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TMI Blog2021 (8) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... sories that enhance their functional value - Even in general trade parlance or in terms of their specific usage, the 'seat covers' are considered as accessories and customized as per the preferences of the clients. Trade circles consider the automotive accessories as a category of articles relating to non-essential automotive parts which embellish the look and feel of an automobile or add functionality. 'Seat covers' provide new look to the interior of the car, and also make it more comfortable for passengers. Car seat covers were classified under heading 87.08 as accessories of car seats vide Guru Overseas Private Limited Vs. Commissioner of Central Excise [ 2001 (5) TMI 87 - CEGAT, COURT NO. IV, NEW DELHI] - It was further strengthened by a clarificatory circular issued by CBEC vide circular no.541/37/2000-CX dt:16.08.2000, in which it was clearly mentioned that car seat covers were classified under heading 87.08 as accessories of car seats. Car seat covers fall under the entry at Serial No.170 under HSN 8708 Schedule IV of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 attracting tax rate of CGST+SGST @ 28% - SI.No.435A of Schedule IV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. However, the tax rate of said entry underwent a change vide Notification No.41/2017-Central Tax (Rate) dated 14.11.2017 reducing the tax rate to 18%. 3.4 The applicant claims that as the tax has been paid so far under HSN 8708, the benefit of reduction in rate of CGST/SGST will be applicable to the applicant if the correct classification is adopted. 4. Questions raised before the authority: 1. Whether the product namely 'Car Seat Covers' merits classification under HSN 9401? If not, what is the correct classification applicable to 'Car Seat Covers'? 2. Is SI.No.435A of Schedule IV of the Notification No 1/2017-Central Tax (Rate) dt: 28.06.2017 applicable to 'Car Seat Covers'? If not, what is the applicable entry under the said Notification? On Verification of basic information of the applicant, it is observed that the applicant falls under Central jurisdiction, i.e. Superintendent of Central Tax (CT), Hindupur-2 Range, Anantapur Division. Accordingly, the application has been forwarded to the jurisdictional officer and a copy marked to the State Tax authorities to offer their remarks as per Sec. 98 (1) of CGST /APGST Act 2017. In resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et into the most comfortable seating inside the car as per their convenience, which does not absorb heat; Car seat covers are required for the protection of seats. Covers do not absorb heat and hence, keep the car cool and user comfortable. 5.4 The applicant submits that keeping in mind the above functions, the product must be classified under Serial No.434A of Notification No. 1/2017 Central Tax (Rate) dt: 28.06.2017. The necessary concomitant which follows is that if 'seat covers' is classified under Serial No. 435A under Chapter 94, the applicable net rate would be 18%. 5.5. The applicant states that for any product to classify under Chapter 9401 90 00, the same has to be in the nature of 'part' of 'seats'. Hence, the connotation of the word 'part' has to be analysed. Reference in this regard is placed in the case of Pragati Silicons Pvt Ltd v Comm. Of Central Excise, Delhi [2007 (211) ELT 534 (SC)] wherein while determining as to whether 'name plates' form 'part' of a motor vehicle or not, it was observed that: part is an element of a sub-assembly, not normally useful by itself and not amenable to furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at assist in operating or controlling the tone resources of an organ'. 'Accessories' are not necessarily confined to particular machines for which they may serve as aids. The same item. may be an accessory of more than one kind of instrument. 5.10. Based on the above case laws and the actual nature of the product, it can be summarized that 'accessory' per se is something which is complimentary to the main product. But at the same time, it is something which can be used in various equipments or machines or commodities. However, the 'car seat covers' in question can only be used with 'seats' and nothing else. They are manufactured keeping in mind the requirement of the protection of car seats and are designed in a way so that they can be affixed only with 'seats'. Hence, they cannot be termed as mere 'accessory'. As a corollary, if the 'seat covers' in question do not qualify as 'accessory', the same has to be classified as 'part' at Serial no. 435A ender Chapter 94 of Notification No.1/2017 Central Tax (Rate) dt:28.06.2017 as amended by Notification No. 41/2017- Central Tax (Rate) Dated 14.11.2017. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication under HSN 9401. It is stated that 'seats' are not to be judged only on the basis of their affixing to a motor vehicle. It has to be seen as a whole and a 'seat' would be complete only when the products in question are affixed to a 'seat'. 5.14. Further, Explanatory Notes to Chapter 94 states that The heading also covers identifiable parts of chairs or other seats, such as backs, bottoms and arm-rests (whether or not upholstered with straw or cane, stuffed or sprung) and spiral springs assembled for seat upholstery. Further, Explanatory Note to Chapter sub-heading 9401.80 states that This sub heading also covers safety seats suitable for the carriage of infants and toddlers in motor vehicles or other means of transport. They are removable and are attached to the vehicle's seats by means of the seat belt and a tether strap. 5.15. The applicant has submitted that 'seat covers' form 'part' of the seat. The explanatory notes specifically mentions that arm-rests, bottoms and backs attached to 'seats' are to be classified under this heading. Much like bottoms, arm-rests and backs, the 'seat covers' in question a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax [1981 (8) ELT 325 (SC)] and Commissioner of Sales Tax vs Macneill Barry Ltd [1986 (23) ELT 5 (SC)]. Applying common parlance test to the present factual scenario, it is to be analysed as to how the products in question are treated in the market. It can be said that the products in question by their very nomenclature give the impression that the same are treated as 'part' of 'seats'. Even otherwise, the products in question are manufactured in conjunction with 'seats' by the applicant. 5.19. The applicant further submits that the last test which can be applied for classification is the usage test, i.e., the products in question has to be classified as per their specific use in the market. Reference in this regard is placed in the case of MSRTC's Central Workshop v Commissioner of Central Excise, Aurangabad [2012 (282) ELT 101 (Tri-Mum) wherein the classification of components of bus bodies were in question. Relying on the fact that the specific components could only be used in bus bodies, the Hon'ble Tribunal held that: We find that in the present case before us, the components of bus bodies are meant for specific use in buses made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. If we look into the said entry as claimed by the applicant, i.e., HSN 9401 Seats (other than those of heading 9402), whether or not convertible into beds, and parts thereof, it is mentioned as 'seats and parts thereof'. The term 'part' carries much significance in this case. The meaning of 'part' as per Cambridge dictionary, a separate piece of something, or a piece that combines with other pieces to form the whole of something: one of the pieces that together form a machine or some type of equipment : As mentioned above, 'parts' combine to form a whole and they are integral to the completion of any article or equipment. On the contrary if we examine the definition of 'accessories', As per Merriam--Webster, Definition of 'accessory', an object or device that is not essential in itself but adds to the beauty, convenience, or effectiveness of something else. eg: auto accessories and clothing accessories a thing of secondary or lesser importance : ADJUNCT After a clear examination of both the above terms i.e., 'parts' and 'accessories', 'seat covers' c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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