TaxTMI 
TaxTMI 
2018 (12) TMI 1274
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....g the tax liability or reducing the amount of admissible input tax credit shall be made, unless the applicant or the appellant has been given an opportunity of being heard. 2. Under Section 103 (1) of the Act, this advance ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only (a) On the applicant who had sought it in respect of any matter referred to in sub-Section (2) of Section 97 for advance ruling; (b) On the concerned officer or the jurisdictional officer in respect of the applicant. 3. Under Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the original advance ruling have changed. 4. Under Section 104 (l) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-Section (1) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made. * *....
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....esses, we also opt for only one process called CUT on these stones. Some other kind of simple processes like CALIBRATION, TUMBLING etc. are also undertaken. But a stone SLAB generally do not need more than two processes before ready for selling into the market. After any kind of the process completed on a stone SLAB, the morphology doesn't change. The stone slab still remains a stone slab only, and no changes occur either in shape or in characteristic or in distinction. In essence both raw material and finished goods contain uniform Physical properties & chemical composition. After processing also our commodity still called STONE in general trade parlance. In other words, a "mineral" after processing remains a "mineral product" or "mineral substance" only and nothing more than that". 14.^2 Questions on which advance ruling is required: A) In which Chapter the commodity called "Polished/Processed limestone slabs" falls ? B) Under which HSN Code the above commodity comes ? C) Can we put them under "Mineral substances not elsewhere specified or included" which is mentioned under HSN Code 2530 ? Or D) Can we retain them under any of the HSN Codes ....
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....s SLAB. SAWN is a process performed on Block to derive uniform thickness TILES which are called a CREAM like material and our SSI unit don't do that process and sawn on blocks is mostly practiced in KOTA region of Rajasthan and also in Marble/Granite Industry worldwide. Whereas surface POLISH is a process which is performed on directly brought rough stone SLABs (minor mineral) of uneven thickness and it is called BUTTERMILK like material which we usually undertake in our small scale industries. The expenses incurred on a sawn TILE is higher than combined processes of POLISH & CUT done on a SLAB of same size. In economic terms also any of the two processes combined together cannot match a single process of SAWN which is allowed in written form under HSN Code 2516. Selling price wise and quality wise also there is a huge difference in these both varieties of stones and our cheap polish slabs are mostly used in low budget housing needs. These cheap quality Polish stones are also a last resort for a customer to select from. It is noteworthy to mention here that, Processed or Mirror Polished Marble/Granite SLABs have also not been taken out of Chapter 25 which is evident from the ....
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....HSN Codes of Chapter 25. If an opportunity be given, we will come personally and demonstrate to prove the substance in our discussions before the competent authority by bringing small pieces of sample stones so that it will become easier for the authority to decide the HSN Code of our commodity on merits. Further clarifications if any will be submitted at the time of arguments. 3.2. The appellant filed additional submissions before the TSAAR vide a letter dated 05-01-201 8, as follows: "Our further humble submissions are mentioned herein below substantiating that Processed/Polished Limestone slabs cannot be taken out of Chapter 25: 1. A downloaded list (four in no.s) of Rough as well as Processed Kota, Marble and Granite stones exported to different countries from India under Chapter & HSN Code: 25 is enclosed here with as ANNEXURE-A1 as further proof substantiating that polish stone slabs have not been taken out of Chapter 25. 2. A bunch of newspaper clippings clearly stating that how GST/FITMENT Committee, of late, realized its mistake and expressing its concern having wrongly taken into consideration of EXCISE DUTY aspect, though more than 95% of indus....
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....h stone slabs cannot be taken out of Chapter 25. (See ANNEXURE-A3) 7. Note 1 of Chapter 25 also allows other mechanical or physical processes on minerals without changing the structure of the product. It is very clear that "Polish" done on a stone slab is a process comes under mechanical or physical process by using simple machine and the shape and structure of stone slab still remaining stone slab only and not changed. (See ANNEXURE-A3). 8. Note 2(e) of Chapter 25 is also mentioning that "Chapter 25 does not cover mosaic cubes or the like of heading 6802", it does clearly mean that other products coming under 6802 can have a place in Chapter 25. (See ANNEXURE-A3). 9. Tandur rough stones are stones of less value in the market and the marketable quality of these stones is enhanced by polishing and cutting. But the substance of the material is not altered. The stone slab is made more presentable and attractive for the benefit of the end users of low cost housing needs and it cannot be said that the activity is a manufacturing activity. " 10. In the Hyderabad meeting of GST Council held on 9/09/2017, we saw that much complex processes like "Stone in....
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....USHING, POWDERING etc. on hardcore minerals which are expenditure wise also much costlier than POLISH done on surface of a rough slab by using a simple polish machine" III. Advance Ruling Order: 4. After examining the issues, the Authority (TSAAR) passed the impugned order, wherein (after briefly summarising facts, application-contents etc.), the submissions made by the applicant during personal hearing and the Authority's discussion/findings are recorded as follows: "...... 3. A personal hearing was held in this case and Mr. Rajgopal Sarda, Proprietor of M/S. Maheshwari Stone Supplying Co., Tandur have appeared for personal hearing on 27-01-2018 and explained the case, as under: a) That there are two kinds of stones available in limestone category. One is BLOCK and the other is SLAB. SAWN is a process performed on Block to derive uniform thickness TILES which are called a CREAM like material and their SSI unit do not do that process and sawn on blocks is mostly practiced in KOTA region of Rajasthan and also in Marble/Granite Industry worldwide._ b) That surface POLISH is a process which is performed on directly brought rough stone SLABs (minor mineral....
