2024(09)LCX0233(AAR)
Mahavir Jain Aradhna Kendra
decided on 26-09-2024
CUSTOMS AUTHORITY FOR ADVANCE RULINGS
NEW CUSTOM HOUSE, BALLARD ESTATE, MUMBAI - 400 001
E-MAIL: cus-advrulings.mum@gov.in
The 26th day of September, 2024
Ruling Nos. CAAR/Mum/ARC/151/2024
in
Application No. CAAR/CUS/APPL/66/2024 - O/o Commr-CAAR-MUMBAl
| Name and address of the applicant: | M/s.
Mahavir Jain Aradhna Kendra, Office At & PO Nabhoi, TA: Gandhinagar, Village : Nabhoi, Gujarat 382007 |
| Commissioners concerned: | I. The
Commissioner of Customs (Import), Mundra, Mudra Custom House, Mundra Port |
| Present for the applicant: | Shri Ashwani Kumar Prabhakar, Advocate. |
| Present for the Department: | None. |
Ruling
M/s. Mahavir Jain Aradhna Kendra (having IEC No. AADTS7140Q) (hereinafter referred to as 'the applicant', in short) filed application (CAAR-I) for advance ruling before the Customs Authority for Advance Rulings, Mumbai (CAAR in short). The said application was received in the secretariat of the CAAR, Mumbai on 05.06.2024 along with enclosures in terms of Section 28H (I) of the Customs Act, 1962 (hereinafter referred to as the 'Act' also). The applicant is seeking advance ruling on appropriate classification of the item/ product import of Furniture/ Display Cases in SKD/CKD form imported in different consignments and its eligibility for the duty Exemption benefit as per ASEAN-India Free Trade Agreement (as per CBIC Notification No. 46/2011 dated 01.06.2011).
2. Submission by the
Applicant:
2.1 M/s Shri Mahavir Jain Aradhna Kendra (IEC: AADTS7140Q) intends to import
furniture/ cabinets, classifiable under CTH 9403), for the Museum in CKD/ SKD
form from Singapore for their Koba Museum Project in different consignments by
availing duty exemption in accordance with provisions of the Customs Tariff
[Determination of Origin of Goods under the Preferential Trade Agreement between
the Governments of Member States of the Association of Southeast Asian Nations
(ASEAN) and the Republic of India] Rules, 2009, published in the notification of
the Government of India in the Ministry of Finance (Department of Revenue), No.
189/2009-Customs (N.T.), dated the 31st December, 2009 and Notification:
46/2011-Cus. dated Ol-Jun-2011, as amended from time to time. The applicant
seeks to obtain an advance ruling on appropriate classification of the
item/product import of Furniture in SKD/CKD Form imported in different
consignments and its eligibility for the duty exemption as per the ASEAN-India
Free Trade Agreement (as per CBIC Notification No.46 dated 01.06.2011).
2.2 As regards the eligibility of getting benefit of duty exemption under ASEAN-lndia Free Trade Agreement as per the CBIC Notification: 46/2011-Cus. dated 01 June, 2011 for the import of Furniture/ cabinets in CKD/ SKD Form under CTH 9403 in different consignments from Singapore the applicant has submitted that it may be noticed that AGREEMENT ON TRADE IN GOODS UNDER THE FRAMEWORK AGREEMENT ON COMPREHENSIVE ECONOMIC COOPERATION BETWEEN THE REPUBLIC OF INDIA AND THE ASSOCIATION OF SOUTHEAST ASEAN NATIONS is silent about import of goods in CKD / SKD Form. It means there is no restriction for extending benefit of duty exemption under ASEAN-INDIA FREE TRADE AGREEMENT to the import of goods in CKD/ SKD form Singapore provided the said goods qualify the origin criteria as per Rule 3 of the Customs Tariff [Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of Member States of the Association of Southeast Asian Nations (ASEAN) and the Republic of India] Rules, 2009.
2.3 Therefore, from the above
submissions, it is very clear that the subject goods viz. Furniture/Cabinet in
CKD/ SKD Form while being imported from Singapore (Country of Origin) in
different consignments are to be classified under CTH 9403 and are eligible for
getting benefit of duty exemption in accordance with provisions of the Customs
Tariff [Determination of Origin of Goods under the Preferential Trade Agreement
between the Governments of Member States of the Association of Southeast Asian
Nations (ASEAN) and the Republic of India] Rules, 2009, published in the
notification of the Government of India in the Ministry of Finance (Department
of Revenue), No. 189/2009-Customs (N.T.), dated the 31st December, 2009
rescinded by Notification: 46/2011-Cus. dated Ol-Jun-2011, as amended from time
to time.
