CAAR Clarification on Anti-Dumping Duty for Skid Steer Loaders

In re Doosan Bobcat India Pvt. Ltd. (CAAR Mumbai)

In the case of Doosan Bobcat India Pvt. Ltd., the company filed an application with the Customs Authority for Advance Ruling (CAAR) in Mumbai, seeking clarification on the applicability of anti-dumping duties (ADD) to their imported Skid Steer Load-ers. The inquiry centers on whether these loaders fall within the definition of “Wheel Loaders” as defined under Notification No. 17/2023-Customs (ADD), dated December 27, 2023. This notification imposes anti-dumping duties on wheel loaders imported from China, but specifies that only loaders with an articulated joint fall under its scope. The applicant argued that Skid Steer Loaders differ technically from wheel loaders, notably due to the absence of articulation joints and their unique maneuvering mechanism using independently rotating wheels, which allows for high agility in tight spaces.

In support of their case, Doosan Bobcat provided technical comparisons between Skid Steer Loaders and Wheel Loaders, emphasizing that their product is operated via joystick and lacks the articulated frame typical of wheel loaders. The Customs Commissionerate in Chennai corroborated the applicant’s claims, affirming that Skid Steer Loaders do not meet the criteria set forth in the ADD notification. Following a review of the application and hearing the arguments from both parties, CAAR ruled that Skid Steer Loaders, based on their technical specifications and functional differences, do not qualify as Wheel Loaders under the ADD notification and are therefore not subject to anti-dumping duties. This ruling provides crucial clarification on the application of anti-dumping measures, ensuring that distinct product classifications are accurately acknowledged under import duties.

FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI

M/s. Doosan Bobcat India Pvt. Ltd. (IEC No.: 0307067637) (hereinafter referred to as `the Applicant’) filed an application (CAAR-1) for advance ruling in the Office of Secretary, Customs Authority for Advance Ruling (CAAR) Mumbai. The said application was received in the secretariat of the CAAR, Mumbai on 04.06.2024 along with its enclosures in terms of Section 28H(1) of the Customs Act, 1962(hereinafter referred to as the ‘Act also’). The applicant is seeking clarity on the following questions:

(a) Skid Steer Loaders imported by the Company do not qualify as Wheel Loaders covered under Notification No. 17/2023-Customs (ADD) dated 27.12.2023 (ADD Notification) due to technical differences in both the products.

(b) Product under consideration i.e. Skid Steer Loader imported by the Company shall not be subject to imposition of ADD in terms of the ADD Notification.

2. Submission by the Applicant:

2.1 M/s Doosan an Bobcat India Private Limited (“the Applicant”), is a fully owned san Bobcat Korea Co. Ltd. The Company has its registered office at HTC NO. 41, GST Road, Guindy, Chen-nai-600032. The Company is engaged in d trading of a range of equipment including backhoe loaders, skid steer s, air compressors, and light towers.

2.2 Since first quarter of 2023-24, amongst other products, the Company has been importing Skin Steer Loaders Model No. 5450 and S590 (hereinafter referred to as `Goods’/product un-der consideration’) from China in completely built unit (CBU) form for sale in India

2.3 The Product under consideration is a self-propelled wheel-mounted equipment used it from the ground. It operates without on articulation joint and has a front end loading mechanism. It is capable of performing various functions including pushing e location to another, loading material into a truck or trailer, performing variety of digging, and grading operations etc.

2.4 The Product under is a Skid Steer loader with lift arms positioned alongside of the operator station and attached to the rear of the machine. These lift arms are capable of accommodating attachments enabling them to perform diverse range of functions as above paragraph.

2.5 The said product is operated through joysticks located in the operator station. They ed left and right by engaging only one side of the machine’s wheels ,allowing for a skidding motion. The wheels of these loaders typically have no separate m and hold a fixed Straight alignment on the body of the machine. They possess the capability of zero radius turn-ing, by driving one set of wheels forward while simultaneously driving the opposite set of wheels in reverse.

2.6 On December 27, 2023, Ministry of Finance through Department of Revenue issued 7/2023-Customs (ADD) for imposition of anti-dumping duty on imports of originating in or ex-ported from China and imported into India in CBU or semi-knocked down (‘SKD’) form. Further, the said ADD Notification provides different rate of anti-dumping duty to be imposed on ‘Wheel loaders’ depending upon their producer.

2.7 To maintain clarity, the said ADD Notification provides that Wheel Loaders Tariff Entry 84295900 and 84295100 of the First Schedule to the Customs Tariff Act 1975 and falling within the given definition, i.e., ‘self-propelled wheel-mounted equipment with an articulation joint, having front end loading mechanism’ are only included within its ambit.