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....Mining authorities of State Government. The process of expensive and luxurious category Marble/Granite is very complex in comparison to their Polish slabs; to such an extent that processing expenses incurred only on SAWN process of Granite/Marble is 2-4 times higher than the entire material cost of Processed Limestone slab itself of same surface area. e) Hence, finally it was submitted that at any angle it is appropriate that their commodity called "Polished/Processed limestone slabs" should not be taken out from chapter 25. Therefore, in light of their submissions they request the advance ruling authority to declare that POLISHED or PROCESSED LIMESTONE SLABS comes under any of the HSN Codes of Chapter 25." 4. The applicant is seeking advance ruling in respect of classification of "processed/polished limestone slabs" and with a submission that the said goods are correctly classifiable under chapter 25 of the GST Tariff. 5. Before deciding the classification of goods for which advance ruling was sought it is fair on our part to go through the Rules for Interpretation of Customs tariff which was made applicable to GST Tariff and General rules for Interpretation of the ....
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....uneven surfaces. This working involves removing superfluous protuberances by means of hammer or chisel type tools. > This subheading does not cover blocks or slabs which have been cut to a rectangular (including square) shape. 9. Similarly, the subheading explanatory notes for subheading 2515.12 are given below: > To fall in this subheading, the blocks and slabs which have been merely cut by sawing must bear discernible traces of the sawing (by wire strand or other saws) on their surfaces. 10. The heading 25.16 covers Granite, Porphyry, Basalt, sandstone and other monumental or Building stones, whether or not roughly trimmed or merely cut, by sawing or otherwise into blocks or slabs > The stones of this heading may be shaped or processed in the same ways as the stones of heading 25.15 (including building limestone or Portland stone) and that stones in shapes identifiable as road or paving setts, flagstones or curb stones are classified in heading 68.01 even if merely shaped or processed as specified in the text of this heading. 11. The heading 25.21 covers limestone flux and limestone and other calcareous rocks commonly used for the manufacture o....
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....e normal quarry products of chapter 25 are correctly classifiable under heading 68.02 of the Customs tariff as per the Harmonized Commodity Description and Coding System. As the Rules for Interpretation of Customs tariff was made applicable to GST Tariff and General rules for Interpretation of the schedule, the "Polished/Processed limestone slabs" are correctly classifiable under heading 6802 of the GST Tariff. 15. The issue has been examined with reference to the provisions of the CGST/TGST Act, 2017 and the Rules made there under and the notifications issued till date; and the Advance Ruling is given as under: - "Polished/Processed limestone slabs" are correctly classifiable under heading 6802 of the GST Tariff. The application filed by M/S Maheshwari Stone Supplying Co., Tandur, Vikarabad, is disposed accordingly". IV: Appeal filed by the Appellant, Personal Hearing & Further submissions : 5.1. Against the above Advance ruling Order, the appellant filed the present appeal on the following grounds: "..We have received the copy of order no. 2/2018 of AAR on 17/04/2018 by regd. post which is enclosed here with as ANNEXURE-AAI. We are a tiny & SSI un....
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....t. One such being as all RDs involved in processed stone slabs at source point in Telangana are falling under below 1.5 Cr. Turnover category, as such at the most they can write only two digit HSN code as per HSN Rules. And it had mentioned in GST goods rate list under HSN 25 that it covers "Goods not mentioned elsewhere" and this question had not been answered by AAR. We ask once again this AAAR that can't we opt for HSN 25 for Processed limestone slabs under category of "goods not mentioned elsewhere"? Our further submissions before this AAAR are here under: 1. We strongly raise our objections for the fact that why "Marble/Granite other than BLOCKS" mentioned under the GST column of Chapter 25 also shall not be called as "Worked monumental or building stone"? because other than Blocks means TILES/SLABS (in even thickness always) and they cannot be derived without bringing a BLOCK to a factory for splitting by subjecting to SAWN or CUT processes which are highly expensive than mere POLISH+SIZING combined together done on our Rough limestone slabs. If the AAR/GST is so particular about WORKED definition to be only interpreted for heading 6802, then why "Marble/Granite o....
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....hile classifying the product and not its technological manipulation. Where the product is classified on the very first level, then there is no need to drill down further in the strata below. Whether RAW or FINISHED our stones are called STONES, BUILDING STONES, FLOORING STONES in the market but not WORKED BUILDING STONE. 6. The AAR didn't consider that the "GOODS under CETH 6802 are shaped articles and further worked by a Stone-mason or sculptor. Limestone slabs in question are not such goods which are otherwise simply polished & cut and this activity would not change the morphology, character, name, description, purpose and usage of stone slabs to that of articles mentioned within the scope of heading 6802. Such processes would thus not take out their classification out of Chapter 25. As per Chapter Note 1 to Chapter 68. products of Chapter 25 are excluded from the scope of Chapter 68. Thus, the products which are otherwise classifiable under Chapter 25 are excluded from Chapter 68. 7. The processes such as CRUSHING, POWDERING of minerals have still been retained in Chapter 25 only, in-spite of the fact that such processes not only require huge power con....
