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TMI Blog2024 (9) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... river in steering. This regulation is based on two other phenomena-speed and torque. In other words, two non-electrical quantities viz. speed and torque are measured by sensors which provide information to the EPS-ECU and based on this it regulates another quantity viz., amount of assistance provided in steering. EPS-ECU is in essence not a regulator of electrical quantity but is a regulator of the assistance provided to the driver in steering. EPS-ECU is not an instrument or an apparatus but is a part of the power steering system. Merely because it is in the form of a PCB and other electronic components does not change it from a part of an automobile into an instrument or an apparatus. It is, in essence, a microprocessor with certain other parts which receives information from the speed and torque sensors and processes it and issues instructions to regulate the assistance provided by the power steering to the driver. Therefore, EPS-ECU does not merit classification under CTI 9032 90 00. EPS-ECU is not designed for electricity distribution or electric control. It is a part of an automobile specifically a part of the power steering system to decide how much assistance should be prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2022 passed by the Commissioner of Customs (Appeals), New Customs House, New Delhi whereby he rejected the appeals filed by the appellant assailing the classification of the goods imported under 127 bills of entry from February 2018 to May 2021. 2. We have heard Shri B.L. Narasimhan, learned counsel for the appellant and Shri S.K. Rahman, learned authorized representative for the revenue and perused the records. 3. The appellant manufactures and supplies parts of automobiles and for this purpose it imported electronic control units for electronic power steering (EPS ECU) and its parts through 127 bills of entry. The appellant classified the goods under Customs Tariff Item [CTI ] 8708 9400 as parts and accessories of motor vehicles in its self-assessment and thereafter assailed it before Commissioner (Appeals). The disputed goods are as follows :- (i) Complete EPS ECU ; (ii) Sub-assembly i.e. complete EPS ECU without cover and (iii) Parts of EPS ECU i.e. cover, housing frame assembly, heat sink, housing assembly, spacer, circuit assembly. 4. There is no dispute that the imported goods are electronic by nature. There is also no dispute that they are parts of automobiles and have no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Enterprises vs. Commissioner (Export), Nhava Sheva [2015 (316) E.L.T. 274 (Tri. Mumbai)] (ii) The EPS ECU and sub-assembly are classifiable under CTH 9032 and other parts are classifiable under CTI 9032 90 09 because CTH 9032 covers automatic regulating and controlling apparatus which is the function of EPS ECU. Chapter No. 7 to Chapter Note 90 reads as follows :- 7. Heading 9032 applies only to: (a) instruments and apparatus for automatically controlling the flow , level, pressure or other variables of liquids or gases, or for automatically controlling temperature, whether or not their operation depends on an electrical phenomenon which varies according to the factor to be automatically controlled, which are designed to bring this factor to, and maintain it at, a desired value, stabilized against disturbances, by constantly or periodically measuring its actual value; and (b) automatic regulators of electrical quantities, and instruments or apparatus for automatically controlling non-electrical quantities the operation of which depends on an electrical phenomenon varying according to the factor to be controlled, which are designed to bring this factor to, and maintain it a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ific entries. (xiv) Specific entry prevails over the general entry. Submissions on behalf of the Revenue 9. Shri S K Rahman, learned authorised representative for the Revenue submitted as follows: i) The goods were described in the bills of entry and the import documents as EPS-ECU, automotive e-parts, captive consumption . Since they are automobile parts , the appropriate customs tariff heading is CTH 8708 and within this heading CTI 87089400 as steering wheels and parts thereof . ii) Chapter 87 falls under Section XVII of the Tariff. HSN Explanatory Note to this Section lays down three criteria for parts to be classified under the headings of that section all of which are met in the goods. They are: a) They must not be excluded by the terms of Note 2 of Section XVII; b) They must be suitable for use solely or principally with the articles of Chapters 86 to 88; and c) They must not be more specifically included elsewhere in the Nomenclature. iii) EPS-ECU and its parts are not excluded as per note 2 to section XVII and therefore, the first condition is met. EPS-ECU and its parts are designed principally for use in automobiles as is evident from the description and there is no evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olts will be supplied to the motor and it will run at its full speed providing too much power to the driver in steering. 13. At the heart of the EPS-ECU is the circuit assembly which is a printed circuit board populated with capacitors, resistors, integrated circuit, mircoprocessor, etc. In addition to this circuit assembly, it has housing assembly, cover, spacer, heat sink, etc. which complete the EPS-ECU. If the EPS-ECU is without the cover, it is called its sub-assembly. The various parts of EPS-ECU and their functions according to the appellant are as follows: Parts of EPS-ECU Cover is an outer covering and is mainly used for protection of EPS-ECU Assembly from dust/ foreign particles and from Electromagnetic interferences. Housing or Housing Assembly is the main structure of the EPS-ECU that holds the PCBs together. Housing of the EPS-ECU consists of connectors through which external signal inputs goes into the EPS-ECU. It is a plastic insert moulding part which contains sheet metal terminals for connection between power circuit P-PCB control circuit C-PCB. It also acts like a mechanical structure that holds all electrical and electronic parts. Frame Assembly are assembly part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned order. 18. We now proceed to decide the classification of the goods. Classification of EPS-ECU and its sub-assembly 19. It is undisputed that the sub-assembly is the same as EPS-ECU, except its cover. Therefore, according to the appellant, it should be treated as an incomplete EPS-ECU and should be classified as complete EPS-ECU as per GIR 2(a) which reads as follows: Rule 2: (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or failing to be classified as complete or finished by virtue of this Rule), presented unassembled or disassembled. 