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TMI Blog2024 (3) TMI 1145X X X X Extracts X X X X X X X X Extracts X X X X ..... 50602/2021, C/50603/2021 AND C/51565/2022, C/51566/2022, C/51567/2022, C/51568/2022, C/51569/2022, C/51570/2022, C/51571/2022, C/51572/2022, C/51573/2022, C/51574/2022, C/51575/2022, C/51576/2022, C/51577/2022, C/51578/2022, C/51579/2022, C/51580/2022, C/51581/2022 C/51582/2022 APPEARANCE: For the appellant : Shri D.K. Rana, Advocate, Shri Dhanur Gupta, Advocate, Shri Ayush Aggarwal, Advocate. For the Department : Shri S.K. Rahman, Authorized Representative. P.V. SUBBA RAO M/s. Continental Automotive Brake Systems Ltd. [the appellant], filed these 75 appeals for setting aside the following impugned orders: S.No. Appeal No. Respondent Impugned order 1. C/50546 to 50603 of 2021 Commissioner of Customs D-II/ICD/PPG/ 1147-1206/ 2020-21 dated 17/12/2020 2. C/51565 to 51582 of 2022 Principal Commissioner of Customs CC (A) CUS/D-I/Import/NCH/ 4193-4210/2021-22 dated 09/03/2022 2. Since the issue involved in all these appeals is identical, they are being disposed of together. 3. The appellant manufactures Electronic Stability Control Systems [ESCS] which are used by manufacturers of automobiles in Anti-Lock Braking Systems [ABS] or Electronic Braking Systems [EBS] which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner (Appeals). 8. The question to be answered by us in these appeals is whether the ECU imported by the appellant is classifiable under CTI 9032 89 10 as claimed by the appellant or under CTI 8708 99 00 as held in the impugned orders. 9. We have heard Shri D K Rana, learned counsel for the appellant and Shri Shaikh Khader Rahman, learned authorised representative for the Revenue and have perused the records. Submissions by the appellant 10. Shri D K Rana, learned counsel for the appellant submitted that the appellant imported ECU and manufactured ESCS and sold them to automobile manufacturers for use in their anti-lock braking systems. The brakes will work even without ABS it but the ABS makes the braking safe. ECU is in the form of a printed circuit board; it receives signals from the sensors attached to the wheels and analyses the information and issues signals based on which the braking is managed by the other parts of the ABS. ECU is classifiable under CTI 9032 89 10 as "Electronic automatic regulator" and not under CTI 8708 99 00 as "parts and accessories of automobiles" for four reasons: i. ECU cannot fall under CTI 8708 99 00. As per the HSN Explanatory note (III) to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneral Rules of Interpretation [GIR] 3(b). iv. CTI 9032 89 10 is a later entry and it prevails over the earlier entry of 8708 as per GIR 3(c). Submissions by the department 11. Shri Shaikh Khader Rahman, learned authorised representative for the Revenue asserted that ECU falls under CTI 8708 99 00 and not under CTI 9032 89 10 and made the following submissions. i. The appellant had been classifying the ECU under CTI 8708 99 00 and paying appropriate duty and there was no dispute. Other importers have also been classifying ECU under this CTI. On 29-11-2017 the appellant sent a letter that they wish to change the classification of the ECU from CTI 8708 99 00 to CTI 9032 89 10 and in reply dated 17-05-2018 the department explained that the correct classification is CTI 8708 99 00. However, the appellant continued to file bills of entry classifying ECU under CTI 9032 89 10 which required the department to re-assess the goods. The intention of the appellant apparently is to pay 21.4% lower duty than is due by wrongly classifying the impugned goods under CTI 9032 89 10. ii. The appellant itself has declared the nature of goods as 'ECU Automotive parts' in all its declarations an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the chapter headings, there is no ground to follow GIR 3(a) and 3(b). Findings 12. We have considered the submissions advanced by both the sides. 13. The undisputed facts of the case are that ECU is a printed circuit board which the appellant imported and used it for manufacture of ESCS, which it sold to automobile manufacturers for use in their ABS. The ABS regulates the manner in which the brake is applied. The brake can function even without the ABS but ABS makes the braking safer by regulating it. The appellant has described the imported goods in the Bills of Entry and other import documents as 'Electronic Control Unit (automotive parts)'. The only use of the ECU imported by the appellant, as per the records, is in the manufacture of ESCS and the use of ESCS is as a part of ABS or EBS of the cars. 14. Thus, there is no doubt that ECU imported by the appellant is in the form of a printed circuit board and that it is a part of the ESCS, which is a part of the automobiles. The description of the goods in the Bills of Entry also makes it explicit that they are automotive parts. 