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TMI Blog2022 (9) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... ecifically excludes Air Conditioning Machines (heading 84. 15) from falling under HSN of Section XVII and more so, from HSN 8607. Therefore, by virtue of Note 2 (e) to Section XVII read with Explanatory Notes, Air Conditioning Machines (heading 84.15) are excluded from this Section . Therefore, the very first condition is not satisfied in the case of applicant. Further, the three conditions, as enumerated above. show that any parts made specifically for railways and not covered under headings 84:01 to 84.79 - Moreover, three conditions prescribed for any Item to be classified as a part in Chapter 86 are also not Fulfilled in the instant case. The Roof Mourned Air-Conditioning unit manufactured by the applicant are classifiable under HSN Heading 8415 and the classification of the goods shall not after on account of supply by them to Railways. - AAR/GST/PB/016 - - - Dated:- 16-8-2022 - MS. VARINDER KAUR, AND MR. VIRAJ SHYAMKARN TIDKE, MEMBER Present for applicant : S.S. Chauhan (Manager) Sudhir Malhotra (Advocate) 1. M/s. ESS ESS KAY ENGINEERING COMPANY PRIVATE LIMITED, as detailed in the table above and hereinafter referred to as applicant , had submitted an app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under HSN 8607 99 -IGST @ 18% falls under the ambit of Section 97(2) (a) - classification of any goods or services or both. Hence, the application of the applicant is eligible for a ruling by the Punjab State Advance Ruling Authority 5. SUBMISSIONS BY THE APPLICANT: - 5.1 The applicant has made the following submissions at the time of filing of advance ruling application: - The applicant is inter-alia engaged in manufacture of Roof Mounted Air-conditioning unit for Passenger Coaches of Railway as per RDSO specification and drawing (in short impugned goods). The impugned goods are exclusively for use in railway coaches, it has no marketability except use in railways coaches. It is an integral / essential part of Air-conditioned railway coaches and accordingly classifiable under HSN 8607 99 of Customs Tariff Act as made applicable to GST vide Notification No. 1/2017 CT (R) dated 28.06.2017 The Note 3 to section XVII of Customs Tariff Act reads as under: - Note 3 to section XVII References in Chapters 86 to 88 to parts or accessories do not apply to parts or accessories which are not suitable for use solely or principally with the articles of those Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, Tariff Head- 8415 relates to Air Conditioning machines, comprising a Motor-Driven Fan and Elements for changing the temperature and Humidity, including those machines in which the humidity cannot be separately regulated. Similar question decided on dated 14.02.2020 by Authority for Advance Ruling-Uttar Pradesh went in favour of Appellant and against the Revenue in which the said Roof Mounted AC Package Unit was held to be fall under Chapter 86.07 of the GST Tariff. Moreover, Supreme Court Judgement delivered on 08.03.2021 in Civil Appeal No 37 of 2009 in the case WESTINGHOUSE SAXBY FARMER LTD. VS COMMR.OF CENTRAL EXCISE CALCUTTA deciding similar question also went in favour of Appellant and against the Revenue. The jurisdictional CGST Authorities were also asked to submit the comments but no reply was received from them. 7. DISCUSSIONS AND FINDINGS: - 7.1 We have gone through the application and submissions made by the applicant. 7.2 The question raised by the applicant involves classification of air Conditioning machines manufactured and supplied by them to Indian Railways for use in the railway coaches. The applicant has contended that the goods viz. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 --- Axle boxes (lubricating or grease box) 8607 19 90 --- Other parts of axles and wheels -- Brakes and parts thereof: 8607 21 00 -- Air brakes and parts thereof 8607 29 00 -- Other 8607 30 -- Hooks and other coupling devices, buffers and parts thereof: 8507 30 10 --- Buffers and coupling devices 8607 30 90 --- Other -- Other: 8607 91 00 -- Of locomotives 8607 99 -- Other: 8607 99 10 --- Parts of coach work of railway running stock 8607 99 20 --- Parts of tramway, locomotives and running stock 8607 99 30 --- Hydraulic shock absorbers for railway bogies 8607 99 90 --- Ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstallations requiring specific atmospheric conditions (e.g. in the textile, paper, tobacco or food industries). Further, Explanatory Notes to Chapter 84 under Heading General and sub heading `(B) General Arrangement of the Chapter reads as under: (1) . (2) Headings 84.02 to 84.24 cover the other machines and apparatus which are classified mainly by reference to their function, and regardless of the field of industry in which they are used. 7.5 From the above, it can be inferred that Roof Mounted Air Conditioning unit manufactured and supplied by the applicant is squarely covered under HSN 84.15 irrespective of field of industry in which they are used. 7.6 Further, Chapter Note 2 to Chapter 86 of the Customs Tariff states as under: 2. Heading 8607 applies, inter alia, to: (a) axles, wheels, wheel sets (running gear), metal tyres, hoops and hubs and other parts of wheels; (b) frames, under frames, bogies and bissel-bogies; (c) axle boxes, brake gear; (d) buffers for roiling-stock; hooks and other coupling gear and corridor connections; (e) coachwork. 7.7 On perusal of chapter note 2 of chapter 86, it can be observed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions: (a) They must not be excluded by the terms of Note 2 to this Section. (see paragraph (A) below). and (b) They must be suitable for use solely or principally with the articles of Chapters 86 to 88- (see paragraph (B) below). and (c) They must not be more specifically included elsewhere in the Nomenclature (see paragraph (C) below). (A) Parts and accessories excluded by Note 2 to Section XVII. This Note excludes the following parts and accessories, whether or not they are identifiable as for the articles of this Section: (1)----------------- (2)----------------- (3)----------------- (4)----------------- (5) Machines and mechanical appliances, and parts thereof, of headings 84.01 to 84.79. for example: (a)------------- (b)------------- (c)------------- (d)------------- (e) (f) Air-conditioning machines (heading 84.15). The above provisions show that for an) item to be classified as a part in Chapter 86, all the three conditions as at (a), (b) and (c) above have to be fulfilled. We now examine whether all these conditions are fulfilled in respect of the items supplied by the applicant. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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