation of process variables, a condition which, according to the Department, the BCM/IBU does not satisfy. I. The Ld. A.R. various has submitted various charts and images during the hearing from general sources to explain the functions of the machines. She stated that the items Viz. IBU & BCM are only "Programmable Controllers". J. The Ld. A.R. submitted that the re....
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....ts or apparatus of Chapter 90 and numerical control apparatus, other than switching apparatus of heading 8517 8537 10 00 - For a voltage not exceeding 1,000 V 8537 20 00 - For a voltage not exceeding 1,000 V 6. The exemption / concession of Import duty claimed by the appellant as per Sl. No. 953 of Notification No. 152/2009-Customs dated 31.12.2009 (as amended) is reproduced below:- Sl. No. Chapter, Heading, Sub-heading or Tariff Item Description of goods Rate (in percentage unless otherwise specified) 953 903289 All goods 0.0 7. Para 28 of the impugned order states the functions of the said products and is reproduced below; "28. Before delving into the classification, the nature of the product has to be known. The show cause notice has itself furnished the details of function of the impugned products. It goes like this: "the functions of the items "Unit assy -IB.U & Unit assy -B.C.M which are as follows: i) It is a comprehensive body control module system which is aimed at communicating and integrating the work of all electronic modules through the vehicle bus j) BCM is an embedded system tha....
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....perform actions in the vehicle such as locking the doors or dimming the interior lighting etc". From the above, especially bold ones, that the impugned products control the various features of an automobile. No where there is talk about the involvement of human interface in the operation viz.,a wiper, automatic head lights, etc. Therefore, it becomes obvious that the impugned products function namely control of the various features of the car without any human interface and thus automatic. The functional description clearly states that the impugned goods are multi-faceted electronic components that supports multiple functions, the foremost being the monitoring, controlling and regulating a gamut of automotive body electronics. In a contrast Programmable Controller or Programmable Logic Controller of Heading 85.37 is generally seen in industrial automation, responsible for processing inputs, executing logic-based control programs, and generating outputs to control machinery and systems. From the examples of case study at para 9 of the impugned order it is seen that the impugned goods contains a measuring device which measure desired parameters with actuals and when....
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.... (i) The programmable controllers covered under heading 85.37: They perform specific functions such as logic instruments timing etc. to control various types of machines in a plant. (ii) The automatic regulating or controlling instruments and apparatus under heading No. 90.32: They may be considered as industrial process control systems satisfying criteria mentioned in No. 90.32. These are primarily used for controlling/maintaining the flow, level, pressure or variables of liquids or gases or for automatically controlling temperature of a process (may be refinery, steel, chemical industry) at the present level. They can perform functions both sequence logic and different control strategies like Proportional-integral differential (PID) control and other forms of control. The Ld. Commissioner has examined the functions of the impugned goods with the above circular at para 34 and 35 of the impugned order which is reproduced below. "34. 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 s....
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....he aforesaid Final Order. 6. The classification of the Tyre Pressure Monitoring System (T.P.M.S.) did not fall for consideration in the above Final Order No. 40800/2025. 6.1 We find that the said items has been grouped together with the Unit Assy - BCM (Body Control Module) and Unit Assy - I.B.U. (Integrated Body Unit), covered by the impugned order, and treated as a species of Electronic Control Unit (ECU). The appellant has classified the goods under Tariff Item 9032 8910. 6.2 We find that neither the show cause notice nor the impugned order sets out the functional characteristics of the T.P.M.S. as part of the foundational facts necessary to justify its proposed classification under Tariff Item 8708 9900. The description and functioning of the product appear only in the Appellant's reply dated 04.06.2024, referred to in paragraphs 11(xiii) to (xv) of the impugned order. Beyond describing the product in general terms as an ECU, the impugned order contains little independent analysis of its nature, functions or the basis for its classification. In Hyundai Motors (supra), the Tribunal speaking through one of us [Shri M. Ajit Kumar, Member (Technical)], after examining ....