The Punjab Appellate Authority for Advance Ruling (AAAR) while confirming the roof mounted air-conditioning unit classified under HSN Heading 8415 ruled that classification of goods should not alter on account of supply to railways.
Applicant Ess Ess Kay Engineering Company Pvt Ltd is engaged in the manufacturing of “Roof Mounted Air Conditioner unit for Passenger Coaches of railways as per Research Design and Standard Organisation (RDSO) specification and drawing
The appellant filed an application for Advance Ruling with the Authority for Advance Ruling, Punjab that that question for consideration was that whether roof mounted Air conditioning unit especially for use in railway coaches (manufactured as per railway design) should be classifiable under HSN- 8415 1090- IGST 28% or under HSN 8607 99 – IGST 18% as parts of Railway Coaches/ Locomotive.
AAR Punjab ruled that the Roof Mounted Air-Conditioning unit manufactured by the applicant is classifiable under HSN Heading 8415 and the classification of the goods shall not alter on account of supply by them to the Railway.
Against this order the applicant filed an appeal before the AAAR.
Sudhir Malhotra counsel for the applicant submits that classification of impugned goods may be done in terms of Note 3 to the Section XVII of Customs Tariffs Act read with corresponding Explanatory notes of the HSN. The principle uses of the goods manufactured are as per the design given by the Railways for exclusive use with the railway coaches only
“Further the applicant submits that the impugned goods are solely and principally used in railways; it has no other use except in railways coaches. It is an integral/ essential part of Air conditioned railways coaches. As per note 3 to section XVII by applying “user test”, the impugned goods are classifiable under HSN 8607”.
Applicant has further adopted the contention that Air conditioned units are to be included in the coach work. It is to be noted that the expression “Coachwork” is not defined in the Customs Tariff Act, 1975.
After considering the submission of the applicant the AAAR consisting member of Rajesh Puri, Chief Commissioner, IRS and Kamal Kishor Yadav, IAS, Commissioner of State Tax Upheld the decision of the AAR Observed that Goods that is Roof Mounted Air-Conditioning unit manufactured by the appellant are classifiable under HSN Heading 8415.
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