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....plitting it with a highly expensive processing machine, this is not possible. More over a BLOCK is being converted into TILES/SLABs of even thickness. It does clearly mean that NATURE, DESCRIPTION, PURPOSE & USAGE have completely been changed and even after that it had been retained in Chapter 25 only!!! A block is no longer remained a Block but split into tiles/slabs thus changing its shape and usage. 12. Even there are many Excise judgments for Polished Marble/Granite not taking them out of Chapter 25. One such being in case of Classic Marble Company Pvt. Ltd. Vs Commissioner of Central Excise & ST., Vapi in 2013(11) TMI 384 - CESTAT Ahmedabad delivered in Nov 2013, where it was held that Polished Marble/Granite cannot be taken out of Chapter 25. 13. The ruling of AAR will put our low cost processed stones under much higher bracket rate of GST without considering the selling price and other phenomena. Hence almost all kinds of stones whether low cost or luxurious after processing will now have to suffer GST @ 18% (under HSN Code 68) including much lower category and cheaper stones like of our processed LIMESTONE SLABS. By doing so the AAR had put all ve....
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....eviously fetching almost 27% of revenue to Govt, and they have been first put under 28% bracket in GST then reduced to 18%!!! We ask on what basis?? We afraid will it not be treated as a solid kind of favour extended to Corporate manufacturers who are financially so sound? The funny thing is MRP for each water bottle under both regimes remained same as Rs. 20/- on lower side and Given the fact of daily sales of water bottles in India, the Govt, is at a net loss of around INR 2000 Crores per annum. And this amount is very smartly entering into the pockets of financially well settled corporate houses, where as no benefits had been passed on to consumers. On the other hand if GST Council fix the rate of Tax on all kinds of low cost processed limestone slabs (produced from RAW slabs only and not to be confused produced from BLOCKS) in India to 5%, then also it may not amount to a decrease of INR 500 Crores per annum, though in actual terms it is not at all a decrease because under VAT regime our finished product was also charged only 5%. 17. From the above statement of point 16, at one end GST Council by reducing a TAX base unnecessarily has bringing loss to itself, where as s....
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....n thrown into chapter 68? Even "Marble/Granite other than blocks" mentioned under 18% column of Chapter 25 does clearly mean that they have been further processed beyond quarry i.e. in a factory by subjecting them to SAWN or CUT processes. The GST of 18% is the highest tax rate for Marble/Granite and the like, then in the event it can also be construed that even POLISHED & SIZING for Marble/Granite slabs/tiles are also included in the same Chapter of 25. 21. The AARs findings & interpretation rules if at all applicable then they are to a situation where in an assessee brings entire stone block into his factory, cuts into slabs or tiles and does all other activities thereafter such as POLISHING & SIZING etc. But in our case no such activity is undertaken. Our job is very simple; to bring rough stone slabs and brush polish it's one of the suitable surface, without changing the shape, structure of the stone slab. Therefore the AAR had failed to notify that the reliance placed by them in defining heading 6802 apply only when processes specified therein are undertaken for conversion of blocks into slabs or tiles only. 22. On harmonious reading of Note 1 and Note 6 of C....
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....er 68 on legally backed grounds unknown to us and better known to them, then at least AAAR could recommend to GST Council/Fitment Committee or Appropriate Authority to fix the GST Rate as 5% for our commodity based on our genuine and justified facts and submissions submitted herein above and enclosed here with in enclosed ANNEXURES. This can also be done in heading 6802 by creating 5% GST column for such kind of lower cost stones where morphology in RAW & FINISH doesn't change at all". 5.2. The appellant made further submissions vide a letter captioned 'Sent by Regd. Post on 12/05/2018', as follows: "2. Kindly refer Judgment of Customs, Excise & Gold Tribunal-Delhi, in the matter of: Madhusudan Ceramics vs Collector of Central Excise on 13 November, 1990. (Can be searched in Google bar). (Equivalent citations: 1992 (37) ECC 86, 1991 ECR 206 Tri Delhi, 1991 (53) ELT 90 Tri Del). = 1990 (11) TMI 244 - CEGAT, NEW DELHI With reference to the above, our further submissions are as under: 1. While referring to paragraph no. 14 of ORDER No. 02/2018 of AAR in ANNEXURE-AAI, the AAR while classifying our GOODS had relied upon HCDCS alone but in the above appeal under citation n....
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....The Appellant was given personal hearing before this Appellate authority on 07-06-2018. Sri Rajgopal Sarda, Proprietor appeared for the hearing and reiterated and explained the various submissions in his appeal. As to the arguments made by the AAR w.r.t. the Explanatory Notes, he mentioned that the AAR was legally not justified in relying upon the Explanatory Notes. He had nothing further to add. 5.4. Vide a letter dated 12/06/2018, the appellant put forth the following further submissions: "With respect to my Appeal under GST for Tandur stone slabs, if your good self consider following few lines, then it would become so clear that why polished stone slabs of Tandur fall under Chapter 25 of Customs tariff only. 1. Kindly differentiate between a BLOCK & a SLAB as raw material undergoing the various processes. Slabs/Tiles derived from a Block come under manufacturing (shape is changed) activity, where as a rough stone slab undergone Polish or cutting processes cannot be equated to manufacturing because after undergoing those processes still it remains a stone slab only (no shape change). 2. The AAR in their judgment relied on non-statutory aspects such as HCDCS, giving de....
