TaxTMI 
TaxTMI 
2018 (7) TMI 1493
X X X X Extracts X X X X
X X X X Extracts X X X X
....lear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the "GST Act". 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- "Statement of relevant facts having a bearing on the question(s) raised 1. M&l Materials India Pvt. Ltd (hereinafter referred to as M&l India' or the 'company' or 'we' or 'us' ) is a wholly owned subsidiary of M&l Materials Ltd. based in UK (hereinafter referred to as 'M&I UK'). 2. The company commenced its operations in the month of April 2014 and is, inter alia. engaged in the following activities: 2.1 Import of 'Midel Dielectric Fluids' from M&l UK and subsequent sale in India 2.2 Establishing local warehousing and distribution capabilit....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appears under "Schedule I - 2.5%" as well as "Schedule 2 - 6%". The relevant extract is reproduced hereunder for ease of reference: 4.2 S. No. Chapter / Heading / Sub-heading / Tariff item Description of goods Schedule I - 2.5% 90. 1518 Vegetable fats and oils and their fractions, boiled, oxidised, dehydrated, sulphurised, blown, polymerised by heat in vacuum or in inert gas or otherwise chemically modified, excluding those of heading 1516 [emphasis supplied] Schedule II - 6% 27. 1518 Animal fats and animal oils and their fractions, boded, oxidised, dehydrated, sulphurised, blown, polymerised by heal in vacuum or in inert gas or otherwise chemically modified, excluding those of heading 1516; inedible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of tins chapter, not elsewhere specified of included [emphasis supplied] 4.3 It can be seen that under GST, items constituting of vegetable fats and oils, which are classifiable under entry 1518 00.39 of the Customs Tariff can be classified under two different entries, which has resulted in an uncertainty in respect of the correct classifi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....p for retail sale, those headings are to be regarded as equally specific in relation to those goods, even If one of them gives a more complete or precise description of the goods (emphasis supplied) 1.4 The entry at S. No 27 of Schedule II - 6% is a general entry mainly referring to animal fats and oils while vegetable fats and oils are mentioned only cursorily. Further, it should be noted under the said entry only those vegetable fats or oils can be covered which are not specified elsewhere. 1.5 It is a well established principle of taxation jurisprudence for resolving classification disputes that a specific entry shall prevail over a general entry. In this regard, we would like to bring to your attention the judgement of the Hon'ble Supreme Court of India in the case of Western India Plywoods Ltd. versus Collector of Customs, Cochin [2005 (188) E.L.T 365 (S.C.)] (attached as Annexure I), wherein the question pertained to classification of "motor vibrator with actuator" under the Customs Tariff. In this case, the Hon'ble Supreme Court held that, " ... it is well settled that the application of the residuary tariff entry must always be made with a good deal of c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....th our products should fall under Schedule I - 2.5%. 3. Classification under Heading 1516 3.1 Without prejudice to the above, if it is assumed that either or both of our products cannot be classified under entry at S. No. 90 of Schedule I - 2.5%, we would like to submit that, entry at S. No. 88 of Schedule I - 2.5% also provides an appropriate description of our products, and that in no case the said products can be classified under the general entry at S. No. 27 of Schedule II - 6%. 3.2 In this regard, we would like to reproduce the entry at S. No 88 of Schedule 1 - 2 5% for ease of reference: S. No. Chapter / Heading / Subheading / Tariff item Description of goods Schedule I - 2.5% 88. 1516 Vegetable fats and oils and their fractions, partly or wholly hydrogenated, inter-esterified, re-esterified or elaidnised, whether or not refined, but not further prepared. " 3.3 Both our products being vegetable oil based esterified transformer fluids, we submit that they should fall within the ambit of the said entry and classified accordingly. 4. Beneficial rate under the Maharashtra Value Added Tax (M....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hile excise law, the tariff rate of excise duty applicable to items covered under entry 15180039 of the Central Excise Tariff was 6%. However, the Government vide Notification No. 12/2012-Central Excise dated 17 March 2012, as amended from time to time, had fully exempted the items falling under chapter heading 1518 of the First Schedule of the Customs Tariff Act, 1975. 1.2 Further, as submitted earlier, vide Notification No. VAT-1507/CR/-93/Taxation - I dated 21 January 2008 under the Maharashtra Value Added Tax Act, 2002 our products were subjected to beneficial VAT rate of 5%. This was in view of the fact that most of the customers of our products include government and non-government entities operating in the essential sector of electricity generation, transmission and distribution. 