2018 (1) TMI 1023 - AT - Customs

Classification of imported goods - resistor blower - Revenue entertained a view that it should be classified under CTH 84159000 as parts of other air conditioning machine etc , assessee claimed classification under heading 85334090 as other variable resistors under the main heading electrical resistors - Held that - HSN explains the scope of resistor falling under CTH 8533. The HSN note states that converter consisting of number of resistor with necessary switching arrangement still continue to be classified under 8533. It is also stated that certain resistor may be fitted with number of terminals to be included in the circuit. Switching or terminal arrangement for keeping in required combination of resistor into the circuit are also considered for classification under 8533 only. The present case, Note 2(a) has relevance and the impugned order correctly following the said Section Note alongwith explanation given under HSN to classify the resistor under Chapter 85. Appeal dismissed - decided against Revenue.

Summary

Issues:
Classification of resistor blower under CTH 84159000 or heading 85334090.

Analysis:

1. The dispute in this case revolves around the correct classification of a "resistor blower" imported by the respondent, who is engaged in manufacturing parts and accessories for automotive air conditioning systems. The Revenue argued for classification under CTH 84159000 as "parts of other air conditioning machines," while the respondent claimed classification under heading 85334090 as "other variable resistors under electrical resistors." The original authority ruled against the respondent, and on appeal, the Commissioner (Appeals) upheld the classification under Chapter 85. The Revenue, aggrieved by this decision, filed an appeal.

2. The Revenue contended that the resistor blower should be classified as part of an automotive air conditioner under Chapter 84, relying on a Tribunal decision and an opinion from the Department of Electronics and Information Technology. The respondent argued that the end use of the imported goods, being a combination of resistors, should not solely determine classification. They referenced Note 2(a) of Section XVI of the tariff, emphasizing that parts falling under Chapter 84 or 85 should be classified accordingly. The respondent also highlighted the technical specifications of resistors and the applicability of Note 2(a) in the classification process.

3. The Tribunal examined the classification in detail, considering the principles outlined in the Harmonized System Nomenclature (HSN). The opinion from the Department of Electronics and Information Technology was deemed irrelevant in the classification process, as the HSN specifies the scope of resistors classified under heading 8533. The Tribunal noted that the end use of the resistor blower in automobiles was not contested, but the key issue was whether this usage should dictate classification over the nature of the product as a resistor.

4. Reference was made to Section Note 2(a) and 2(b) in the case, with the Tribunal emphasizing the need to exhaust the possibilities under Note 2(a) before resorting to Note 2(b) for classification. Citing previous judgments, including one by the Supreme Court, the Tribunal underscored the importance of correctly applying Note 2(a) before considering alternative classification rules. In this case, the impugned order correctly followed Section Note 2(a) and the HSN explanation to classify the resistor blower under Chapter 85, leading to the dismissal of the Revenue's appeal.