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....inst. 7. We now proceed to record our discussions and findings. 8.1. At the outset, it is observed that in the Grounds of Appeal (as also initial application for Advance Ruling), reproduced above, some of the submissions put forth by appellant are to the effect of disputing the GST levy-rate of 28% on limestone slabs (as goods falling under HSN Code 6802) or questioning the basis of and rationale behind fixing such quantum of levy; arguing as to purported discrimination / inequity by citing lesser rate of GST-levy fixed in respect of other products / commodities - Water bottles, marbles, granites etc., and industries/sectors having highly mechanised processes etc., compared to small-scale units and so forth. Certain other submissions are also made by referring to newspaper reports/clippings, GST-captions/slogans, effects of the higher rate on small scale units, employment-aspects, etc. 8.2. We find that such submissions/contentions cannot merit consideration in the present proceedings before this forum since (i) the basis / rationale and reasoning in fixing quantum of levy @ 28% (or 18% as subsequently reduced), is a policy-decision of the Government(s) / statutory GST Cou....
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....ther questions framed in the application (reproduced above and hence not reiterated here), are corollary to the said main question; their determination would depend upon that of the main question^7. 10.1. To determine the aforesaid main question/issue, it would be appropriate to refer to the statutory provisions, relevant entries in the Central Tax (Rate) Notifications^8 as also the Headings, Chapter Notes etc., applicable in the given context. 10.2. Levy of GST came into effect from 1-7-2017. The charging Sections, Section 9 (1), in both the Central Goods and Services Tax Act, 201 7 ("CGST Act"/ "the Act", in short) and the Telangana Goods & Services Tax Act, 201 7 ("TGST Act" / "the State Act") - collectively referred to as "the Acts" - read as follows: "9. Levy and collection. (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent. , as may be notified by the Government on the recommendations of th....
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....sp; (ii) Statues, statuettes, pedestals; high or low reliefs, crosses, figures of animals, bowls, vases, cups, cachou boxes, writing sets, ashtrays, paper weights, artificial fruit and foliage, etc.; other ornamental goods essentially of stone"; ^146702 Artificial flowers, foliage and fruit and parts thereof; articles made of artificial flowers, foliage or fruit"; ^15177E 6802 Worked monumental or building stone (except slate) and articles thereof, other than goods of heading 6801; mosaic cubes and the like, of natural stone (including slate), whether or not on a backing; artificially coloured granules, chippings and power, of natural stone (including slate) [other than statues, statuettes, pedestals; high or low reliefs, crosses, figures of animals, bowls, vases, cups, cachou boxes, writing sets, ashtrays, paper weights, artificial fruit and foliage, etc.; other ornamental goods essentially of stone] ^16{except the items covered in Sl.No. 123 in Schedule I} SCHEDULE IV - 14% (all these entries later omitted, as indicated below in footnotes) S.No. Chapter/Heading/Sub-heading/Tariff item Description of Goods (1) (2) (3) ....
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....rate notification specifically provides for applicability of the Customs Tariff and related Rules for Interpretation/Explanatory Notes. Thus, appellant's contentions in this regard are found to be not valid, as the statutory Notification makes it abundantly clear that for classification of goods in GST, the Customs Tariff is to be followed. 11.2. Further, other grounds / submissions put forth by the appellant are to the effect that the processes undertaken by them do not amount to 'manufacture' or that there is no change/transformation in the nature / substance / character / description, usage etc., of the products. Reference in this regard was also made to Note 6 to Chapter 25 of the Central Excise Tariff mentioning 'polishing' as deeming to be manufacture. As seen, these grounds/submissions are based upon the entries and Chapter / Heading notes in the Central Excise Tariff Act, 1985. These can have no relevance vis-d-vis the levy of GST since:- (i) the Central Excise Tariff Act, 1985 or the Notes therein have not been made applicable for GST-classification/rates. On the contrary, it is specifically the Customs Tariff and Headings, Notes therein which have been made applicab....
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....d that reference to HSN Notes for deciding the classification issue involved, as done by the lower Authority, is in principle legally correct and tenable. 12.2. The appellant relied on the case law of Madhusudan Ceramics cited supra, to urge that in the said case the party had contended that HCDCS cannot be relied upon for classification of goods; that the Hon'ble Tribunal decided the issue in favour of the party by allowing their appeal and thereby, it should be considered that Hon'ble Tribunal had upheld the contention as to non-applicability of HCDCS. On perusal of the said case-law, it is observed that though the party made such a plea, the same was neither part of ratio decidendi of the decision nor was the said plea either expressly or impliedly affirmed / upheld by the Hon'ble Tribunal which decided the appeal basing on interpretation of the relevant Chapter Notes alone. 12.3. In view of the above, we find no merit in appellant's contentions against consideration of HSN Explanatory Notes for deciding the subject issue. 13. However, we find force and validity in the appellant's contentions vide letter dated 12-6-2018 that the lower Authority has directly referred to ....
