2023 (10) TMI 983 - HC - GST

Aluminum Foil Containers Taxed at 12% Under Chapter 7615, Petitioner Wins Classification Challenge Against Revenue Department

M/s. Veeram Natural Products, Represented by its Partner V.A. Kodiswaran Versus The Commissioner of GST and Central Excise, The Additional Commissioner of GST and Central Excise (Appeals), Madurai

HC resolved a GST classification dispute for aluminum foil containers, ruling in favor of the petitioner. The SC previously established that such products ... Classification of goods - Aluminium Foil Container / Aluminium Foil in Roll Form and Plastic Articles - to be classified under Chapter heading 7067 or 7615? - HELD THAT:- The issue is considered by the Hon'ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS HINDALCO INDUSTRIES LTD. [2023 (6) TMI 844 - SC ORDER], where it was held that the said product is classifiable under 7615. And the issue raised by the petitioner is settled by the Hon'ble Supreme Court in favour of the petitioner and against revenue. Therefore, this Court is of the considered opinion that the product Aluminium Foil Container is classifiable under 7615 with GST 12%. Hence the impugned order is liable to be quashed and accordingly quashed. Petition allowed. Issues Involved: The classification of a product for GST taxation under different chapter headings - 7607 or 7615.Summary:Issue 1: Classification Dispute under GST RegimeThe petitioner, a partnership firm manufacturing Aluminium Foil Container and Plastic Articles, faced a dispute with the revenue regarding the classification of its products under GST. The petitioner classified the product under chapter heading 7615 with 12% tax, while the revenue claimed it should be under 7607 with 18% tax. The dispute arose due to differing interpretations of the nature and purpose of the goods supplied by the petitioner.Issue 2: Judicial Interpretation and PrecedentsThe petitioner argued that the classification of goods should be based on the nature and purpose for which they are supplied, following the Customs Tariff Act. The petitioner relied on a decision by the Ahmedabad Tribunal, supported by the World Customs Organisation and Supreme Court of South Africa, which classified similar products under 7615. However, the respondents rejected these precedents, leading to the issuance of an order-in-original against the petitioner.Issue 3: Supreme Court JudgmentThe Supreme Court, in a separate case involving a similar classification dispute, held that products similar to the petitioner's are classifiable under 7615. This decision supported the petitioner's argument and settled the issue in their favor, establishing that the Aluminium Foil Container should be classified under 7615 with a GST rate of 12%.Conclusion:Based on the Supreme Court's judgment, the High Court quashed the impugned order passed by the revenue and directed the classification of the Aluminium Foil Container under 7615 with a 12% GST rate. The Court refrained from deciding on the refund issue but left it open for future adjudication as per the provisions of the law. The writ petitions were allowed with no costs, and connected miscellaneous petitions were closed accordingly.