1.3 Similarly, the Tamil Nadu government vide Notification-III. G O Ms. No. 77, No II(1)/CTR/12(R-I7)/2011 dated 11 July 2011 had reduced the tax payable by any dealer to 5% on the sale of any goods except petrol, diesel and cement to certain entities engaged in generation, transmission and distribution of electrical energy. 1.4 Given the above, it is evident that our products being supplie....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... products should be classified under the GST rate bracket which is closest to the combined rate of tax applicable under Central Excise and VAT - i.e. 5% 1.7 Therefore, we submit that the intention of the GST Council provides a compelling view that our products should be classifiable under Entry at S No. 90 of Schedule - I - 2.5% of the Notification No. 1/2017-Central Tax (Rate) dated 28 June 2017, as amended from time to time. 1.8 Further, the Hon'ble Finance Minister Arun Jaitley in his speech to the Joint Session of the Parliament on the midnight of 30 June 2017 reiterated that GST has been framed with the objective of maintaining principle of equivalence, revenue neutrality and ensuring that no unnecessary burden is imposed on the weaker sections of the society. 1.9 It is evident that in the course of fixing GST rates of various commodities under GST, the GST Council in its wisdom was of the view that introduction of GST should not exert any additional burden on the people by increasing the rate of tax on goods which were subjected to beneficial rates of tax under the erstwhile law. 1.10 We submit that the above discussion supplies further credence to our earlier....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich means it is inedible and hence covered by Schedule II. Chapter heading 1518 and rate of tax applicable is 6%. 2) The above submission is made in the light of Notification No. 1/2017-State Tax(Rate) No. MGST-1017/C.R. 104/Taxation 1 dated 29/06/2017. Hon. Forum is humbly requested to admit the application for Advance Ruling and decide the issue as per above mentioned notification. " 04. HEARING The case was taken up for hearing on dt.07.03.2018 when Sh. Jigar Doshi, Sh. Shivendra Dwivedi, Sh. Harshal Fifadra, Sh. Prathamesh Shende along with Sh. Nitin Satija, Director and Country head attended and made oral submissions for admission of their application as per submission made in the Advance Ruling application. They were requested to provide copies of Bill of Entries of import of their products for last one year and it was also requested to provide exact contents of their product, duly authenticated and certified, so that its exact nature could be known. The final hearing was held on dt.20.03.2018 when Sh. Shivendra Dwivedi, Sh. Harshal Fifadra and Sh. Prathamesh Shende appeared on behalf of the applicant and reiterated the contention as made in the written submissio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....;, the relevant parameters from which can be seen below : Particulars MIDEL eN 1204 (rapeseed oil based dielectric transformer fluid) MIDEL eN 1215 (soya based dielectric transformer fluid). 1. Identification of the Substance/Mixture and of the Company/Undertaking 1.1 Product Identifier Material Name: MIDEI. eN 1204. 1.2 Relevant identified uses of the substance or mixture and uses advised against Product Use: Dielectric fluid Uses advised against: None. 1.3 Details of the supplier of the substance or mixture Company: M&I Materials Ltd. Hibernia Way, Trafford Park, Manchester, M32 0ZD, UK. 1.1 Product Identifier Material Name: MIDEL eN 1215. 1.2 Relevant identified uses of the substance or mixture and uses advised against Product Use: Dielectric fluid Uses advised against: None 1.3 Details of the supplier of the substance or mixture Company: M&I Materials Ltd., Hibernia Way, Trafford Park, Manchester. M32 0ZD, UK 2. Hazards Identification This product is not classified as hazardous and this document has been compiled for information purposes, in accordance regulation 1907/EC/2006, Annex II, as amended by Regulation (EU) No. 453/2010 and OSH....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Irrigate with copious amounts of water. Obtain medical attention if irritation develops. Ingestion: Do not induce vomiting, obtain medical attention. 4 2 Most important symptoms and effects, both acute and delayed No adverse effects expected 4.3 Indication of any immediate medical attention and special treatment needed No special treatment required. 7. Handling and Storage 7.1 Precautions for safe handling Avoid eye and prolonged skin contact 7.2 Conditions for safe storage, including any incompatibilities No special precautions required 7.3 Specific end use(s) Exposure to air should be minimised. Opened containers should be properly resealed 7.1 Precautions for safe handling Avoid eye and prolonged skin contact 7.2 Conditions for safe storage, including any incompatibilities No special precautions required 7.3 Specific end use(s) Exposure to air should be minimised. Opened containers should be properly resealed 8. Exposure Controls/ Personal Protection 8 1 Control parameters No relevant control parameters. 