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.... MONUMENTAL OR BUILDING STONE OF AN APPARENT SPECIFIC GRAVITY OF 2.5 OR MORE, AND ALABASTER, WHETHER OR NOT ROUGHLY TRIMMED OR MERELY CUT, BY SAWING OR OTHERWISE, INTO BLOCKS OR SLABS OF A RECTANGULAR (INCLUDING SQUARE) SHAPE - MARBLE AND TRAVERTINE : 2515 11 00 -- CRUDE OR ROUGHLY TRIMMED kg. 2515 12 -- Merely cut, by sawing or otherwise , into blocks or slabs of a rectangular (including square ) shape : 2515 12 10 --- Blocks kg. 2515 12 20 --- Slabs kg. 2515 12 90 --- Other kg. 2515 20 - Ecaussine and other calcareous monumental or building stone; alabaster : 2515 20 10 --- Alabaster kg. 2515 20 90 --- Other kg. 2516 GRANITE, PORPHYRY, BASALT, SANDSTONE AND OTHER MONUMENTAL OR BUILDING STONE, WHETHER OR NOT ROUGHLY TRIMMED OR MERELY CUT, BY SAWING OR OTHERWISE, IN TO BLOCKS OR SLABS OF A RECTANGULAR (INCLUDING SQUARE) SHAPE - Granite : 2516 11 00 -- Crude or roughly trimmed kg. 2516 12 00 -- Merely cut, by sawing or otherwise, into blocks....
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....l stone (for example, quartzite, flint, dolomite and steatite) similarly worked; it does not, however, apply to slate. 6802 WORKED MONUMENTAL OR BUILDING STONE (EXCEPT SLATE) AND ARTICLES THEREOF, OTHER THAN GOODS OF HEADING 6801; MOSAIC CUBES AND THE LIKE, OF NATURAL STONE (INCLUDING SLATE), WHETHER OR NOT ON A BACKING; ARTIFICIALLY COLOURED GRANULES, CHIPPINGS AND POWDER, OF NATURAL STONE (INCLUDING SLATE) 6802 10 00 - Tiles, cubes and similar articles, whether or not on a backing; artificially coloured granules, chippings and powder, of natural stone (including slate) not rectangular (including square), the largest surface area of which is capable of being enclosed in a square the side of which is less than 7 cm; artificially coloured granules, chippings and powder kg. - Other monumental or building stone and articles thereof, simply cut or sawn, with a flat or even surface : 6802 21 -- Marble, travertine and alabaster : 6802 21 10 --- Marble blocks or tiles kg. 6802 21 20 --- Marble monumental stone kg. 6802 21 90 --- Other kg. 6802 23 -- ....
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....rt only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up 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. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin" [Rules 5, 6, General Notes and Additional Notes are not reproduced since not relavant] 15.1. On examining the nature of the subject goods and the processes stated to be und....
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.... the activity of 'polishing' is done; and (b) Classification of 'processed limestone slabs' i.e, where apart from cutting slabs into rectangular/square shapes, all the other specified activities viz., polishing, tumbling and calibration are undertaken (and not as merely one of these or a combination of one or more of these). 15.3. On examining the nature of activities i.e, processes mentioned above, we find as follows: (i) Polishing is the process of smoothening one suitable surface of a given slab, mechanically. Appellant's description thereof in the application (reproduced at para 3.1 above under Nature of activity) is (quote) "to bring rough limestone slabs (a minor mineral) which are by nature uneven in thickness ranging from 15 to 35 mm (or so), to our processing unit and POLISH it's one of the suitable surface with simple table polish machine" (unquote). Though not specifically describing the process of 'polishing' in their application (whether any chemicals etc., are used/applied to obtain polished slabs), appellant has however mentioned in their submissions vide letters dated 12-5-201 8 as well as 12-6-201 8 (referred at paras 4.2 and 4.3 supra) that polishing is d....
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.... tumbling, apart from polishing, is yet another/further process of smoothing and polishing, (the words 'on relatively small parts' apparently indicating that post machine-polishing this is done on visible small parts which did not attain the required finish). Calibration is a process by which apparently, slabs of uneven/variable thickness are made to be of approximately same thickness i.e., fairly regular/even, by sawing off/cutting off the protuberant/uneven portion of the under-side surface (i.e, other than the one polished). . 16. Appellant's plea is for classification of the goods under Chapter 25 and in particular reference, under Chapter Headings 2515 / 2516 and alternatively under Headings 2521 or 2530. The Authority held the goods to be correctly classifiable under Heading 6802 of the GST Tariff, for the reasoning given in the impugned order. 17. Before considering the relevant Headings, Notes in Chapters 25 and 68 (and related Explanatory Notes where required), we deem it fit to deal with one of the grounds put forth by the appellant, whereby classification of the goods under Chapter 25 was sought, based on the Titles of the Sections and Chapters in the Tariff-Schedu....
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....arent specific gravity of less than 2.5 are classified in heading 25.16". 25.16 : "The heading also includes other hard igneous rocks (e.g., syenite, gneiss, trachyte...) as well as calcareous monumental or building stone not falling in heading 25. 15 (including building limestone or Portland stone) and serpentine marble.........). d) Appellant has not made any submission/averment as to the factor of apparent specific gravity in respect of their products for a specific claim under Heading 2515 or 251 6; but has mentioned both the said Headings in their application/appeal. As seen, in any case, there is no substantive/material difference in the factors determining classification under either of these two headings, except the said aspect of specific gravity. As such, both the said headings are considered as equally applicable in the given context, depending on the actual specific gravity thereof. e) Appellant also claimed alternative classification under Headings 2521 or 2530 with regard to their goods 'polished / processed limestone slabs'. The former Heading, as seen, is applicable to only specified types/forms of limestone i.e, 'limestone flux, limestone and other c....
