2024 (2) TMI 1142 - AT - Customs

Challenged the rejection of classification - Goods imported for use as parts of motor vehicles - Commissioner relied on note 3 to section XVII to arrive at the distinguishing factor between the classification of the impugned goods in chapter 87 vis-a-vis chapter 84, 85 and chapter 72 onwards - HELD THAT - Similar matters have been examined earlier in appellants own case as well as the case of Suzuki Motors Gujarat Pvt Ltd. 2022 (6) TMI 1089 - CESTAT AHMEDABAD . It is noticed in the impugned order, that there were specific averment made by the appellants before Commissioner regarding satisfactions of all 3 conditions. The same has also been recorded in the impugned order however, the impugned order presumes that note 3 to Section XVII can override note 2 to section XVII. Note 3 only make the distinction in case of disputes in classification within chapter 86 to 88. It does not apply to the disputes involving classification in chapters other than chapter 86 to 88. Thus, if a item can be used in a car as well as in a railway loco motive than the classification has to be done with the heading for which it is used solely or principally. This note does not apply to chapter other than chapter 86 to 88. Thus, the impugned order is set aside and matter remanded to original adjudication authority for fresh adjudication in the light of the decision of tribunal in appellant s own case as well as in the case of Suzuki Motors Gujarat Private Limited. 2022 (6) TMI 1089 - CESTAT AHMEDABAD . Appeal is allowed by way of remand.

Summary

Issues involved:
Classification of goods imported for use as parts of motor vehicles challenged by the appellant.

Details of the judgment:

1. Classification Criteria:
The dispute revolves around the classification of goods imported for use as parts of motor vehicles. The impugned order considered Rule 1 of the general Rules of interpretation, notes 2 and 3 to section XVII of Customs tariff. The Commissioner relied on note 3 to section XVII to distinguish the classification of the impugned goods in chapter 87 from other chapters. Previous decisions in similar matters have been remanded for further examination based on specific criteria laid down in the orders.

2. Explanatory Notes Analysis:
The HSN explanatory notes emphasize that parts and accessories of motor vehicles must fulfill specific conditions for classification under heading 8708. These conditions include suitability for use solely or principally with the mentioned vehicles and compliance with exclusion provisions. The Commissioner's findings lacked clarity on whether the disputed goods met these crucial conditions, necessitating a reevaluation.

3. Legal Aspects Evaluation:
The Tribunal observed that the lower authorities failed to adequately analyze the legal aspects essential for determining the correct classification of the goods. The impugned order did not thoroughly discuss the criteria specified in the Harmonized System of Nomenclature explanatory notes, highlighting a gap in the classification process.

4. Remand Decision:
Considering the shortcomings in the classification process, the Tribunal set aside the impugned order and remanded the matter to the original adjudication authority for a fresh evaluation. The decision emphasized the need to follow the criteria established in previous orders for accurate classification of goods imported as parts of motor vehicles.

5. Conclusion:
The appeal was allowed by way of remand, with the matter directed back to the Commissioner (Appeals) for a thorough reconsideration in line with the Tribunal's decisions in similar cases. The judgment was pronounced in open court on 22.02.2024.