TaxTMI 
TaxTMI 
2018 (7) TMI 1493
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct 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 capability. 2.3 Marketing and business development activity with ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oduced 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 classification applicable to our above mentioned products 5. We humbly request you to give a ruling in respect of the appropriat....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 caution as it is attracted only when no other provision expressly or by necessary implication applies to the goods in question. " 1.6 Further, the Hon....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 (MVAT) Act, 2002 4.1 Most of the customers of the Company to whom these products are supplied include government and non-government entities operating in the essential sector of electricity genera....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2, 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 supplied to an essential sector, the incidence of tax was kept at a minimum i.e. 5%, to avoid any undue tax burden on the ultimate customers of essential sector of electricity. 1.5 At this juncture we would like to reproduce the rele....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r 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 submissions that our products viz. MIDEL eN 1204 and MIDEL eN 1215 being products consumed by entities operating in the essential sector of electricity generation, transmission and distribution, and being subjected to beneficial rate of tax under the erstwhi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....equested 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 submission and further submission were made in the case. The jurisdictional officer, Sh. Subhodh Lavate, State Tax Officer (RAI-SGST-C-018) Raigad division, CBD Belapur was present on all the hearings. He has tendered a written submission in the matter and stated that the product merits tax @ 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 OSHA hazard communication guidelines. 2.1 Classification of the substance or mixture Regulation (EC) No 1272/2008 (CLP) Not classified. 2.2 Label elements Regulation (EC) No 1272/2008 (CLP): No symbol or signal word 2.3 Other hazards None. This product is not classified as hazardous and this document has been compiled for information purposes, in accor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fe 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 protection: Wear coveralls Hand protection: Wash hands after use. For prolonged or repeated skin contact gloves are recommended Eye protection If splashes are likely to occur wear safety glasses. 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 protection: Wear coveralls. Hand protection: Wash hands after use. For pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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, and the composition of each of these are available before us. * The information shows that the products are a blend of natural triglyceride esters. They also contain additives. * The applicant has argued that the quantity of additives in their products is minimal i.e. 0.3% of the total weight of the product. Therefore, the said products cannot be considered as 'mixtures'. Having seen thus, we look at the contention with regard to the applicability of the schedule entries thus - * If it is assumed that either or our products cannot be clas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ents 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 impugned products would not be accepted. 5. We shall see herein the position as appearing in the Customs Tariff Heading 1518 - 1518 ANIMAL OR 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 ; INEDIBLE MIXTURES OR PREPARATIONS OF ANIMAI. OR VEGETABLE FATS OR OILS OR OF FRACTIONS OF DIFFERENT FATS OR OILS OF THIS CHAPTER, NOT ELSEWHERE SPECIFIED OR INCLUDED 1518 00 - Animal or vegetable fats and oils and their fractions, boiled, oxidized, dehydrated, sulphurised....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted 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 galore for mineral oils, there are as yet no IEC standards addressing the composition or testing of the natural ester oils with their different chemical composition. Each manufacturer has his own set of ingredients to obtain a transformer fluid. That is precisely the reason that the applicant has not preferred to divulge the details. Thus, by addition of the needful additives and the ingredients, we have transformer fluids made from different vegetable oils, each with their distinct chemical composition. The requirement of retaining the original fundamental structure would not be possible by the use of the additives and ingredients. The vegetable oils are used as the base to manufacture the final products which are a distinct product. Th....