In re Mitsubishi Electric Automotive India Private Limited (CAAR Delhi)
The application before the Customs Authority for Advance Rulings (CAAR), New Delhi, was filed by an Indian company engaged in the manufacture and import of air conditioning systems and their components. The applicant sought an advance ruling under Section 28H(2) of the Customs Act, 1962, read with the CAAR Regulations, 2021, on the appropriate customs classification of air conditioners and their parts imported in Completely Knocked Down (CKD) or Semi Knocked Down (SKD) condition.
The applicant imports indoor units (IDU), outdoor units (ODU), and various parts and components of air conditioners. These include compressors, motors, propeller fans, evaporators, condensers (heat exchangers), reactors, PCBs, filters, and other components. The imported items are brought either together or separately, and after importation, assembly is carried out in India through job workers. The finished air conditioners are then sold in the domestic market.
The applicant explained that air conditioners imported in CKD/SKD condition do not function as complete air conditioning machines at the time of import. Assembly and integration of various parts are necessary to make the product operational. The applicant sought clarity on whether such CKD/SKD imports should be classified as complete air conditioners under Heading 8415 or whether individual parts should be classified separately under Heading 8415 90 as “parts.”
