2023 (9) TMI 1262 - AAR - Customs

Classification of goods intended to be imported - stepper motor for idle air control valve - classifiable under Tariff Item 8409 91 99, Tariff Item 8409 99 90, Tariff Item 850110 12 or Tariff Item 8481 90 90? - HELD THAT - From the M.F. (D.R.) Instruction No. 1/2022-Cus., dated 5-1-2022, it is observed inter alia that the Hon ble Supreme Court vide judgment in the case of Westinghouse Saxby Farmer Ltd. v. Commissioner of Central Excise, Kolkata 2021 (3) TMI 291 - SUPREME COURT , held that the relay are classifiable as parts of railway signaling equipment under Heading 8608 of the Central Excise Tariff; in holding so, the Hon ble Supreme Court has given precedence to the sole or principal use test of Section Note 3 over the Note 2(f) of Section XVII which specifically excluded electric equipment from being classified under Section XVII whether or not it is identifiable as being for the goods of that Section. Hon ble Court in the case of A. Nagaraju Bros. v. State of A.P. 1994 (7) TMI 88 - SUPREME COURT and Commissioner of Central Excise, Mumbai v. M/s. Fiat India (P.) Ltd. 2012 (8) TMI 791 - SUPREME COURT and stated, thus, the classification of various parts of Section XVII is to be decided taking into account all facts, details of individual cases, all the decisions on the subject, and arrive at the appropriate classification. The stepper motor (3800-B07F-0000) proposed to be imported by the applicant for use in manufacture of idle air control valve will be classifiable under sub-heading 8501 10 12 of the First Schedule to the Customs Tariff Act, 1975.

Summary

Issues Involved:
1. Classification of the stepper motor (3800-B07F-0000) for use in the manufacture of idle air control valve under various Tariff Items.

Issue-wise Detailed Analysis:

1. Classification of Stepper Motor:
The primary issue revolves around the classification of the stepper motor (3800-B07F-0000) intended for use in the manufacture of idle air control valves. The applicant proposed several potential tariff items for classification: 8409 91 99, 8409 99 90, 8501 10 12, and 8481 90 90. The applicant emphasized the functionality of the stepper motor, detailing its role in the internal combustion piston engine, specifically in the throttle body assembly and idle air control valve (IACV). The stepper motor, being a brushless direct current (DC) motor, converts electrical energy into mechanical power, which is crucial for the operation of the IACV.

2. Principal Commissioner's Comments:
The Principal Commissioner of Customs opined that the stepper motor should be classified under CTH 8501 10 12. This classification is supported by Rule 3(a) of the General Rules for Interpretation, which states that the heading providing the most specific description should be preferred. The Principal Commissioner highlighted that the stepper motor, being a brushless DC motor that divides a full rotation into equal steps, fits the description under CTH 8501 10 12.

3. Applicant's Submissions and Personal Hearing:
During the personal hearing, the applicant's advocate elaborated on the reasons for seeking an advance ruling and the functionality of the stepper motor. The advocate submitted various documents, including Section Notes, Chapter Notes, HSN Explanatory Notes, and judicial pronouncements, to support their claim for classification under heading 8501. The advocate emphasized that the stepper motor's function should take precedence over its end-use in the classification process.

4. Legal Provisions and Precedents:
The ruling considered Rule 3 of the General Rules for the Interpretation of Import Tariff, which prioritizes the most specific description in cases where goods are prima facie classifiable under multiple headings. Additionally, Note 2(j) of Section XVII excludes electrical machinery or equipment (Chapter 85) from being classified as parts under Section XVII, reinforcing the classification under Chapter 85.

5. Ruling:
Taking into account the submissions from both the applicant and the Principal Commissioner, the ruling concluded that the stepper motor (3800-B07F-0000) should be classified under sub-heading 8501 10 12. This decision aligns with the specific description provided for stepper motors under this sub-heading and adheres to the principles of classification as per the General Rules for Interpretation and relevant legal notes.

Conclusion:
The stepper motor (3800-B07F-0000) proposed for import by the applicant for use in the manufacture of idle air control valves is classifiable under sub-heading 8501 10 12 of the First Schedule to the Customs Tariff Act, 1975.