In re Aptiv Component India Private limited (CAAR Delhi)
New Delhi: The Customs Authority for Advance Ruling (CAAR), Delhi, has ruled that imported ‘Ferrite Beads’ are appropriately classified under customs tariff item 8504 50 90, the category for “Other inductors.” The ruling was sought by Aptiv Component India Private Limited to determine the correct classification of these components for import purposes.
The case involved examining whether ‘Ferrite Beads’ fall under 8504 50 90 or 8541 29 00, which relates to certain semiconductor devices. The CAAR reviewed the Customs Tariff Act, Explanatory Notes to the Harmonized System Nomenclature (HSN) for relevant headings (8504 for inductors and 8541 for semiconductor devices), technical specifications of the product, and submissions from the tax authorities. Technical details showed Ferrite Beads are passive components with a coiled conductor and ferrite core, functioning via self-induction to suppress high-frequency noise in electronic circuits, widely used in automotive systems. HSN notes for heading 8504 describe inductors as coils limiting AC flow and include those made as individual components. Conversely, HSN notes for heading 8541 explicitly exclude certain micro-assemblies containing passive components, directing their classification elsewhere, including potentially heading 8504.
Based on the technical characteristics, the CAAR concluded that ‘Ferrite Beads,’ particularly the chip type with an internal coil structure, functionally align with coil-based inductors. Although not specifically named in the tariff, their inductive properties fit the description under heading 8504. The Authority cited several judicial pronouncements supporting the classification of inductive components under heading 8504 and emphasizing the use of HSN Explanatory Notes and functional utility in classification. These included rulings from the Tribunal and the Supreme Court, underscoring the primacy of technical characteristics and HSN guidance in determining the correct tariff entry.