3. Port of Import and reply from jurisdictional Commissionerate:
3.1 The applicant in their CAAR-1 indicated that they intend to import the subject goods i.e. Furniture/ Display Cases in CKD/SKD condition expected to be imported from Singapore at the jurisdiction of Office of the Commissioner of Customs (Import) Mundra. The application was forwarded to the Office of the Commissioner of Customs (Import) Mundra for their comments on 15.07.2024 and 13.08.2024, however, no response has been received from the Office of the jurisdictional Commissioner.
4.Details of Personal Hearing:
4.1 A personal hearing was held on 26.07.2024 Shri Ashwani Kumar Prabhakar,
Advocate appeared for the hearing on behalf of the applicant. He reiterated the
contention made in the application and submitted that the subject import goods
i.e. furniture/ display cases in CKD/SKD form to be imported in different
consignment are to be classified under CTH 9403 and merit exemption/ duty
benefit under ASEAN Preferential Trade Rules 2009 read with Customs Notification
189/2009 Custom (NT) rescind by 46/2011 and as amended. He further submitted a
compendium of case laws and circular in support of their claim. They relied upon
the following case laws :
(a) 2018(10) G.S.T.L. 3(SC)
(b) 2006(193) E.L.T. I38(A.A.R.)
(c) Ruling No. CAAR/Mum/ARC/48-51/2022 in Application No. CAAR/CUS/APPL/71-74/2022 O/o Commr-CAAR-Mumbai decided on 29.12.2022
(d) (2023) 2 Centax 74 (A.A.R.-Cus-Del.)/2023 (383) EXT. 224 (A.A.R-Cus-Del) Before the Customs Authority for Advance Ruling, New Delhi.
It was specifically asked as to how it can be ascertained the correlation between the CKD/ SKD parts for arriving at the discovery about the consignment as a complete furniture, the applicant sought one week time, that is granted.
4.2 Nobody appeared from the department side for the Personal Hearing nor any written submission is provided by the department either.
5. Additional submission
5.1 With regard to the question raised during Personal Hearing as to how the
correlation between CKD -SKD can be established and how it can be ascertained to
be complete furniture the Applicant has submitted as under:
"Each shipment would have the
complete piece of a single unit of the furniture being imported together in a
single shipment and the furniture components which will make one single unit /
single piece of furniture though packed separately for packing and shipping
purposes would not be shipped in separate shipments. The Applicant would he able
to establish this with a detailed packing list as well as a schematic diagram
for each piece. "
6. DISCUSSION AND FINDINGS
6.1 I have considered all the materials placed before me in respect of the
subject goods. I have gone through the case records and all the submissions made
by the applicant during the personal hearing and the clarification provided by
the applicant. Therefore, I proceed to pronounce a ruling on the basis of
information available on record as well as existing legal framework having
bearing on the classification of the goods in question under the first schedule
of the Customs Tariff Act, 1975.
6.2 The first question requires ruling on classification of goods i.e. Furniture/ Display Cases in CKD/SKD condition expected to be imported from Singapore. At the outset, I find that the issue raised in the first question is squarely covered under Section 28H(2)(a) of the Customs Act, 1962 being a matter related to classification of goods under the provisions of this Act.
6.3 Before deciding on the issue, let me deliberate on the legal framework prescribed in Customs Tariff Act, 1975, Chapter/ Section notes along with HSN explanatory notes. The legal position regarding classification of goods in CKD/SKD conditions are fairly settled. As per Rule 2(a) of the GRI, "any reference in a heading to any article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished by virtue of this rule), presented unassembled or disassembled. Thus, when any article such as CFL is imported in CKD/SKD condition, its classification for the purpose of assessment would be done as complete or finished article in terms of the said Rule 2(a). Accordingly, when anil-dumping duty is attracted on any article then it is also to be levied if the said article is imported on CKD/SKD condition either together of in one lot or in part shipments. "
6.4 Here, the terms 'as presented' and 'essential character' are important to decide the case at hand. These two terms are employed in the proviso of the Rule 2(a) mentioned above. It is observed that the incomplete or unfinished articles may be classified under the same heading wherein the complete or finished article are classified, provided, the articles/ goods as presented before the Customs for clearance have the essential character of the complete or finished articles/ goods.
6.5 Therefore, by virtue of this rule, in the instant case, I find that the applicant has proposed to import Furniture/ Display Cases in CKD/SKD condition and has clarified that each shipment would have the complete piece of the furniture being imported together in a single shipment and the furniture components which would make a single unit/ single piece of furniture though packed separately for packing and shipped purposes would not be shipped in separate shipments. Thus the goods in CKD/SKD form imported under one invoice, and presented before the Customs for clearance under a single Bill of Entry, may be classified under the heading which is appropriate to classify the complete or finished articles/ goods.
