Shiroki Auto Components India Pvt. Ltd. Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)
CESTAT Ahmedabad has held that the child parts imported by the appellant are classifiable under Tariff Item 9401 90 00 as parts of vehicle seats as declared by the importer-assessee and not under Tariff Item 8708 99 00 as parts and accessories of motor vehicles of Heading 8701 to 8705 of the Customs Tariff Act 1975 as assessed by the Customs. The imported child parts where assembled into round recliners which were further used to make recliner assembly which in turn was welded into seat frame for manufacture of complete seat for motor vehicles. The Tribunal noted that classification of round recliner and all subsequent goods under Heading 9401 was not disputed by department and that vehicle seats are not covered under Heading 8708. It also observed that child parts were not used in the motor vehicle but were used in the manufacture of other parts and were an integral part of motor vehicle seats.
FULL TEXT OF THE CESTAT JUDGEMENT
The brief facts of the case are that the appellant have imported child parts from Japan which are then assembled to manufacture Round Recliner Assembly in India and then said Round Recliner Assembly is dispatched to factory at Haryana where the recliner welding assembly is completed and thereafter it is sent to Maruti factory where it is welded and fixed on the seat of motor vehicles. The case of the department is that the child / spare parts imported by the appellant are classifiable under heading 8708 of CTH as parts and accessories motor vehicle, as against the appellant‘s claim that the imported parts are parts of motor vehicle seats and classifiable under 9401 9000. The Adjudicating Authority in the speaking order held that child/ spare parts imported by the appellant is correctly classifiable under CTH 8708. For this conclusion, he placed reliance on the judgments of Pragati Silicones Pvt. Limited vs. CCE, Delhi – Manu/SC/2072/2007, GS Auto International Limited vs. Collector of Central Excise, Chandigarh – Manu/SC/0031/2003 and Cast Metal Industries Pvt. Limited vs. CCE, Kolkata – Manu/SC/1369/2015.
2. Shri A.R. Madhav Rao along with Shri Arjyadeep Rai learned advocates appearing on behalf of the appellant made a detailed submission. He submits that in the present case explanatory notes of Section XVII specifically excludes the vehicle seats of heading 9401; Motor vehicle seats are specifically mentioned under heading 9401 and this heading also covers parts of seats under heading 9401 9000 therefore, parts of motor vehicle seats can only fall under 9401 9000. He further submits that US Customs Ruling NY R04585 dated 15.08.2006 in regard to very same product i.e. Recliner Assembly has held the same to be parts of seats used in motor vehicles. As regards the judgments relied on by the Adjudicating Authority, he submits that all the three judgments are clearly distinguishable as the facts in those cases are different from the case in hand. In support of his submission he placed reliance on the following judgments:-
(a) JTKET Sona Automative India Limited vs. CC, New Customs House – CA 50547 of 2019 (Order No. 51389/2019 dated 18.10.2019)
(b) CCE vs. Uni Products India Limited – CA 302-303 of 2009 Hon‘ble Supreme Court judgment dated 01.05.2020.
(c) CCE, Shillong vs. Wood Craft Products Limited – 1995 (3) SCC 454
(d) K. Play (India) Limited vs. CCE, Delhi – 2005 (180) ELT 300 (SC)
3. On the other hand Shri Vinod Lukose, learned Superintendent (Authorised Representative) appearing on behalf of the Revenue reiterates the findings of the impugned order. He filed a detailed written submission and relied upon the following decisions:-
(a) 2005 (180) ELT 300 (SC) – O.K. Play (India) Limited vs. CCE, Delhi- III, Gurgaon
(b) 2007 (211) ELT 534 (SC) – Pragati Silicons Pvt. Limited vs. CCE, Delhi
(c) 1991(51) ELT 173(SC) – Mehra Brothers vs. Joint Commercial Officer
(d) 2019 (23) GSTL 441 (SC) CTO, Anti Evasion, Circle-III, Jaipur vs. Prasoon Enterprises
(e) 2003 (152) ELT 3(SC) – GS Auto International Limited vs. CCE, Chandigarh
(f) 1987(31) ELT 369(Bom) – PMP Auto Industries Limited vs. Union of India & Others
(g) 2015 (325) ELT 471 (SC) – Cast Metal Industries (P) Limited vs. CCE-IV, Kolkata
(h) 2004 (174) ELT 49(Tri-Chennai) – CCE, Coimbatore vs. Premier Instruments & Controls Limited
(i) 2015 (321) ELT A130 (SC) – Premier Instruments & Controls Limited vs. Commissioner
(j) 2002(145) ELT 639 (Tri-Del) – Insulation Electricals Pvt. Limited vs. CCE, Delhi-I
(k) 2008(224) ELT 512 (SC) — CCE, Delhi vs. Insulation Electricals Pvt. Limited