8 2 Exposure controls Eye washes should be available for emergency use Respiratory protection: None required. Skin protecti....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... thus : Composition/lnformation on Ingredients Constituent CAS Number Contents MIDEL eN 1204 (rapeseed oil based dielectric transformer fluid) Blend of natural triglyceride esters 68956-68-3 >98.5% Performance enhancing additives Proprietary <15% MIDEL eN 1204 (soya based dielectric transformer fluid) Blend of natural triglyceride esters 68956-68-3 >98 5% Performance enhancing additives Proprietary <1.5% We are afraid to observe herein that the available information would be insufficient for us to decide the issue at hand. Nevertheless we would have a look at the contention as to the applicable classification. From all above, we have only the following information for deliberation as to the classification of the products - • The only thing we can clearly see is that the impugned products have a distinct identity as being a "transformer fluid". They are also given distinct names to establish their identity. • We only learn that the impugned products are vegetable oil based. • Neither the exact ingredients nor the exact additives,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3. The applicant has argued that the products cannot be considered as 'mixtures'. However, we find a reference to the products being a 'substance' or 'mixture' in the Safety Data Sheet of these products as can be seen thus - 1.3 Details of the supplier of the substance or mixture 4. No information about the manufacturing process has been given. Neither any information has been shared as to the ingredients contained in the products. The products also contain additives, the information about which has also not been shared with this Authority. But we see that the manufacturing process of these ingredients and the addition of additives leads to a distinct product being formed. The ingredients or additives are added so as to formulate a certain product which could be used as a transformer fluid. So the processes are intended to manufacture a new commodity in which rapeseed oil or soya would be the prime ingredient. Owing to this, the products are described as "rapeseed oil based" or "soya based" and not being "rapeseed oil" per se or "soya" per se. The end product has a distinct identity in the sense that when one desires to have vegetable oil, the im....
X X X X Extracts X X X X
X X X X Extracts X X X X
....part 1 (as reproduced above) of Heading 1518 says- "This part covers animal or vegetable fats and oils and their fractions which have been subjected to processes which modify their chemical structure thereby improving their viscosity, drying power (i.e., the property of absorbing oxygen when exposed to the air and forming elastic films) or modifying their other properties, provided they retain their original fundamental structure and are not more specifically covered elsewhere, e.g.: Thus, the Notes make it clear that the animal or vegetable fats and oils and their fractions should retain their original fundamental structure. e. The part 1 (as reproduced above) of Heading 1518 speaks of certain processes which have been subjected to vegetable and animal oils. But the HSN Notes say that despite undergoing these processes, the vegetable or animal oils should retain their original fundamental structure. In the present case, we have a final product which is a transformer fluid. Though the Test Report shows the percentage of the natural triglyceride esters to be at 98.5%, it would not mean that a new commodity has not been produced. There are data and international standards ga....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... products and hence, the entry 27 of Schedule II of the Notification No. 1/2017- Central / State Tax (Rate) which covers the aforesaid description would be applicable. In the present case, we are unaware of the exact composition in terms of the additives and the ingredients used in the "rapeseed oil based" or "soya based" preparations. This would, as per our considered opinion, affect our decision. We find that there is Chapter 38 of the Customs Tariff which covers residual products of the chemical or allied industries. However as the exact composition of the product is not revealed to us by the applicant and therefore on the basis of the facts at hand, we find them insufficient to arrive at any decision as to the classification of the product under Chapter 38 and accordingly, taking into consideration only the details revealed to us, we find that the product is classifiable under Chapter 15 of the Customs Tariff Heading/GST Tariff. 6. We are not in doubts that entry 88 and 90 of Schedule I of the Notification No. 1/2017-Central / State Tax (Rate) would not cover the impugned products. We are also convinced that the impugned products are not covered by any entry of the Schedule ....