6.6 I find that there are no general or specific tariff heading/entry under the first schedule to Customs Tariff Act 1975 which captures the exact description of 'Furniture/ Display Cases in CKD/SKD condition'.
6.7 1 find that the applicant has
proposed that the subject goods can be classified under Tariff Entry 9403. The
relevant portion of CTH 9403 is reproduced below for ease of reference:
9403
OTHER FURNITURE AND PARTS THEREOF
9403 10
Metal furniture of a kind used in offices
:
9403 10 10
Of steel
9403 10 90
Other
9403 20
Other metal furniture :
9403 20 10
Of steel Other
9403 20 90
Other
9403 30
Wooden furniture of a kind used in
offices
9403 30 10
Cabinetware
9403 30 90
Other
9403 40 00
Wooden furniture of a kind used in the
kitchen
9403 50
Wooden furniture of a kind used in the
bed room :
9403 50 10
Bed stead Other
9403 50 90
Other
9403 60 00
Other wooden furniture
9403 70 00
Furniture of plastics
9403 82 00
Furniture of other materials, including
cane, osier, bamboo or similar materials
Of bamboo
9403 83 00
Of rattan
9403 89 00
Other
9403 91 00
Of wood
9403 99 00
Other
6.8 While examining the scope of CTH 9403 it is found that as per HSN
Explanatory Notes, heading 9403 covers furniture and parts thereof, not covered
by the previous headings. It includes furniture for general use (e.g.,
cupboards, show-cases, tables, telephone stands, writing desks, escritoires,
book cases and other shelved furniture (including single shelves presented with
supports for fixing them to the wall, etc.), and also furniture for special
uses.The heading includes furnitures for:
(1) Private dwellings, hotels, etc., such as: cabinets, linen chests, bread chests, log chests; chests of drawers, tall boys; pedestals, plant stands; dressing-tables; pedestal tables; wardrobes, linen presses; hall stands, Umbrella stands; side-boards, dressers; cupboards; food-safes; bedside tables; beds (induding wardrobe beds, camp-beds, folding beds, cots,etc); needlework tables stools and foot-stools (whether or not rocking) designed to rest the feet, lire screens; draught-screens; pedestal ashtrays; music cabinets, music stands or desks; play-pens; serving trolleys (whether or not fitted with a hot plate).
(2) Offices, such as: clothes lockers, filing cabinets, filing trolleys, card index files, etc.
(3) Schools, such as: school-desks, lecturers' desks, easels (for blackboards, etc.).
(4) Churches, such as: altars, confessional boxes, pulpits, communion benches, lecterns, etc.
(5) Shops; stores, Workshops, etc; such as: counters; dress racks; shelving units; compartment or drawer cupboards; cupboards for tools, etc.; special furniture (with cases or drawers) for printing-works
(6) Laboratories or technical
offices, such as: microscope tables; laboratory benches (whether or not with
glass cases, gas nozzles and tap fittings, etc.); fume-cupboards; unequipped
drawing tables.
6.9 The applicant has provided some photograph of the proposed import goods
which is given below:
6.10 On going through the subject photographs of the proposed import goods and description provided, it is observed that the subject goods are different kinds of demountable show cases, table top show cases, wall mounted show cases, gallery show cases, crafting show cases for cartier. show cases for art gallery, etc. The applicant has submitted that these goods are to be imported in CKD/SKD form for Koba museum project. The subject goods are meant to be used in museum and proposed to be finally assembled to make a complete finished set/ sets. Accordingly, I find that the subject goods merit Classification under CTH 9403 as 'Other furniture and parts' (for the museum project). Accordingly, I find that the subject goods merit Classification under CTH 9403 as 'Other furniture and parts' (for the museum project).
6.11 Now, I take up the second question regarding eligibility for the duty exemption as per the ASEAN India Free Trade Agreement (as per CBIC Notification No. 46 dated 01.06.2011). At the outset, we find that the issue raised in the first question is squarely covered under Section 28H(2)(b) of the Customs Act, 1962 being a matter related to applicability of Notification issued under the provisions of this Act.