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....l or physical processes (except crystallisation) This phrase and construction thereof indicates that the words used therein denote both the state/form in which the goods should be, and the corresponding processes that are "allowed" for goods to (continue to) fall under Chapter 25. The Note further provides a specific exclusion for products which have been subjected to certain other specified processes i.e, products that have been roasted, calcined, obtained by mixing or subject to processing beyond that mentioned in the heading (except where such process is mentioned/included in the Heading-description itself for e.g., calcined in Headings 2507, 2508, 2511, 2512 etc.,). 18.3. Thus, we find that in order to fall under Chapter 25, the goods/products should be: (i) those obtained by / subjected to only the specific processes mentioned / indicated in the relevant Heading-description. This is the primary or paramount criteria within Chapter 25 as per Note 1 ; or (ii) subject to the above, the goods should be in crude state; or (iii) should be in the state/form or subjected to only the processes, as specified, i.e, washed, crushed, ground, powdered etc., but (iv) should no....
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.... hence is an 'allowed process'. 19.2. With regard to other processes of polishing (including tumbling), these do not find place in descriptions of either Heading 2515 or 2516. The said descriptions also do not expressly provide for exclusion/prohibition of any other process(es). Hence, it is to be seen whether the subject goods / processes of polishing and tumbling as also calibration (which is not covered in Heading description, as detailed supra) are covered by Note 1 to Chapter 25, as analysed earlier. 19.3. The first criterion in the said Note is that goods should be in crude state. The appellant has not claimed that the goods are in crude state; in fact, as per appellant's own description viz., Polished / processed limestone slabs, these have been admittedly subjected to certain processes as indicated. Hence, the subject goods do not merit consideration as being 'in crude state'. 19.4. The other criterion is that the goods should have been subjected to the specified processes (and/or thereby be in the state/form indicated) i.e, washed, crushed, ground, powdered, levigated, sifted, screened, concentrated by floatation, magnetic separation or other mechanical or physica....
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....this analogy also applying the doctrine of noscitur a sociis^30 it appears that 'levigated' merits consideration as denoting that the goods/product is in the state/form of 'smooth fine powder'. Or by considering that the term powdered' is separately mentioned in the Note as immediately preceding word (which would cover all forms of powdered state whether coarse or fine), the only alternative meaning of 'levigated' as per contemporary prevalence, would be to denote goods in the state/form of/or subjected to process(es) of making into 'smooth paste'. B. With regard to the word 'ground': (i) The word 'ground' used in the Chapter Note, in the given context; has been cited by appellant as covering their activity of 'polishing' by mechanical grinding. However, here again, the said word appears along with the other words 'crushed', powdered etc., which refer to the processes of reducing substances to lesser size / finer particles / powdered forms. (ii) Further, the said word 'ground' appears in Heading / sub-heading description of various products under Chapter 25, as follows: 2508 10 90 Other Clays - Bentonite -- Other (includes processed and ground) 2508 50 22 --....
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....Notes to Chapter 25 as per HSN, is reproduced as follows: "As provided in Note 1, this Chapter covers, except where the context otherwise requires, mineral products only in the crude state or washed (including washing with chemical substances to eliminate impurities provided that the structure of the product itself is not changed), crushed, ground, powdered, levigated, sifted, screened or concentrated by flotation, magnetic separation or other mechanical or physical processes (not including crystallisation). . . . . . ." (conjunction highlighted). (iii) The meaning denoted with the use of the conjunction 'or' as above, appears to be apt, as otherwise, if only the word -'concentrated' has to be reckoned as qualifying the subsequent words/phrases 'flotation, magnetic separation or other mechanical or physical processes' - the same would not reflect a contextually relevant or true meaning, since processes of flotation, magnetic separation cannot be said to be used only for 'concentration'; more so since the earlier words in the Note include sifted / screened etc. Therefore, the above said phrase in Chapter Note I of Tariff, read with the HSN Explanatory Notes, merits to be....
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.... washed (including washing with chemical substances to eliminate impurities provided that the structure of the product itself is not changed), crushed, ground, powdered, levigated, sifted, screened or concentrated by flotation, magnetic separation or other mechanical or physical processes (not including crystallisation). The products of this Chapter may also be heated to remove moisture or impurities or for other purposes, provided that the heat treatment does not modify their chemical or crystalline structures. However, other heat treatments (e.g., roasting, fusion or calcination) are not allowed, unless specifically permitted by the heading text. Thus, for example, heat treatment which could entail a change in chemical or crystalline structure is allowed for products of headings 25.13 and 25.17, because the texts of these headings explicitly refer to heat treatment. The products of this Chapter may contain an added anti-dusting agent,' provided that such addition does not render the product particularly suitable for specific use rather than for general use. Minerals which have been otherwise processed (e.g., purified by recrystallisation, obtained by mixing minerals falling in....
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....nyx marble, etc.), but there are pure white varieties. Travertines are varieties of calcareous stone containing layers of open cells. Ecaussine is extracted from various quarries in Belgium and particularly at Ecaussines. It is a bluish-grey stone with an irregular crystalline structure and contains many fossilised shells. On fracture Ecaussine shows a granular surface similar to granite and is therefore sometimes known as "Belgian granite" "Flanders granite" "or" petit granit The heading covers other similar hard calcareous monumental or building stones provided their apparent specific gravity is 2.5 or more (i.e., effective weight in kg/1,000 cm^3). Calcareous monumental or building stones of an apparent specific gravity of less than 2.5 are classified in heading 25.16. The heading also includes both gypseous alabaster, which is usually white and uniformly translucent, and calcareous alabaster, normally yellowish and veined. The heading is restricted to the stones specified, presented in the mass or roughly trimmed or merely cut, by sawing or otherwise, into blocks or slabs of a rectangular (including square) shape. In the form of granules, chippings or powder, the....
