Page 168 - GSTL_6th August 2020_Vol 39_Part 1

94 GST LAW TIMES [ Vol. 39
10.1 On a joint reading of the above provisions, it is clear that chapter
8710 00 00 covers ‘Tank and its Parts’, provided the Parts satisfy the following
conditions, namely :
(a) They must not be excluded by the provisions of the Note 2 to Sec-
tion XVII
(b) They must be identifiable as being suitable for use solely as princi-
pally with such vehicles; and
(c) They must not be more specifically included in elsewhere in the
Nomenclature
Therefore only those parts which satisfies the above conditions are to be classi-
fied under CTH 8710 00 00 and those which do not satify both the stipulated
conditions as above, are to be covered in the respective CTH.
This view finds support from the decision of Hon’ble Supreme Court in
the case of Intel Design Systems (India) Pvt. Ltd. v. Commissioner of Customs & C. Ex
[2008 (223) E.L.T. 135 (S.C.)], wherein the Apex Court has dealt with ‘Parts sup-
plied for Tanks’. The relevant paras are given as under :
“4. As per Rule 1 on Interpretive Rules, classification of excisable
goods is to be determined according to the terms of the Heading and in
terms of Section/Chapter notes. Note 2(f) to Section XVII (which governs
Chapter 87) excludes the goods viz. electrical machinery and equipment
(Chapter 85). The goods in question i.e. contractors, switches, control box
etc. are the goods used for switching, protecting electrical circuits or for
making connections to or in electric circuit. These parts/components are
specifically covered under CSH 8536.90. The CBEC Circular relied upon by
the assessee is not relevant.
5. As per the Explanatory Notes to HSN the parts falling under
Chapter Heading 8710 would be covered under the said chapter, provided
they fulfill both the conditions i.e. they must be identifiable as being suita-
ble for use solely or principally for such vehicles and that they must not be
excluded by the provisions of Notes to Section XVII. The identifiable parts
under the said heading bodies of armoured vehicles and parts thereof, cov-
er special road wheels for armoured cars, propulsion wheels for tanks,
tracts etc. As per this requirement, the goods should not only be identifiable
to be armoured vehicles, but it should so not have been excluded by Notes
to Section XVII. The Chapter note 2(f) excludes electrical machinery and
equipment falling under Chapter 85. Explanatory Notes to HSN relating to
the parts and accessories excluded by Note 2 specify items with reference to
specific Chapter Heading as per (7)(a), (k) which excludes photographs and
other current collectors for electric traction vehicles, fuses, switches and
other electric apparatus of Heading No. 85.35 or 85.36. The items, therefore,
manufactured by the appellants are identifiable or are in the nature of
goods falling under Chapter Heading 85.36. Since these fall under the cate-
gory of excluded goods under Chapter Notes, even though they are used
specifically solely or principally with the armoured vehicles of Chapter
Heading 8710, they are classifiable under Chapter Heading 8536.90 only as
held by the adjudicating authority”.
HVF has initially requested to clarify whether the 84 parts as listed in their query
No. 4 at Para 8 above shall be considered under 8710 00 00 or not. Subsequently,
during the hearing held on 21-5-2019, they stated that out of these, only 17 items
are being supplied by them and the rest are items which they receive/procure
from vendors and hence they stated that clarification is now sought for these 17
parts only. These parts are :
GST LAW TIMES  6th August 2020  168