15. The case of the appellant is that although it is an automotive part, but since ECU is purely an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Section each provide for the classification of parts and accessories of the vehicles, aircraft or equipment concerned. It should, however, be noted that these headings apply only to those parts or accessories which comply with all three of the following conditions : (a) They must not be excluded by the terms of Note 2 of 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 excluded the following parts and accessories, whether or not they are identifiable as for the articles of this Section : (1) ...... (2) ..... (8) Instruments and apparatus of Chapter 90, including those used on certain vehicles such as : (a) Photographic or cinematographic cameras (heading 90.06 or 90.07) (b) Navigational instruments and appliances (heading 90.14) (c) Instruments and appliances used in medical, surgical dental or veterinary sciences (heading 90.18) (d) Apparatus based on the use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant, since the function of the ECU is to receive signals from the sensors, analyse the data and issue instructions, it is an electronic automatic regulator. According to the learned authorised representative for the Revenue, ECU does not fall under CTI 9032 89 10 (electronic automatic regulators) or even under the four digit CTH 9032(Automatic regulating or controlling instruments and apparatus) because it is neither an instrument nor an apparatus nor does it regulate anything. It does not measure any parameter and this is done by various sensors which are not part of the ECU. It also cannot regulate anything such as braking because that can be done only by the ABS of the automobile. All that the ECU does is analyse the data. 23. The submissions of the learned authorised representative for the department deserve to be accepted. From the records of the case and the detailed technical submissions made by the learned counsel for the appellant, it is evident that the ECU does not and cannot either measure or regulate anything. It only analyses the data provided to it by other parts of the ABS (sensors) and compares it with standards and issues instructions. Based on these instructions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antly or periodically measuring its actual value. 26. Evidently, Section Note 7(b) deals with either regulators of electrical quantities or instruments or apparatus for automatically controlling non-electrical quantities which depend on electrical phenomenon. ECU is not a regulator of electrical quantity nor is it an instrument or apparatus for regulating non-electrical quantities which depend on electrical phenomenon. It is not an instrument or apparatus by itself. It is the ABS which regulates the braking to ensure safe braking. It regulates the rate at which the brake is applied to different wheels and this does not depend on any electrical quantity but depends on the certain other non-electrical factors such as angular speed, torque, etc. In this entire process, data on sideway movement, wheel speed and angular motion is collected by the sensors and the ECU analyses that and instructions are issued, based on which other parts of the system such as the motor and the solenoid valves and the braking fluid operate to control the manner in which the brake is applied. Merely because ECU is a chip which analyses the data (and through any chip electricity flows), the function of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner to the appellant, other importers of ECU have also been classifying it under this item although there would be no estoppel against the appellant in claiming a different classification, if it can provide sufficient justification. In this case, we do not find any justification. 33. Learned counsel for the appellant relied upon the judgment of the Supreme Court in Keihin Penalfa Ltd. Versus Commissioner of Customs 2012 (278) ELT 578 (SC). The issue in dispute in this case was Electronic Automatic Regulators which were held by the Tribunal to be classifiable under 8543.89 and the assessee claimed classification under 9032.89. The Supreme Court noted that the revenue effect was less than Rs. 6 lakhs and for the subsequent period, the Central Government itself issued a notification classifying the goods under 9032.89. In this context, without considering the merits of the appeal filed by the assessee, the appeal was decided. Paragraphs 4 and 5 of this judgment are reproduced below: "4. In the present appeal, the Revenue effect is less than Rs. 6 lacs and since the Revenue itself has classified the goods in dispute under Chapter sub-heading 9032.89 from 1-3-2002, it may no ..... 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