20. The department also classified both EPS-ECU and its sub-assembly under the same CTI. Thus, we agree with this submission of the learned counsel for the appellant that the EPS-ECU and its sub-assembly should be classified under the same CTI. The competing entries are CTI 8708 94 00 (by the Revenue) and CTI 9032 89 10 (first claim by the appellant), CTI 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43 10 30 --- Synchrocyclotrons, synchrotrons 8543 10 90 --- Other including cyclotrons 8543 20 - Signal generators : 8543 20 10 --- Sweep generators 8543 20 20 --- Impulse generators 8543 20 30 --- Tacho generators 8543 20 90 --- Other 8543 30 00 --- Machines and apparatus for electroplating, electrolysis or electrophoresis 8543 70 - Other machines and apparatus: 8543 70 11 ---- Proximity card and tags 8543 70 12 ---- Metal detector 8543 70 13 ---- Mine detector 8543 70 19 --- Other --- Audio special effect equipment: 8543 70 21 ---- Digital reverberators 8543 70 22 ---- Mixing system or consoles 8543 70 29 ---- Other --- Video special effect equipments: 8543 70 31 ---- Video mixing system or consoles 8543 70 32 ---- Video effect system 8543 70 33 ---- Digital layering machine 8543 70 34 ---- Paint box 8543 70 35 ---- Video typewriter 8543 70 36 ---- Video matting machine 8543 70 39 ---- Other --- Edit control Unit: 8543 70 41 ---- Computerised editing system controlling more than three video editing machines 8543 70 42 ---- Other video control unit 8543 70 49 ---- Other 8543 70 50 --- Colour corrector --- Amplifier: 8543 70 61 ---- Broadcast amplifier 8543 70 62 ---- Limiting ampl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r articles of vulcanised rubber other than hard rubber (heading 4016); (b) parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39); (c) articles of Chapter 82 (tools); (d) articles of heading 8306; (e) machines and apparatus of headings 8401 to 8479, or parts thereof, other than the radiators for the articles of this Section, articles of heading 8481 or 8482 or, provided they constitute integral parts of engines and motors, articles of heading 8483; (f) electrical machinery or equipment (Chapter 85); (g) articles of Chapter 90; (h) articles of Chapter 91; (ij) arms (Chapter 93); (k) luminaries and lighting fittings and parts thereof heading 9405; or (l) brushes of a kind used as parts of vehicles (heading 9603) 24. This list does not include EPS-ECU by name although it excludes articles of Chapters 85 and 90. Thus, if any of the appellant s three alternative claims of classification is upheld, EPS-ECU cannot fall under chapter 87. Otherwise, the first of the above conditions for the EPS-ECU to be classified as part of automobile under Chapter 87 will be fully met. The third condition is that the goods should no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bill of Entry, he is duty bound to pass a speaking order (unless the importer agrees to the change in classification in writing). The appellant is a large company supplying EPS-ECU to automobile manufacturers and we cannot countenance a situation where it was either not aware of the legal position regarding assessment or it could have been compelled by any officer to file Bills of Entry in any manner. 26. The appellant s second submission is that EPS-ECU and its sub-assembly are correctly classifiable under CTI 9032 90 00 as Automatic regulating or controlling instruments and apparatus because based on the speed and torque of the vehicle EPS-ECU regulates the voltage supplied to the motor and thereby the amount of assistance provided in steering. According to the learned counsel, it not only regulates the electrical quantity viz., voltage but also regulates the non-electrical quantity of torque. Learned counsel laid great emphasis on Chapter Note 7 to Chapter 90 which reads as follows: 7. Heading 9032 applies only to: (a) instruments and apparatus for automatically controlling the flow , level, pressure or other variables of liquids or gases, or for automatically controlling temp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her phenomena-speed and torque. In other words, two non-electrical quantities viz. speed and torque are measured by sensors which provide information to the EPS-ECU and based on this it regulates another quantity viz., amount of assistance provided in steering. EPS-ECU is in essence not a regulator of electrical quantity but is a regulator of the assistance provided to the driver in steering. 31. We are conscious that there are electronic instruments and apparatus which, though used in automobiles, are classifiable under Chapter 90. However, EPS-ECU is not an instrument or an apparatus but is a part of the power steering system. Merely because it is in the form of a PCB and other electronic components does not change it from a part of an automobile into an instrument or an apparatus. It is, in essence, a microprocessor with certain other parts which receives information from the speed and torque sensors and processes it and issues instructions to regulate the assistance provided by the power steering to the driver. Therefore, in our considered view, EPS-ECU does not merit classification under CTI 9032 90 00. 32. The first alternative claim of the appellant is CTI 8537 10 00 as Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -ECU are also parts (or child parts) of the power steering and hence they were correctly classified under CTI 8708 94 00. 38. The appellant has three alternative submissions on the classification of parts of EPS-ECU. Its first submission is that they are classifiable under CTI 9032 89 90. According to the appellant, since the EPS-ECU itself is classifiable under CTI 9032 89 10, its parts consequently fall under CTI 9032 89 90. Since we have held that EPS-ECU do not merit classification under CTI 9032 89 10, its parts, consequently, do not fall under CTI 9032 89 90. 39. The appellant s alternative (second) submission is that parts of EPS-ECU are classifiable under CTI 8538 90 00 (cover, housing, housing assembly, spacer and circuit assembly) and CTI 8538 10 90 (heat sink). This submission is linked to its alternative submission that EPS-ECU is classifiable under CTI 8537 10 00. Since we have held that EPS-ECU do not merit classification under CTI 8537 10 00, its parts, consequently, do not fall under CTI 8538 90 00 (cover, housing, housing assembly, spacer and circuit assembly) and CTI 8538 10 90 (heat sink). 40. The appellant s another alternative (third) submission is that parts o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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