2018 (11) TMI 1267 – AUTHORITY FOR ADVANCE RULING, TAMILNADU – 2018 (19) G. S. T. L. 344 (A. A. R. – GST) – Classification of manufactured item – automotive chains (i.e., silent chains used in petrol engines and roller chains used in diesel engines) – whether classified under HSN 8409 or 7315?
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Held that:- It is evident that the items are transmission chains which are used in automotive engines and machinery for transmitting mechanical power from one shaft to another and are made of steel. They are articulated chains i.e. made of a series of links or plates which are driven by external sprockets and do not have any other assembly. The Applicant supplies these mainly to automotive industries where they are used in internal combustion engine, they synchronizes the rotation of the crankshaft and the camshaft(s) so that the engine’s valves could open and close at proper time – It is seen that articulated link chains of steel such as roller chain, inverted tooth (silent) chains are i
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Schedule to the Customs Tariff Act, 1975 as applicable to GST as per Explanation (iii) to Notification 1/2017 -Central Tax (Rate) dt 28.06.2017 and G.O. Ms No. 59, Commercial Taxes and Registration (B1) dt 29th June 2017. – ORDER No. 17/AAR/2018 Dated:- 29-10-2018 – MS. MANASA GANGOTRI KATA, IRS AND SHRI. S. VIJAYAKUMAR, M.SC., MEMBER Note : Any Appeal against the Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a referenc
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e and sale of following automotive chains which are used as a major component in manufacture of motor engines for motor vehicles (i.e., for both two wheelers and four wheelers). Silent chains/ Inverted tooth chains (Used in Petrol engines) Roller chains/ Bushing (Used in Diesel engines) These automotive chains are part of internal combustion engines that synchronizes the rotation of the crankshaft and the camshaft(s) so that the engine s valves could open and close at proper times. As the automotive chains manufactured by the Applicant are used in further manufacture of engines for motor vehicles, the Applicant had classified their product under following HSN code: HSN Description as per Central Excise tariff schedule 8409 Parts suitable for use solely or principally with the engines of heading 8407 or 8408 8409 9191 ………of petrol engines for motor vehicles 8409 9141 ……..of diesel engines for motor vehicles 2.2. Even under the GST legislation, the Appl
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for Chapter 84 of Customs Tariff, this Section does not cover parts of general use. Notes to Section XV for chapter 73 clarifies that parts of general use includes articles of heading 7315. Further, there is no specific reference to Roller or Silent Chains in Chapter 84. Though automotive chains are made as per the specifications of the engines, they would be classifiable under HSN 7315. Further, explanatory notes to HSN refers to Transmission chains for chains, automobiles or machinery under HSN 7315 and international classification mentions Articulated Link chains and parts thereof . They have relied on the decision of Hon ble CESTAT, WZB in the case of M/S. Impex Corporation Vs. Commissioner of Customs (1998 (103) E.L.T. 548 (Tribunal)) = 1998 (2) TMI 262 – CEGAT, CALCUTTA, wherein the Tribunal has held that steel chains used as parts of agricultural machinery are specifically covered under Tariff Heading 7315 and Voltas Ltd vs Commissioner of Customs, Mumbai (2003 (158) E.L.T (Tri
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ompany, copy of documents relating to exports of Chains by their group companies under HSN 7315. The Applicant further furnished a Technical write-up of the chains with samples, invoices, sample contracts, import documents. 3.2 The submissions of the Applicant were examined. In the case at hand from the technical write-up furnished by the Applicant, it is seen that the product in question are timing chains or Transmission Chains which are used for chain drive mechanism i.e., way of transmitting mechanical power from one shaft to another and are made of steel. They are used for transmitting power between the driver and driving shafts in industrial and automotive applications. Roller chains or Roller bush chains are the most commonly used for transmission of mechanical power on many kinds of domestic, industrial and agricultural machinery including conveyors, cars, motorcycles etc. It consists of a series of short cylindrical rollers held together by side links and driven by a toothed wh
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of links or plates which are driven by external sprockets and do not have any other assembly. The Applicant supplies these mainly to automotive industries where they are used in internal combustion engine, they synchronizes the rotation of the crankshaft and the camshaft(s) so that the engine s valves could open and close at proper time. 4.2 In terms of explanation (iii) and (iv) to Notification No. 1/2017 Central Tax (Rate) dt. 28-06-2017, tariff heading, sub-heading, heading and chapter shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 and the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall be applied for the interpretation and classification of goods. 4.3. Chapter 7315 covers Chain and parts thereof, of Iron and Steel and Articulated link chains and parts the
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(2) Anchor or mooring chains; lifting, haulage or towing chains; automobiles skid chains. (3) Mattress chains, chains for sink stoppers, lavatory cisterns, etc. All these chains may be fitted with terminal parts or accessories (e.g. hooks, spring hooks swivels, shackles, sockets, rings and split rings and tee pieces). They may or may not be cut to length, or obviously intended for particular uses. Iron or steel parts of chain specialised as such e.g. side links, rollers, spindles, etc., for articulated chain, links and shackles for non-articulated for non-articulated chain, also fall in this heading. The heading does not cover : (a) Chains having the character of imitation jewellery in the sense of heading 71.17 (e.g. watch chain and trinket chains). It is seen that articulated link chains of steel such as roller chain, inverted tooth (silent) chains are included under 7315 irrespective of their intended use and whether they are cut to length or intended for particular use. In the ins
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r, the heading excludes; (a) Injection pumps (Heading 84.13) (b) Engine crank shafts and cam shafts (heading 84.83) and gear-boxes (heading 84.83). (c) Electrical ignition or starting equipment (including, sparking plugs and glow plugs) (heading 85.11) HSN Explanatory Note (1) (g) of Section XVI which covers chapter heading 84 states as under: 1. This Section does not cover: (a)………………… (g) Parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39) Note 2 to Section XV defines parts of general use as under: 2. Throughout this Nomenclature, the expression parts of general use means: (a) Articles of headings 7307, 7312, 7315, 7317 or 7318 and similar articles of other base metal; Further, the General Notes to Section XV also states: (C) PARTS OF ARTICLES In general, identifiable parts of articles are classified as such parts in their appropriate headings in the Nomenclatur
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