Case Law Details
In re Toyota Tsusho India Pvt. Ltd (CAAR Mumbai)
As per the explanatory notes to heading 8415, the heading excludes refrigeration units designed to maintain a fixed temperature well below 0°C in a closed chamber (e.g., lorry, trailer or container), and fitted with a heating system to raise the temperature in the chamber, within certain limits, when the outside temperature is very low. Such equipment is classifiable in heading 84.18 as refrigerating or freezing equipment, the heating function being subsidiary to the equipment’s essential function, which is to keep perishable products cool during transportation. However, the impugned devices are not refrigerating or freezing equipment. In their submission, the applicant asserted that the impugned devices merit classification under subheading 84186990. As per the explanatory notes to heading 8418, the refrigerators and refrigerating equipment of this heading are in the main machines or assemblies of apparatus for the production, in a continuous cycle of operations, of low temperatures (in the region of 0 °C or less) at the active cooling element, by the absorption of the latent heat of evaporation of liquefied gases (e.g., ammonia, halogenated hydrocarbons), of volatile liquids or, in the case of certain marine types, of water. However, the impugned devices are not designed to maintain a fixed temperature well below 0 °C in a closed chamber. They are portable air conditioning units for cooling and dehumidifying their immediate surrounding. As per the explanatory notes to heading 8418, air conditioning machines incorporating a refrigerator unit or a refrigerator unit evaporator (heading 84.15) are excluded from the heading 8418. Therefore, the goods under consideration are excluded from heading 8418, owing to explanatory notes to heading 8418. In respect of the comparison of spot coolers with air conditioners, as specified in Table 1 by the applicant, it is observed that the differentiating factors mentioned in the table do not disqualify the impugned devices from the purview of heading 8415. Spot coolers and air conditioners may have some operational differences, however, they have the same functionality, i.e., to modify the temperature and humidity of the surroundings. The essential conditions to be satisfied by the goods for classification under heading 8415 are already discussed in para 6.1, which the impugned devices satisfy. Therefore, the goods under consideration do not merit classification under subheading 84186990.
In regards to DGFT Notification No. 41/2015- 2020, dated 15th October 2020, it is to be noted that the said notification pertains to foreign trade policy and specifically to the import policy of India. The subject matter of advance rulings in customs, as specified in Section 2811 (2) of the Customs Act, 1962, does not cover foreign trade policy. Therefore, I am not in a position to give a ruling on this aspect, as the issue is beyond my jurisdiction.
In view of my aforesaid discussions, I rule that the spot coolers merit classification under subheading 84158290 of the first schedule of the Customs Tariff Act, 1975.
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