3. Applicants interpretation of Law/Facts:

3.1 Applicant states that the Company has been engaged in the import of Product under consideration in CBU form for sale in India. The Tariff Entry 8429 51.00 covers ‘Front- end shovel loaders’.

3.2 Further, on a perusal of the Explanatory Notes for Tariff Heading 8429, it appears that the I leading covers self-propelled earth digging, excavating, or compacting ma-chines specifically mentioned under its scope.

3.3 The Applicant submits that while the Product under consideration is classifiable under Tariff Heading 8429, similar to Wheel loaders covered under the Notification No. 17/2023-Customs (ADD) dated 27.12.2023. A table comparing the technical functions and features of the two products has been produced below for easy comparison:

3.4 A bare perusal of the above table highlights the technical differences between the Product under consideration and Wheel loaders. Additionally, as per the information available in public domain, Skid Steer Loader are technically different from Wheel Loaders.

3.5 The Applicant submit that amongst all, one major technical difference between the two products, which categorically excludes it from the scope of ADD Notification is that it lacks articulation t joints. In other words, unlike a Wheel loader, the Product under consideration is single frame machine and its chassis/body is not separated into a front and back section.

3.6 The Notification No. 17/2023-Customs (ADD) dated 27.12.2023 categorically provides that it covers Wheel loaders classified under Tariff Entry 8429.59.00 and 8429.51.00 of the Customs tariff when imported into India from China. Further, the said Notification defines the term ‘Wheel loaders’ as “self-propelled wheel-mounted equipment with an articulation joint, having front end loading mechanism”.

3.7 In relation to the scope of ADD Notification, the Applicant submit that the Product under consideration should not be subject to levy of ADD for the following two reasons:

• While the FISN of both the products is same but the form and nature of product un-der consideration is distinct from Wheel Loaders.
• It is not categorically covered under the scope of ADD Notification. And the state-ment of law is that ambiguity in a taxation statute should be interpreted strictly and in the event of ambiguity the benefit should go to the importer.

3.8 The ADD Notification provides that Wheel Loaders covered under HSN 8429.59.00 and FISN 8429.51.00 of the Customs tariff are covered under its ambit. In its regard, the Company submit that while the product under consideration is classifiable under HSN 8429.51.00 of the Customs tariff, its nature is distinct from Wheel loaders as mentioned in above table. In other words, the product is not covered under the ADD notification according a plain reading of the definition of Wheel Loader provided in ADD notification.

4. Port of Import and reply from jurisdictional Commissionerate:

4.1 The applicant in their CAAR-1 indicated that they intend to import the subject goods i.e. Skid Steer Loader at the jurisdiction of Office of the Commissioner of Cus-toms, Sea Customs, Channai. The application was forwarded to the Office of the Commissioner of Customs, Sea Customs, Chennai for their comments on 27.06.2024. The Chennai Commissionerate vide their letter dated 09.08.2024 submitted that Skid Steer Loaders are self-propelled wheel mounted equipment, they have technical difference when compared to wheel loaders. Wheel loaders have articulation joints whereas skid steer loaders do not have any articulation joint, instead they achieve maneuverability through a unique steering mechanism, where the wheels on each side can move independently of each other. By varying the speed and direction of the wheels on each side, the loader can ‘skid’ to turn, allowing for very tight turns and high maneuverability in confined spaces. This is different from articulated loaders, which have a pivot joint in the middle that allows the front and rear sections to move independently. The subject goods does not have any articulation joint, therefore, the same does not fulfill the criteria of Wheel Loaders upon which ADD is applicable in terms of Notification No. 7/2023-Customs (AI)D) dated 27.12.2023.

5. Details of Personal Hearing

5.1 A personal hearing was held on 31.07.2024 at 12.00 PM. Shri Vijay S. Chauhan, Shri Ramachandran and Shri Karthikeyan, authorized representatives on behalf of the Appellant, appeared for the hearing and they contended that the product Skid Steer Loader falling under CTI 84295100 does not qualify as Wheel Loader falling under ADD Notification due to technical difference in both products. They explained that the product i.e. Skid Steer Loaders and Wheel Loaders are two different products and are well known in trade and industry differently, in spite of same tariff item given in the Customs Tariff Act. They relied upon the literature available in the product catalogue of the different manufactures including their own one. As per their contention, Motor Vehicle Act also support that both products are different. They also submitted a copy of Final Finding of DGTR (MOC&I) in support of their contention.

