2024 (8) TMI 616 - AAR - Customs

Classification of Tire Pressure Monitoring Sensors (TPMS) and Differential Pressure Sensors (DPS) - to be classified under Heading 9031 or under sub-heading 9026 20 00 of the first schedule of the Customs Tariff Act, 1975? - HELDTHAT - The devices are used for measuring the pressure of gases. They are fitted with sensors sensitive to the variations in pressure. Heading 9026 covers instruments and apparatus like manometers for measuring or checking the pressure of liquids or gases. Pressure gauges indicate the pressure of a liquid or gas in a closed space. One of the types of pressure gauge, as per explanatory notes is an electrical pressure gauge based on variations of an electrical phenomenon (e.g., resistance, capacitance) or using ultrasound. Further, Heading 9026 also includes differential pressure gauges used to measure pressure differences. The devices under consideration use electrical phenomena to measure the pressure. Therefore, these instruments can be classified under Heading 9026. Sub-heading 9026 20 00 specifically includes instruments for measuring or checking the pressure. In the case of COMMISSIONER OF CUSTOMS, BANGALORE VERSUS SPM INDIA LTD. 2006 (12) TMI 368 - CESTAT, BANGALORE , the issue of classification of air leak tester was under consideration. It was observed by the Hon ble Tribunal that the air leak tester is a high precision measuring instrument and can be classified under Heading 9026, and that when there is a specific entry, there is no need to choose a residual entry under Heading 9031. Accordingly, the Hon ble Tribunal ruled that the Heading 9026 as an appropriate heading for air leak tester. The issue of classification of water sensors used for monitoring and detecting the presence of water in the fuel feed system under consideration. The Hon ble Tribunal, observed that as the device does not have controlling and operating functionalities, they are not classifiable under sub-heading 9032 as an automatic controlling instrument and is eligible for classification under Tariff Item 9026 80 90 of the Tariff Act, 1975. The Tire Pressure Monitoring System (TPMS) and Differential Pressure Sensor (DPS) merit classification under sub-heading 9026 20 00 of the first schedule of the Customs Tariff Act, 1975.

Summary

Issues Involved:
1. Classification of Tire Pressure Monitoring Sensors (TPMS)
2. Classification of Differential Pressure Sensors (DPS)

Issue-wise Detailed Analysis:

1. Classification of Tire Pressure Monitoring Sensors (TPMS):

The applicant, a leading automobile manufacturer, seeks classification for TPMS, which is imported as a pre-assembled unit consisting of a pressure valve and a sensor. The TPMS monitors tire pressure and updates the driver about any irregularities. The applicant argues that TPMS should be classified under heading 9026 20 00, which pertains to instruments for measuring or checking pressure.

The Authority noted that TPMS is a combination of a pressure valve and a sensor, with the sensor component constituting 96% of the total value. The TPMS is used to measure and transmit tire pressure data, fitting within the definition of instruments under heading 9026. The Authority also referenced previous rulings, including the Tata Motors case, which classified similar systems under the same heading.

2. Classification of Differential Pressure Sensors (DPS):

The applicant also seeks classification for DPS, used in diesel vehicles to measure the differential pressure in the Diesel Particulate Filter (DPF) to reduce emissions. The DPS measures the pressure difference between the inward and outward flow of exhaust gases and relays this data to the Engine Control Unit (ECU).

The Authority found that DPS is solely capable of measuring pressure and does not perform any control functions. As such, it fits the description of instruments under heading 9026, specifically sub-heading 9026 20 00, for measuring or checking pressure. The Authority referenced the Premier Instruments & Controls Ltd. case, which distinguished between instruments classified under Chapter 90 and parts classified under Chapter 87, concluding that DPS should be classified under heading 9026.

Legal Framework and Deliberations:

The Authority examined the Customs Tariff Act, 1975, and relevant HSN explanatory notes. It considered whether the devices should be classified as instruments for measuring pressure (heading 9026) or as parts and accessories of vehicles (heading 8708). The Authority concluded that TPMS and DPS are excluded from heading 8708 due to their specific classification under heading 9026, as per Note 2 to Section XVII and the explanatory notes.

Rulings and Precedents:

The Authority reviewed case laws, including the Premier Instruments & Controls Ltd. and SPM India cases, which supported the classification of high-precision measuring instruments under heading 9026. The Authority also considered its previous ruling in the Tata Motors case, which classified similar systems under sub-heading 9026 20 00.

Final Ruling:

The Authority ruled that both the Tire Pressure Monitoring System (TPMS) and Differential Pressure Sensor (DPS) merit classification under sub-heading 9026 20 00 of the first schedule of the Customs Tariff Act, 1975.