CESTAT-New Delhi : Whether since items imported i.e. ‘Tail Brush FIRC’ by assessee was suitable for use principally with Tunnel Boarding Machine (TBM) which was covered under Chapter Heading 8430, revenue’s contention for classifying subject item under Chapter 9603, did not deserve acceptance

CESTAT, New Delhi Bench

Commissioner of Customs, New Delhi Vs. HCC Sansung JV

Dr. Satish Chandra, President And Ashok K. Arya, Technical Member

Order No. C/A/55542/2017-CU(DB)

Customs Appeal No. C/52178/2016

July 27, 2017

ORDER

Ashok K. Arya, Technical Member – Revenue is in appeal against the Order-in-Appeal No.159/2016 dated 04-04-2016 whereunder the item “Tail Brush FIRC” has been classified under Chapter Heading 8431 43 90 of the Customs Tariff.

2. Both the sides represented by Sh. A. K. Singh and Sh. Govind Dixit, ld. ARs and Sh. S.S. Dabas, Advocate for the respondent – assessee have been heard.

3. The Revenue’s main submissions are —

(i) The goods in question are clearly “brushes” even though they are used as “Parts” of a machine. Heading 9603 refers to “Brooms, brushes (including brushes constituting parts of machine, appliances or vehicles)….” This description is not only specific but contains a positive assertion that “brushes constituting parts of machines” are included.

(ii) The Chapter Notes to chapter 96 do not make any exclusion for brushes that are parts of machinery falling under CTH 8430 which would have been the case if the Legislative intent were such.

(iii) Section Note 1(O) of section XVI of HSN clearly stipulates that the section (which includes chapter 84) does not cover “brushes of a kind used as parts of machines”. In the light of this, classification of impugned goods under CTH 843143 as parts of boring or sinking machinery of sub-heading 843041 or 843049 is ruled out.

(iv) Right classification of the subject item should be under Chapter 96035000.

4. Ld. Advocate for the respondent-assessee mainly pleads that:

(i) “Tail Brush FIRC” is part of “Tail Shield of Tunnel Boring Machine” and is manufactured out of steel Plates/ Sheets and brass wire. It is also called “Tail Skin Wire Brush”. The Tail Brush in question is meant for specific performance and is customised for Tunnel Boring Machines. It is fitted on TBM after application of grease for the purpose of stopping the leakage to go into the TBM. The purpose of the Tail Brush is to restrict the flow into the TBM and not the usual cleaning etc.

(ii) The brushes of heading 9603 are used mostly for sweeping, cleaning or for applying and polishing etc. The functional character of the brushes of heading 9603 is cleaning, sweeping and applying etc. and the “brushes constituting machinery parts” are such brushes as are used with road sweepers or with floor polishing machines, or in milling or in paper making machines etc. The Tail Brush in question does not perform any such function. The “Tail Brush FIRC” is a part of the Tail Shield of the TBM and it shields the flow of foreign objects into the TBM. The functional character of the Tail Brush is shielding and thus it is classifiable as a specific part of TBM under heading 8431 rather than under the generic classification of brushes of heading 9603.

5. The facts of the case and submission of both the sides have been carefully considered.

6. The main contention of the Revenue is that Note- 1(O) to Section XVI of Customs Tariff says that brushes of a kind used as parts of machines (heading 9603) are not covered under Section XVI. Section XVI covers Chapter heading 84 and 85 of Customs tariff, thus the argument of the Revenue is that the subject item imported, which has been named as ‘Tail Brush FRIC’ cannot be classified under Chapter 84 but it should go under chapter heading 9603 only.

6.1 On the other hand, the main argument of the respondent- importer is that the subject item is for specific purpose and is customised for tunnel boring machine; the item is part of Tail shield of the Tunnel Boring Machine (TBM), which shields the flow into the Tunnel Boring Machine; functional character of it is shielding, and it will therefore, be classified as specific part of TBM rather than under generic classification of brush.

7. The descriptions for Chapter heading 9603 and further relevant sub headings are given below:

Tariff Item Description of goods
9603 Brooms, brushes (including brushes constituting parts of machines, appliances or vehicles), hand-operated mechanical floor sweepers, not motorised, mops and feather dusters; prepared knots and tufts for broom or brush making; paint pads and rollers; squeegees (other than roller squeegees)
9603 10 00 – Brooms and brushes, consisting of twigs or other vegetable materials, bound together, with or without handles

– Tooth brushes, shaving brushes, hair brushes, nail brushes, eyelash brushes and other toilet brushes for use on the person, including such brushes constituting parts of appliances:

9603 50 00 – Other brushes constituting parts of machines, appliances or vehicles

7.1 The descriptions given for Chapter 8431 and relevant sub-headings of Customs Tariff are given below:

Tariff Item Description of goods
8431 Parts suitable for use solely or principally with the machinery of headings 8425 to 8430
8431 10 – Of machinery of heading 8425:
8431 29 90 – Other……3

– Of machinery of heading 8428

— Of lifts, skip hoists or escalators……

8431 43 – Parts of boring or sinking machinery of sub-heading 8430 41 or 8430 49:
8431 43 10 – Of boring or sinking machinery, self propelled ….
8431 43 90 Other….

7.2 From the descriptions given for the relevant headings / sub headings of Chapter 8431 and for Chapter 9603 given above make it clear that Chapter 8431 covers the parts which are suitable for use solely or principally with the machinery of headings No. 8425 to 8430; whereas brooms and brushes (including brushes, which are part of machines and appliances in general). A reading of Chapter 9603 makes it clear that it covers normal brushes which could also be part of certain machines and appliances. The Revenue’s argument that all the brushes which are part of any machinery have to be covered under Chapter 8431 may not always be correct, if there could be certain brush(es) which are suitable for use solely or principally with the specific machine covered by Chapter Headings 8425 to 8430.

7.3 It appears from the facts that there is no dispute that the item imported is specifically suitable for use solely or principally with the Tunnel Boring Machine (TBM). The respondent has specifically mentioned that the item is customised only for Tunnel Boring Machine (TBM) having the specific purpose of shielding the flow into the TBM. Further, it appears that TBM would be covered under Heading 8430 and when the item imported is solely or principally for use as part the TBM, there should not be any doubt that it would be covered under Chapter Heading 8431 and under its sub-headings 8431 4310 or 8431 43 90.

7.4 The rival classifications for the subject item are 8431 4390 (by the respondent) and 9603 50 00 (by the Revenue). However, in the light of above discussion, right classification for the subject item would be 84314390 only. Revenue’s contentions for classifying the subject item under 9603 5000 do not deserve acceptance mainly on account of the fact that the item imported is suitable for use principally with the machinery namely TBM, which appears to be covered under Chapter Heading 8430 of the Customs Tariff.

8. In the result, the impugned order is sustained and the appeal dismissed as without merits.

[Citation : 2017-Taxcaselaw-66-CESTAT-New Delhi-GST]