Shri Vikram, Appraising Officer, Group-V, Chennai Customs appeared online for hearing and he endorsed the view of the Applicant.

DISCUSSION AND FINDINGS

6.1 I have considered all the materials placed before me in respect of the subject goods. I have gone through the submissions made by the applicant during the personal hearing. I have also gone through the response received from the Chennai Customs Commissionerate. Therefore, I proceed to pronounce a ruling on the basis of information available on record as well as existing legal framework.

6.2 The Applicant has sought advance ruling in respect of the following questions:

a. Skid Steer Loaders do not qualify as Wheel Loaders covered under Notification No. 17/2023-Customs (ADD) dated 27.12.2023 due to technical differences in both the products.

b. The subject product i.e. Skid Steer Loader under consideration shall not be subject to imposition of ADD in terms of the above notification.

6.3 At the outset, I find that the issue raised in the both questions is squarely covered under Section 28H(2) of the Customs Act, 1962 being a matter related to applicability of notification in respect of tax or duties under the provisions of this Act. The issue before me is whether the Notification No. 17/2023-Customs(ADD) dated 27.12.2023 is applicable for levy of Anti-Dumping Duty on the import of ‘Skid Steer Loader’ or otherwise.

6.4 Before deciding on the issue, let me deliberate on the legal framework prescribed in Customs Tariff Act, 1975, Chapter/ Section notes along with HSN explanatory notes. As per Rule 1 of GRI, the titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes.

6.5 I find that the applicant has been classifying the product i.e. Skid Steer Loader in CBU form under CTI 84295100 of the first schedule of Customs Tariff Act, 1975. The relevant portion of CTH 8429 is reproduced below for ease of reference:

6.6 On perusal of Explanatory Notes for Tariff I-leading 8429, self-propelled shovel loaders arc wheeled or crawler machines with a front-mounted bucket which pick up material through motion of the machine, transport and discharge it. The Applicant submitted that the product i.e. Sk d Steer Loader is a self-propelled wheel mounted equipment used for excavating soil 71^–om the ground and it has a front-end loading mechanism. Thus, the subject goods i.e. Skid Steer Loader is classifiable under CTI 84295100 (Front-end shovel loaders) as claimed by the Applicant.

6.7 I find that the Central Government vide Notification No. 17/2023-Customs (ADD) dated 27.12.2023, has imposed anti-dumping duty on the import of ‘Wheel Loaders’ falling under tariff item 84295900 and 84295100 of the First Schedule of the Customs Tariff Act, 1975, originating in, or exported from China PR, and im-ported into India. The relevant portion of the notification is reproduced as below for ease of reference:

……………………Now, therefore, in exercise of the powers conferred by sub-sections (1) and (5) of . section 9A of the Customs Tariff Act read with rules 18 and 20 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the Central Govern-ment, after considering the aforesaid final findings of the designated authority, hereby imposes on the subject goods, the description of which is specified in column (3) of the Table below, falling under tariff heading of the First Schedule to the Customs Tariff Act as specified n the corresponding entry in_ co.14.i,(2),Originating in the country as specified in the corresponding entry in column (4), exported from the countries as specified in the correspond-ing entry in column (5), produced by the producers as specified in the corresponding entry in column (6), and imported into India, an anti-dumping duty calculated at the rate as specified in the corresponding entry in column (7), of the said Table, namely:-

TABLE

‘Wheel loader” is a self-propelled wheel-mounted equipment with an articulation joint, having front end loading mechanism.

Wheel loader imported in the form of completely built unit (CBU) or semi-knocked down (SKD) are included within the scope of the investigation. However, imports of wheel loader in completely knocked down (CKD) or component form are excluded from the scope of the investigation.

A wheel loader in semi-knocked down (SKD) form consists of the machine body/chassis fitted with an engine, transmission, or axle in a single unit, which may or may not be fitted with one or more other components.

Explanation: If chassis/machine body is imported with-out an engine, transmission or axle _.fitted into it, no anti- dumping duties shall be payable.

6.8 It is apparent from the above provision that ADD is imposable on ‘Wheel Loaders’ in the form of completely built unit (CBU) or semi-knocked down (SKD) falling under tariff item 84295900 and 84295100 of the First Schedule of the Customs Tariff Act, 1975. Now the issue before me is whether the subject goods i.e. Skid Steer Loaders and the Wheel Load-ers are the same or otherwise and that would Skid Steer Loader attracts ADD in terms of Notification No. 17/2023-Customs(ADD) dated 27.12.2023 cited supra.

