In re Samsung India Electronics Private Limited (CAAR Mumbai)
Samsung India Electronics Private Limited filed an application before the Customs Authority for Advance Rulings (CAAR), Mumbai, seeking a ruling under Section 28-H of the Customs Act, 1962. The applicant requested classification of Indoor Units (IDUs) and Outdoor Units (ODUs) of split air conditioners proposed to be imported without Printed Circuit Board Assembly (PCBA) and without refrigerant, under two different import models. They also sought confirmation on eligibility for a 5% preferential duty rate under Notification No. 152/2009-Customs, subject to Rules of Origin requirements under Notification No. 187/2009-Customs (NT).
Under Model-A, the applicant proposed to import IDUs without PCBA and refrigerant. After import, these IDUs would be assembled in India with locally added PCBAs and refrigerant. The corresponding ODUs for these IDUs would be manufactured in India. Under Model-B, both IDUs and ODUs would be imported without PCBAs and refrigerant. These units would arrive in separate consignments and separate shipments against different purchase orders for the purpose of building inventory and manufacturing split air conditioners based on market demand.
The applicant’s representative reiterated in the personal hearing that the imported items should be classified as parts of split air conditioners under Customs Tariff Item (CTI) 84159000. They argued that despite being incomplete units, their technical features aligned them more with “parts” rather than with complete machines. They asserted eligibility for a preferential duty rate under Notification No. 152/2009-Customs. They relied on Note 2(b) of Section XVI, Supreme Court decisions including Wood Craft Products Ltd. and Business Forms, and jurisprudence stating that classification must be guided by tariff headings and relevant section or chapter notes.
