While classification of goods has always been a disputable area, parts of railway and automobiles have been particularly under the scanner. This has been the scenario across Customs, Central Excise, VAT and now, GST laws.
Adding another point of debate, recently, in the case of Westinghouse Saxby Farmer Ltd., the Supreme Court has held that relays manufactured by the appellant which were used solely as part of the railway signalling/ traffic control equipment should be classified under Chapter Heading 8608 as opposed to Chapter Heading 8536 of the Central Excise Tariff Act, 1985. The Apex Court noted that while the exclusion under Note 2(f) may be of goods which are capable of being marketed independently as electrical machinery or equipment, for use otherwise than in or as Railway signalling equipement, those parts which are suitable for use solely or principally with an article in Chapter 86 cannot be taken to a different Chapter as the same would negate the very object of group classification.
We, invite you to a session of academic, intellectual and practical discussion on the judgement and what the decision means to the industry, how does its ratio decidendi impact past and present operations, possible course of action, areas that deserve further attention and much more.
Some of the key points intended to be covered are-
- Supreme Court decision vs criteria under HSN Notes for classification of parts of railway and automobiles.
- Relevance of Note 2 to Section XVII to the Tariff, and similar Chapter/Section notes.
- Is it the end of the road for parts specifically designed for railway?
- Requirement for renegotiating contracts, particularly with Indian Railways.
- Impact of ‘suitability for use test’ on other goods.
- Need for revisiting existing classification of parts of automobiles and railways under Customs and GST – particularly those specifically mentioned under Chapters 84, 85, 90, 94 etc.
- Impact on ongoing litigations in Central Excise, Customs, VAT and GST laws on classification of parts of railways and automobiles.
- Revisiting current business models.
- Impact on inverted duty structure without refund in respect of railway parts.
- B.L Narasimhan, Principal Partner
- Shivam Mehta, Partner
- Rohan Murlidharan, Principal Associate