6.12 Notification No.
46/2011-CUS. dated 01.06.201 I exempts goods of the description as specified in
column (3) of the Table appended thereto and falling under the Chapter, Heading,
Sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975
(51 of 1975) as specified in the corresponding entry in column (2) of the said
Table, from so much of the duty of customs leviable thereon as is in excess of
the amount calculated at the rate specified in,—column (4) of the said Table,
when imported into the Republic of India from a country listed in APPENDIX-I; or
column (5) of the said Table, when imported into the Republic of India from a
country listed in APPENDIX-I1 :
Provided that the importer proves to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, that the goods in respect of which the benefit of this exemption is claimed are of the origin of the countries as mentioned in J [Appendix I or Appendix II, as the case may be], in accordance with provisions of the Customs Tariff [Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of Member States of the Association of Southeast Asian Nations (ASEAN) and the Republic of India] Rules, 2009, published in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 189/2009-Customs (N.T.), dated the 31st December, 2009At All goods specified in column (2) at S. No. 966 (I) of Notification No. 046/2011 -Cus dated 01.06.2011 provides said exemption for the goods.
6.13 Conditions/provisions and procedures stipulated in AIFTA, Customs Notification no 46/2011, Section 28 DA of the Customs Act, 1962 and CAROTAR 2020 need to be verified in each case. Singapore is listed at sr. no. 2 in the Appendix 1 of this notification. The benefit of exemption under Notification 46/2011- Cus. is available to all goods falling under CTH 9403 of the first schedule of the Custom Tariff Act, 1975.
6.14 On the basis of foregoing
facts on record, discussions and observations, I have come to the conclusion
that if the applicant complies with the conditions/instructions/provisions (as
amended) provided in the Notification No. 46/2011-Cus dated 01.06.2011, the
Governments of Member States of Association of Southeast Asian Nations (ASEAN)
and the Republic of India, Rules, 2009, published in the notification of the
Government of India in the Ministry of Finance (Department of Revenue), No.
189/2009-Customs (NT), dated 31st December 2009, Section 28DA of Customs Act,
1962, Customs (Administration of Rules of Origin under Trade Agreements) Rules,
2020 issued vide Notification No. 81/2020- Customs (N.T.) dated 21st August,
2020 and any other conditions insofar as they relate to eligibility to avail the
benefits of Preferential Trade Agreements- the Applicant can claim benefit of
duty exemption under the Preferential Trade Agreement
7. On the basis of the foregoing discussions and findings, I answer in positive
to both the questions asked in the present application and rule that
a) The Furniture/ Display cases, imported for the Museum from Singapore in CKD/SKD form in different consignments imported under one invoice, and presented before the Customs for clearance under a single Bill of Entry, having essential character of the complete and finished Furniture/ Display cases merits classification under the CTH heading 9403 and the said "products' are classifiable at 8-digit level according to their respective composition and characteristics under the said chapter heading 9403.
b) Eligibility of duty exemption as per the Asean India Free Trade Agreement (as per the CBIC Notification 46/2011 Customs dated 01.06.2011) with a caveat that the conditions/instructions of the Notification No. 81/2020-Customs (NT) dated 21st August 2020 of are to be complied with at the time of imports.
I rule
accordingly.
(Prabhat K Rameshwaram)
Customs Authority for Advance Rulings, Mumbai
F. No. CAAR/CUS/APPL/66/2024-O/o
Commr-CAAR-Mumbai
Dated :26-09-2024
This copy is certified to be a true copy of the ruling and is sent to:
1. M/s. Mahavir Jain Aradhna
Kendra,
Office At & PO Nabhoi TA: Gandhinagar,
Village : Nabhoi Gujarat 382007
{Email: admin@kpslegals.com}
2. Office of the Commissioner of
Customs,
Group-5, Customs House, Mundra, Kutch-370421 .
Email: commr-cusmundra@gov.in
3. The Customs Authority for
Advance Rulings,
Room No. 24, New Customs House,
Near IGI Airport, New Delhi-110037.
Email: cus-advrulings.del(<7)gov.in
4. The Principal Chief Commissioner of Customs,
Mumbai Customs Zone-I, Ballard Estate,
Mumbai -400001.
Email: ccu-cusmum1@nic.in
5. The Commissioner (Legal), CBIC
Offices,
Legal/CX.8A, Cell, 5th floor, Hudco Vishala Building,
C-Wing, Bhikaji Cama Place, R. K. Puram, New Delhi - 110066.
Email: anishgupta.irs@gov.in. commr.legal-cbec@nic.in
6. The Member (Customs), Central
Boards of Indirect Taxes & Customs, North Block,
New Delhi-110001.
Email: mem.cus-cbec@nic.in
7. The Webmaster, Central Boards
of Indirect Taxes & Customs.
Email: webmaster.cbec@ icegate.gov. in
8. Guard file.
(Vivek Dwivedi)
Dy. Commissioner & Secretary
Customs Authority for Advance Rulings,
Mumbai