6.9 I find that the Applicant has stated that Skid Steer Loader is a self-propelled wheel- mounted equipment used for excavating soil from the ground. It operates without an articulation joint and has a front-end loading mechanism. It is capable of perform-ing various functions including pushing material from one location to another, loading material into a truck or trailer, performing variety of digging and grading operations etc. The said Product is operated through, joysticks located in the operator station. They can be maneuvered left and right by engaging only one side of the machine’s wheels, allowing for a skidding motion. The wheels of these loaders typically have no separate steering mechanism and hold a fixed straight alignment it on the body of the machine. They possess the capability of zero-radius turning, by driving one set of wheels forward while simultaneously driving the opposite set of wheels in reverse.

6.10 The Applicant further stated that one major technical difference be-tween the two. products i.e. Skid Steer Loader and Wheel Loader, which categorically excludes it from the scope of ADD Notification is that it lacks articulation joints. In other words, unlike a Wheel loader, the Skid Steer Loader is a single frame machine and its chassis/body is not separated into a front and back section.

6.11 Before deciding the matter, we understand the both products i.e. Skid Steer Loader and Wheel Loader and technical difference between them.

I note that Skid Steer Loader is a compact, versatile piece of heavy equipment used for various construction and landscaping tasks. It features a small frame with lift arms that can attach to different tools and attachments, such as buckets, forks, and graders. The name “skid steer” comes from its unique steering mechanism, where the left and right wheels (or tracks) can be driven at different speeds or directions, allowing for tight turns and maneuverability in con-fined spaces. These machines are commonly used for digging, lifting, grading, and transporting materials.

A wheel loader is a type of heavy equipment designed primarily for loading and transporting materials. It features an articulation joint between the front and rear sections of the machine, allowing for greater maneuverability and stability. This design enables the front end of the loader to move independently from the rear, which is particularly useful for navigating tight spaces and uneven terrain. The articulation joint enhances the loader’s turning radius and helps distribute weight more evenly, improving traction and reducing the risk of tipping.

Thus, it is clear that Skid Steer Loader does not have any articulation joint unlike the Wheel Loader. For better understanding, images of both products are reproduced as below for ease of reference:

6.12 On careful examination of ADD Notification No. 17/2023-Customs (ADD) dated 27.12.2023, I find that ADD is applicable on the product ‘Wheel Loaders’ in the form of completely built unit (CBU) or semi-knocked down (SKD) falling under tariff item 84295900 and 84295100 of the First Schedule of the Customs Tariff Act, 1975. Further, the notification itself defines the terms “Wheel loader” as ‘a self-propelled wheel-mounted equipment with an articulation joint, having front end loading mechanism’. Ongoing through the technical specification, catalogue, literature and information available in open sources as wells as details provided by the Applicant about these products, I observed that the subject goods i.e. Skid Steer Loader does not have any articulation joint as against the defined Wheel Loaders in Notification No. 17/2023-Customs (ADD) dated 27.12.2023 for the purpose of attracting anti-dumping duty. As the qualifying condition for the said notification is not satisfied, 1 find that the Skid Steer Loader does not comes under the purview of Notification No. 17/2023-Customs (ADD) dated 27.12.2023 for the said purpose.

6.13 Hence, it is seen that the Skid Steer Loader is technically different from the Wheel Loaders as it lacks articulation joint. I am of the view that the subject goods i.e. Skid Steer Loader and the Wheel Loader are not one and the same, for the purpose of ascertaining the applicability of the ADD Notification in terms of definition of ‘Wheel Loader’ used in the Notification No. 17/2023-Customs (ADD) dated 27.12.2023.

6.14 The concerned Jurisdictional Commissionerate vide their letter dated 09.08.2024 has stated that the Skid Steer Loader does not have any articulation joint and therefore, the item does not fulfill the criteria of Wheel Loaders upon which ADD is applicable as per Notification No. 17/2023-Customs (ADD) dated 27.12.2023. 1 am in agreement with the department’s view that the subject goods are not eligible for imposing ADD as per said notification.

7. On the basis of foregoing discussions and findings, 1 reach to conclusion that the subject product .e. Skid Steer Loader does not qualify as Wheel Loader due to technical difference and same does not fall within the scope of ADD in terms of Notification No. 17/2023-Customs (ADD) dated 27.12.2023 for the reasons as discussed above.

8. I rule accordingly.

(Prabhat K Rameshwaram)
Customs Authority for Advance Rulings, Mumbai

F. No. CAAR/CUS/APPL/65/2024-0/o Comm r-CAAR-Mumbai

Dated: 22-10-2024