2021 (9) TMI 321 - AAR - Customs

Classification of imported goods - chairs in disassembled form - whether the chairs proposed to be imported would merit classification under sub-heading 94013000 of the first schedule to the Customs Tariff Act, 1975 as swivel seat with variable height adjustment? - HELD THAT - Going by the description of the sub-heading, i.e., swivel seats and variable height adjustment, it is clear that without the seat, which is going to be procured domestically and used in the assembly process post import, it has to be concluded that applying the principle that classification of goods need to be done in the state in which the goods are imported, the essential character of a swivel seat is not achieved. There appears to be no doubt that the components of swivel seats/chairs proposed to imported are specifically designed for manufacture/assembly of goods described under the sub- heading 94013000 - it is concluded that heading 9401 is the appropriate classification for the components of swivel seats in disassembled state, the only possible entry at eight-digit level is 94019000. The components of swivel seats/chairs, proposed to be imported by the applicant in dis-assembled form, merit classification under sub-heading 94019000 of the first schedule to the Customs Tariff Act 1975.

Issues: Classification of imported chairs under Customs Tariff Act, 1975

Issue 1: Classification of imported chairs under sub-heading 94013000
The applicant, engaged in manufacturing office furniture, sought an advance ruling on whether chairs imported in disassembled form should be classified under sub-heading 94013000 of the Customs Tariff Act, 1975. The applicant argued that the imported chairs, when assembled, would have essential characteristics of a swivel seat with variable height adjustment, falling under the said sub-heading.

Analysis: The applicant contended that the imported chairs, consisting of various parts like seat mechanism, arms assembly, etc., would be assembled in India before supply to customers. The legal provisions and interpretative rules were cited to support the classification of goods as presented to the customs officer. The applicant emphasized that the unfinished chair, even in disassembled form, would qualify as a swivel seat under sub-heading 94013000.

Issue 2: Examination of components for classification
The Authority examined the list of components required for chair assembly, distinguishing between imported and domestically procured parts. The applicant clarified that the imported components would be used directly for assembly without further processing and would match the intended number of chairs to be manufactured in India.

Analysis: The Authority scrutinized the components and noted that the imported parts, along with domestically procured ones, could enable the assembled product to stand on the floor or ground, as mandated by the relevant chapter note. However, the crucial aspect was whether the assembled components could assume the character of swivel seats, especially without the seat component, which was to be procured domestically.

Issue 3: Determination of appropriate classification
The Authority reviewed the General Rules for Interpretation of Import Tariff and HSN Explanatory Notes to assess the classification of the imported components. The key consideration was whether the components, when assembled, could achieve the essential character of a swivel seat as per the sub-heading 94013000.

Analysis: Despite the applicant's arguments, the Authority concluded that without the seat component, essential to a swivel seat, the classification under sub-heading 94013000 was not warranted. Based on the specific design of the components for assembly, the appropriate classification was determined to be under sub-heading 94019000, considering the components' intended use for manufacturing chairs.

In conclusion, the Authority ruled that the components of swivel seats/chairs, imported in disassembled form, should be classified under sub-heading 94019000 of the Customs Tariff Act, 1975.

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