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....it gently and evenly with a pencil held as flat as possible. This often reveals saw marks even on carefully sawn or very granular surfaces. This subheading also covers blocks and slabs of a rectangular (including square) shape obtained otherwise than by sawing, e.g., by working with a hammer or chisel. 22.1. From the above extracts of the HSN, especially the highlighted portions, it is evident that the HSN Explanatory Notes also reflect the restriction as to only certain specified processes being allowed on the products for a classification under Chapter 25. The said Notes further specify and give illustrative details of other processes which, if undertaken, entails classification under other Chapters, as follows: (i) The General Notes in HSN under Chapter 25 specify that "Minerals which have been otherwise processed .. generally fall in later Chapters (for example, Chapter 28 or 68). Heading Notes for Heading 2515, specify that "The heading is restricted to the stones specified, presented in the mass or roughly trimmed or merely cut, by sawing or otherwise, into blocks or slabs of a rectangular (including square) shape....'. This is further elaborated by the explanation "....
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....e have referred to the said decision. As seen, in this decision (Final Order No.s A/11380-11384/2013 -WZB/AHD dated 24-10-2013) = 2013 (11) TMI 384 - CESTAT AHMEDABAD, the Hon'ble Tribunal held the classification of polished Marble slabs and polished Granite slabs under Chapter 25 by considering that in their earlier Final Order No. A/1740-1744/WZB /AHD/2012 dated 27-12-2012 = 2013 (9) TMI 648 - CESTAT AHMEDABAD, the issue was held in favour of the same assessee; and the said Final Order was accepted by the Department and hence that the ratio of the earlier order would apply. Thus, in this decision, Hon'ble Tribunal has not given specific findings. We have therefore referred to the earlier Final Order dated 27-12-2012 = 2013 (9) TMI 648 - CESTAT AHMEDABAD cited therein, which is available with citation Classic Marbles vs CCE„ Vapi 2013 (293) ELT. 563 (Tri-Ahmd.) = 2013 (9) TMI 648 - CESTAT AHMEDABAD. In this decision, Hon'ble Tribunal while deciding the classification issue involved, referred to various other judgments, including Oriental Trimex Ltd. 2010 (249) ELT. 259 (Tri-Dei). =2009 (8) TMI 454 - CESTAT, NEW DELHI, Nitco Tiles Ltd. 2004 (165) ELT.50 (Tri-Mum). = 2003 (10)....
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...., can be classified under Chapter 25 in general and under Headings 2515/2516, in particular. 26. Consequently, the bar/exclusion in Note 1 (a) to Chapter 68 (that Chapter 68 would not cover goods falling under Chapter 25) would not be applicable, since the subject goods do not qualify for classification under Chapter 25. 27.1. The next question arises as to the correctness of classification of the goods under Heading 6802, as held by the lower authority. Description against Heading 6802 in the First Schedule to Customs Tarff Act, 1975 reads as follows : "Worked monumental or building stone (except slate) and articles thereof, other than goods of heading 6801; mosaic cubes and the like, of natural stone (including slate), whether or not on a backing; artificially coloured granules, chippings and powder, of natural stone (including slate)". In the above entry, the relevant part meriting consideration for the issue on hand would be whether subject goods are covered by the expression "worked monumental or building stone and articles thereof"; the subsequent portion of the entry being not relevant. The phrase 'monumental or building stone', is the same as appearing in Headin....
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....and powder, of natural stone (including slate). 6802.10 - Tiles, cubes and similar articles, whether or not rectangular (including square), the largest surface area of which is capable of being enclosed in a square the side of which is less than 7 cm; artificially coloured granules, chippings and powder - Other monumental or building stone and articles thereof, simply cut or sawn, with a flat or even surface : 6802.21 -- Marble, travertine and alabaster 6802.23 -- Granite 6802.29 -- Other stone - Other: 6802.91 -- Marble, travertine and alabaster 6802.92 -- Other calcareous stone 6802.93 -- Granite 6802.99 -- Other stone Heading Notes: "This heading covers natural monumental or building stone (except slate) which has been worked beyond the stage of the normal quarry products of Chapter 25. There are, however, certain exceptions where goods are covered more specifically by other headings of the Nomenclature and examples of these are given at the end of this Explanatory Note and in the General Note to the Chapter. The heading therefore covers stone which has been fu....
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....mineral products figure in both Chapter 25 and Chapter 68. (ii) The distinction for classifying under either of the Chapters lies in the level of activities / processes undertaken on the goods. (iii) That is, to fall under Chapter 25, the goods should be either crude or subjected to only those processes/stages which are specified in the relevant Heading-description or Note 1 to Chapter 25. Any processes undertaken beyond those specified for Chapter 25 purpose, would take the goods out of purview of the said Chapter. (iv) Once the goods fall out of Chapter 25, they would fall under other Chapters, including Chapter 68 subject to the Heading-descriptions (v) The General Note to Chapter 68, in HSN, specifies that "This Chapter covers. ...various products of Chapter 25 worked to a degree beyond that permitted by Note 1 to that Chapter". Heading Note to Heading 6802 states that "This heading covers natural monumental or building stone (except slate) which has been worked beyond the stage of the normal quarry products of Chapter 25. There are, however, certain exceptions where goods are covered more specifically by other headings of the Nomenclature and examples of these are ....
