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TMI Blog2024 (3) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... 090 is factually incorrect and as per the Rules of interpretation, seat cover is part of the seat, which has a specific entry 94019900. From the definition of part, it is clear that part per se means a portion of an equipment or a machinery which is essential to the functioning of that particular equipment or machinery. In other words, part is an integral element of machinery or equipment without which the specific product cannot function. The part in question should be so inextricably linked to the product that the product cannot be brought into use without the part in question. As against this, an accessory is an addition to the main product, which merely adds to its beauty or convenience or effectiveness. The seat covers are generally not manufactured or cleared by the O.E. manufacturer of motorcycle seats when the supply is made by them to the motorcycle manufacturer. Instead it is the dealers of motorcycles that sell the seat covers separately, on optional basis, to the purchasers of motorcycles - Hence seat covers are not integral element of seats and thus not by any means, part of the seat. Seat covers are only accessories to the seat. The two-wheeler seat covers are specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... never been made. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are in pari materia and have the same provisions in like matter and differ from each other only on few specific provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act, 2017 would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act, 2017. 2.1. The subject appeal was filed under Section 100(1) of the Tamilnadu Goods & Services Tax Act 2017/Central Goods & Services Tax Act 2017 (hereinafter referred to 'the Act') by M/s Lions Seat Cushions Private Limited (hereinafter referred to as 'Appellant'). The Appellant was registered under the GST Act vide GSTIN 33AACCL1446J1ZP. The appeal was filed against the Order No. 105/AAR/2023 dated 05.09.2023 passed by the Tamilnadu State Authority for Advance ruling on the Application for Advance ruling filed by the Appellant. 2.2. It was seen that along with the 'Grounds of Appeal' filed with the Appeal Application in Form GST ARA-02, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading 940120 covers 'seats for motor vehicles', whereas the Appellant is riot manufacturing 'Seats' as such but only a seat cover which is fitted over the seat, which is already factory fitted in the two wheeler, and therefore the product manufactured by the applicant will not get covered under 940120. * The seat covers are only accessory to the seats and the same are purchased by the customer for comfort. Hence, the correct classification for seat covers would be 8714, which covers parts and accessories of vehicles of heading 8711 to 8713, wherein 8711 relates to Motorcycles and thereby will attract 28% GST. 3.3. Aggrieved of the above decision of the AAR in Oder No. 105/AAR/2023 dated 05.09.2023, the Appellant has filed the present appeal. The grounds of appeal as submitted by the Appellant, are as under: * The Chapter heading 9401, not only covers seats but also parts of seats as given below: Tariff Item Description (1) (2) 9401 SEATS (OTHER THAN THOSE OF HEADING 9402), WHETHER OR NOT CONVERTIBLE INTO BEDS, AND PARTS THEREOF 9401 10 00 - Seats of a kind used for aircraft 9401 20 00 - Seats of a kind used for motor vehicles - Swivel seats with variable height ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry no. 435A of Schedule III of Notification No. 01/2017-CT(Rate) dated 28.06.2017, as amended. Hence, the Appellant prayed that the Appellate Authority may pass orders to set aside the impugned order under appeal, classify the seat cover under CTH 94019900 and pass such further or other order[s], as may be deemed fit and proper in facts and circumstances of the case. PERSONAL HEARING; 5.1. The Appellant was therefore provided with another opportunity of personal hearing on 23.01.2024 to discuss the merits of the case. Shri M. Arumugam, the Managing Director of M/s. Lion Seat Cushions Private Limited and Shri M. Saravanan, Consultant, Chartered Accountant Firm, who is the authorized representative (AR) of the company, appeared for the Virtual Hearing. The AR reiterated the submissions made by them in the 'Grounds of Appeal' furnished along with the appeal application filed by them. He stressed the point that a specific entry would prevail over a general entry and therefore according to them, the seat covers would fall under chapter 9401 which covers parts for two wheelers also. 5.2 When the Members raised a query regarding the nature of customers to whom they supply the seat cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of AAR that it is an 'accessory' to Two-wheeler falling under 87141090 is factually incorrect and as per the Rules of interpretation, seat cover is 'part' of the seat, which has a specific entry 94019900. 6.4. We find that the said goods to get classified under chapter 9401 9900, the same has to be in the nature of 'parts' of 'seats'. The term 'part' carries immense 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. Against this, when we examine the definition of 'accessories', as per Merriam-Webster, an 'accessory' is, "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" From the above definitions, we find that 'part' per se means a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us not by any means, part of the seat. 'Seat covers' are only accessories to the seat. 6.8. Seat cover for a two wheeler is an article which may be removed whenever desired by customers without causing any difference in the functions of the motor cycle. Seat covers are generally made by giving a layer of sponge, which gives a cushion effect and this adds to the comfort of the rider. Even in general trade parlance or in terms of their specific usage, seat covers are considered as accessories and are customized as per the preference of the clients. Trade circles consider the automobile accessories as a categoiy 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 vehicle, and also make it comfortable for riders. Thus, we are of the considered opinion that 'seat covers' are not essential part of the seats but only accessories that enhance the functional value. 6.9. As far as the claim of the appellant that 'seat covers' are classifiable under 9401 99 00 is concerned, it is seen that the heading 9401 refers to "Seats (other than those of heading 9402), whether or not co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evail over the heading 8714 which is general in nature. However, from the detailed discussions above, it becomes clear that what we are dealing here with is not a "part" at all but an "accessory"; hence heading 9401 does not apply to it at all. Even on the ground of specificity of applicability of 9401 against 8714 we find that a product, we find that 9401 refers to seats (in general) and parts thereof which will be more general in nature, as compared to the heading 8714, which is more specific as it relates specifically to accessories (seat cover) of vehicles of headings 8711. 6.13. It is pertinent to mention here that seat covers were covered under 'accessories' in the pre-GST regime as well. In this regard, we would like to take note of Circular No. 541/37/2000-Central Excise dated 16.08.2000 issued by the Central Board of Excise & Customs, on the issue relating to classification of Car Seat covers. The text of the said circular is reproduced as under "The Tribunal vide Final order No. 39/2000-D dated 4.1.2000 reported in 2000 (38) RLT 170 (CEGAT) in the case of Guru Overseas Pvt. Ltd. Vs. CCE, Delhi had decided that the car seat covers - whether of & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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