9911796707
TMI Blog2019 (4) TMI 1941X X X X Extracts X X X X X X X X Extracts X X X X ..... supplied to railways. Thus, the goods which would be supplied from the unit at Pathredi to the unit situated in Chennai cannot be classified under chapter 86; hence, they would attract the general applicable rate of duties as per the classification of each item in their respective chapters. - HAR/HAAR/R/2018-19/51 - - - Dated:- 24-4-2019 - SANGEETA KARMAKAR AND /MADHUBALA, MEMBER Present for the Applicant : Sh. Pulak Saha (C.A.) 1. Brief statements of facts: 1.1 M/s. JSL Lifestyle Limited, Village Pathredi, Bilaspur-Tauru Road, Gurugram, Haryana (hereinafter referred to as 'Applicant') is engaged in manufacture and supply of various parts and components of railway coaches to the Indian Railways. The parts and components include roof assembly, retention tank, toilets, side wall assembly, end-walls, carlines, partition profiles, roof-arch etc. (hereinafter referred as 'Rail Coach Components') which are manufactured according to the specifications and drawings provided by the Indian Railways, which are classified under customs tariff item 8607 99 10 of the First Schedule of the Customs Tariff Act, 1975. 1.2 On 23.07.2018, the Indian Railways ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chennai and ultimately supplied to the Integral Coach Factory, Chennai therefrom and they have applied for the determination of tariff classification of goods supplied from the Pathredi Unit to Chennai Unit. 3.2 The applicant proposes to manufacture the sub-assemblies in Pathredi which would be dispatched in un-assembled condition to Chennai. These un-assembled sub-assemblies would also be conforming to the drawings and specifications provided by the Indian Railways, each having a unique drawing number. Upon receipt in Chennai, these goods would be assembled together to form complete assemblies i.e. Roof assembly, Roof End assembly etc. In Chennai, the applicant would undertake welding, painting, testing and final inspection of the assemblies. 3.3 Ultimately, the Chennai unit would deliver the assemblies to the Indian Railways, where the goods would be billed to JSL Limited, Pathredi and supplied to the Integral Coach Factory, Chennai. The entire process of assembly in Chennai is being proposed for the sake of convenience of transport and just in time delivery. 3.4 The applicant is supplying their goods i.e. Sub-assembly majorly made of steel to their own unit in Chennai a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, Fabrication, welding, painting, leakage testing and final inspection of the assemblies and this process appears to be major process of manufacturing and after that the Coaches will be supplied to Indian Railways. Here in Chennai, assembly operation as well as addition of components is being done to prepare the parent assembly. 3.9 Now, it is pertinent to discuss the General Rules for The Interpretation of The Harmonized System as per WCO to reach the classification of the goods supplied from the Pathredi Unit to Chennai Unit of the applicant. The relevant portions of General Rules for The Interpretation of The Harmonized System is reproduced below : 3.9.1 General Rules for the Interpretation of the Harmonized System: Classification of goods in the nomenclature shall be governed by the following principles: RULE 1 The titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions. EXPLAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the headings or Notes do not otherwise require. RULE 2 (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that Article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3. 3.9.2 The explanatory notes to Rule 2 (a) for Incomplete or unfinished articles for Articles presented unassembled or disassembled is under: RULE 2 (a) (Incomplete or unfin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thereafter being supplied to Indian Railways. Therefore, the goods supplied from Pathredi Unit to Chennai Unit cannot be classified in the same heading as the assembled article is classified. 3.11 Further, as per para 4 of the Circular No. 30/4/2018-GST dated 25.01.2018 issued by CBIC, it has been clarified that: Only the goods classified under Chapter 86 supplied to the Railways attract 5% GST rate with no refund of unutilized input tax credit and that Other goods ( falling in any other chapter ) would attract the general applicable rates to such goods, even if supplied to railways. 3.12 In view of the above, it is clear that the goods which would be supplied from the unit at Pathredi to the unit situated in Chennai cannot be classified under chapter 86; hence, they would attract the general applicable rate of duties as per the classification of each item in their respective chapters. 4. Ruling: So, in light of the above discussion and findings, the Ruling of the Authority on the question raised in the application is as under: 4.1 The goods which would be supplied from the unit at Pathredi to the unit situated in Chennai cannot be classified under chapter 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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