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..... The appellant's grounds/contentions against classification of the subject goods under Chapter 68 / Heading 6802 are that Heading 6802 applies only to shaped articles and further worked by a stone-mason or sculptor, whereas the limestone slabs are simply polished & cut which does not change morphology, character, name, description, purpose and usage of the stone; hence, these processes would not take the classification out of Chapter 25. We are unable to accept this contention. As detailed above, the Heading 6802, apart from articles, also specifically covers stone in the description itself i.e. "worked monumental or building stone.. and articles thereof". The same, coupled with the HSN Explanatory Notes, as detailed and analysed above, show that such stone (limestone slabs, in the instant context) which have been 'worked' beyond the processes mentioned in Chapter 25 on the one hand and 'polished' as specified under Chapter 68 in particular reference to slabs (blocks etc.,) has to be classified under Heading 6802. There is no restrictive connotation that such working has to be done only by stone-mason or sculptor, as explained above. Further, the reason that there is no change in ....
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.... --- Granite: 6802 23 10 --- Granite blocks or tiles 6802 23 20 --- Other From the above, it is evident that Marble, Granite by specific description figure under the relevant Headings / subheadings of Chapter 68 also, apart from Chapter 25. Consequently, on the same analysis as has been detailed above, the classification of Marble, Granite / articles thereof including blocks under either of the said Chapters, Headings would depend upon criteria for classification, as per Chapter Notes, Rules for Interpretation etc, read with HSN notes. In essence, here again it depends on the nature / level of processing undertaken; whereby if these are in crude state or subjected to specific processes (detailed in HSN also), they would be classifiable under Chapter 25 and if worked beyond that, including polishing, they would be classifiable under Chapter 68 under any of the above subheadings, as applicable. In Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017; against the Heading 6802, the description appearing in Heading 6802 of Customs Tariff has been as such incorporated (with certain specified exceptions/exclusions), pursuant to the....
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....labs, tiles and further undergoing processes of polishing etc; and that these would not be applicable in their case, since the product received by them is itself in the form of slab; and that this distinction was not appreciated by the lower authority. However, from relevant Chapter Notes, Heading description, Rules for Interpretation and also the guidance derived from the HSN notes, as discussed in detail in the foregoing paragraphs, we find no room or scope for a different interpretation / treatment on the basis of only reason that the subject goods are received in the form of 'slabs'. Classification for GST-levy purposes, has to be determined in respect of the goods, as they are supplied. Accordingly, on the detailed analysis of both given facts and the relevant provisions, as discussed above, the subject goods viz., polished / processed limestone slabs merit to be classified under Heading 6802 of the Tariff Schedule. 31.1. In view of the foregoing, we find that the appellant has not made out a case against the decision in impugned Advance Ruling in so far as it has been ruled that "Polished / Processed Limestone slabs are. correctly classifiable under heading 6802 of the GST....
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.... 5% ? The goods would not fall under Chapter 25 of the Schedule, in view of the above discussion and findings. 33. Accordingly, we pass the following ORDER The Advance Ruling given vide TSAAR Order No. 02/2018 dated 25-03-2018 = 2018 (6) TMI 458 - AUTHORITY FOR ADVANCE RULING HYDERABAD TELANGANA passed by the Telangana State Authority for Advance Ruling in re: appellant M/s. Maheshwari Stone Supplying Co., Tandur, is modified as specified in para 32 above. The subject appeal is disposed of accordingly. -------------- Notes:- 1. Para No. (12B) is as given in the application for Advance Ruling, apparently referring to the said Sl.No. in the prescribed format Form GST ARA-01 for 'Application form for Advance Ruling', which requires furnishing "Description of Nature of activity in brief". 2 & 3. Sl. No.s (14) & (15) are as given in the application for Advance Ruling, apparently referring to the said Sl.No.s in the prescribed format Form GST ARA-01 for 'Application form for Advance Ruling', which requires furnishing "Question(s) on which advance ruling is required" and "Statement of relevant facts having a bearing on the question(s) raised". ....
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....xii) of Notification No. 41/2017- Central Tax (Rate) dated 14-11-2017 with effect from 15-11-2017. 13. Inserted by C (xii) of Notification No. 34/2017- Central Tax (Rate) dated 13.10.2017 14. Entries in Col. (2) & (3) against Sl.No.177A above, were substituted vide C (xlix) of Notification No. 41/2017- Central Tax (Rate) dated 14.11.2017 w.e.f. 15-11-2017. 15. Inserted by C (1) of Notification No. 41/2017- Central Tax (Rate) dated 14.11.2017 w.e.f. 15-11-2017. 16. Phrase in {} inserted by (C)(v) of Notification No.18/2018-Central Tax (Rate) dated 26th July, 2018, effective from 27th July, 2018. 17. Sl.No. 16 omitted by (D)(i) of Notification No. 41/2017- Central Tax (Rate) dated 14-11-2017 effective from 15-11-2017. 18. Sl.No. 17 omitted by (D)(i) of Notification No. 41/2017- Central Tax (Rate) dated 14-11-2017 effective from 15-11-2017. 19. Sl.No. 70 omitted by (D)(iii) of Notification No. 41/2017- Central Tax (Rate) dated 14-11-2017 effective from 15-11-2017. 20. As substituted by (D)(iv) of Notification No.34/2017- Central Tax (Rate) dated 13.10.2017. Originally, the entry read as "Worked monumental or building stone (except slate) and articles thereof, o....