He submits that parts in question are used in the automobile seats therefore, it is clearly classifiable as parts and accessories of motor vehicle. He further submits that in the case of O.K. Play (India) Limited (supra), parameters were given on how to classify the goods. The same parameters i.e. HSN, Rules on interpretation of Customs Tariff can be adopted even for classification under Customs since Customs harmonized to nomenclature. As regards the authority of USA relied upon, whereby recliners have been held to be part of the seat, he submits that in the Harmonized Tariff Schedule of the United States, under the heading parts 9401.90, they have a further sub-heading which pertains to parts of seats of a kind used for motor vehicles. However, in the Customs Tariff under CTH 9401 which deals with seats, there is only one sub-heading which deals with parts namely 94019000. Sub-heading specifically deals with parts or seats of motor vehicles is missing in tariff. Even otherwise only where the goods are identical then law laid down by the earlier judgments is required to be followed. In this case, neither are the goods similar/ identical nor are the judgments/ orders so relied upon given by any Court within the territory of India. Therefore, the said US authority cannot be relied upon.
4. The appellant was directed to submit affidavit as regards to their manufacture from imported child parts and supply thereof. The appellant have submitted the affidavit dated 27 July 2020 along with copies of sample invoices, which is taken on record. The learned Authorised Representative Shri Vinod Lukose also submitted one more additional submission post hearing on 28.07.2020 which has been taken on record and carefully considered.
5. We have heard both sides and perused the record. The limited issue to be decided is whether the child parts imported by the appellant from Japan is classifiable under CTH 94019000 as parts of vehicle seats as declared by the appellant or under CTH 87089900 as parts and accessories of motor vehicles of heading 8701 to 8705 as assessed by the Customs. Before analyzing the entire legal authority on the classification, it is necessary to first understand the facts in the present case. The appellant have imported certain child parts which they have assembled in their plant at Gujarat. The assembled item is named as Round Recliner. Round Recliner is thereafter sold to the manufacturing facility of the appellant‘s sister concern M/s. Shiroki Technical India Pvt. Limited (hereinafter referred to as STIPL) in Haryana where said Round Recliner is used to make Recliner Assembly. M/s. STIPL Haryana sold the Recliner Assembly to the seat manufacturer namely M/s. Krishna Maruti Limited, Gurgaon. M/s. Krishna Maruti Limited after purchase of Recliner Assemblies fixed/ welded the same into the seat frame in the course of manufacture of complete seat of motor vehicles. The complete seat duly fitted with Recliner Assembly is supplied to Maruti Suzuki India Limited, Gurgaon. As per the affidavit given by the appellant and also on perusal of the invoices, it is seen that Round Recliner supplied by the appellant to their sister unit/ STIPL Haryana and also the manufacture of Recliner Assembly by STIPL Haryana and supplied to M/s. Krishna Maruti Limited, were classified under 9401. On this fact, it is clear that the appellant have manufactured Round Recliner which is part of Recliner Assembly and Recliner Assembly is part of complete seat and classification of goods at both the stages is for parts of seats. This classification under CETH 9401 has not been disputed by the department therefore, the classification of goods manufactured by the appellant as well as subsequent manufacturers of Recliner Assembly and even manufacturer of seat i.e. Krishna Maruti Limited under heading 9401, has been accepted by the department. It is also clear that Round Recliner manufactured by the appellant is not used as parts or accessories of motor vehicle. It is undisputedly used as part of sub assembly of the seats. Therefore, as per the appellant stand that they are supplying the final product Round Recliner is parts of seat under CETH 9401, it cannot be imagined that the child parts which is used for manufacture of Round Recliner is classifiable under CETH 8708 as parts and accessories of motor vehicles.
6. Now coming to various legal authorities such as relevant tariff entries, HSN and explanatory notes, General Rules for interpretation, Section notes on Customs Tariff for classification of goods. We analyze as under. The competing entries of Customs Tariff Act 1975 in respect of tariff item 9401 and 8708 are given below:-
