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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 ..... mitted all their submissions on the issue and has nothing more to add. 3. Question on which Advance Ruling is sought: The applicant has sought advance ruling on the classification of roof mounted Air-conditioning unit especially for use in railway coaches (manufactured as per railway design) i.e. whether they are classifiable under HSN- 8415 1090- IGST @ 28% or under HSN 8607 99 - IGST @ 18% as parts of Railway Coaches; Locomotives? 4. Eligibility of The Application For Advance Ruling: The Section 97(2) of the Central Goods and Services Tax Act, 2017, read with Section 97(2) of the Punjab Goods and Services Tax Act, 201 7, provides for the issues on which advance ruling can be sought. 97 (2) The question on which the advance ruling is sought under this Act, shall be in respect of, (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termined by its principal use. Thus. the steering gear, braking systems, road wheels, mudguards, etc. used on many of the mobile machines falling in Chapter 84 arc virtually identical with those used on the lorries of Chapter 87, and since their principal use is with lorries, such parts and accessories are classified in this Section." The impugned goods are solely and principally for use in the manufacture of passenger coaches of railways. 5.2 The applicant has cited the following judgements along with submission. ✓ DIESEL COMPONENTS WORKS Vs. COMMISSIONER OF C.EX., CHANDIGARH (IN THE CEGAT, COURT NO. 1, NEW DELHI), 2000 (120) E.L.T. 648 (Tribunal) ✓ S. AUTO INTERNATIONAL LTD. Versus COLLECTOR OF C. EX., CHANDIGARH 2003 (152) E.L.T. 3 (S.C.) ✓ RAIL TECH Versus COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH 2000 (120) E.L.T. 393 (Tribunal) ✓ MECHANICO ENTERPRISES Versus COMMISSIONER OF C.EX., CALCUTTA-II, 1998 (104) E.L.T. 345 ('Tribunal) ✓ COMMISSIONER OF C. EX., BANGALORE, Versus SRI RAM METAL WORKS, 1998 (99) E.L.T. 616 (Tribunal) ✓ COMMISSIONER OF C. EX., BANGALORE Versus RAMSONS UDYOG (P) LTD.2000 (115) E.L.T. 171 (Tribunal) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are specifically classifiable under HSN 8607. Section Note 3 to Section XVII, inter-ilia, prescribes as under: "3. References in Chapters 86 to 88 to "parts" or "accessories" do not apply to parts or accessories which are not suitable for use solely principally with the articles of those. Chapters. A part or accessory which answers to a description in two or more of the headings of those Chapters is to be classified under that heading which corresponds to the principal use of that part or accessory." We have gone through the prevailing GST law in this regard and find that the GST law prescribes that in case of any dispute regarding classification, it is the Customs Tariff, HSN and the Explanatory Notes to HSN that would determine the classification. Before proceeding further, we must go through HSN 8607 and 8415. HSN Code 8607 reads as under: 8507 PARTS OF RAILWAY OR TRAMWAY LOCOMOTIVES OR ROLLING-STOCK -- Bogies, bissel-bogies, axles and wheels, and parts thereof : 8607 11 00 -- Driving bogies and bissel-bogies 8607 12 00 -- Other bogies and bissel-bogies 8607 19 -- Other including parts: 8607 19 10 --- Axles, wheels for coaches, van and wagons (rolling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pheric 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 that 'Roof Mounted Air-conditioning units' are not cove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection. (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. 1. The first condition to be fulfilled is that. the items must not be excluded by the terms of Note 2 to Section XVII. Note 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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