TaxTMI 
TaxTMI 
2018 (12) TMI 1276
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....all 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 (1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-Section (l) 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. ******* 1. The subject appeal has been filed under Section 100(1) of the Telangana Goods and Services ....
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....ling reagents" respectively. The appellants had stated that the impugned goods were used for determining / verifying soil health in terms of the parameters i.e., soil pH, Electrical Conductivity, Organic Carbon etc. The appellants claimed that the impugned goods were covered by the exemption entry at Sl.No.137 of Notification No. 2/2017 -Central Tax (Rate) dated 28-6-20171 which reads as follows: Sl. No. Chapter/Heading/Subheading/Tariff item Description of Goods Rate 137 Schedule- of Notification No.2/2017 Central Tax (Rate) 8201 Agricultural implements manually operated or animal driven i.e. Hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry Nil The appellants contended that the Minilab and Refill Reagents were exclusively used for Agriculture and hence fall for consideration as "Agricultural implements" of Heading 8201 as mentioned in the above entry. 4.2. The Adv. Ruling Authority, vide the impugned order, after considering the descriptio....
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....rthy, Senior Research Officer (Technical person) of the company appeared, apart from the representatives of the appellant and Department, mentioned above. Both the parties filed written submissions; the appellants also submitted copies of certain documents viz., a leaflet of the item "Mridaparikshak", Operation manual/Working Protocol for "Mridaparikshak-Minilab", Soil Health Card apart from a compilation of case-laws relied upon by them. 6.3. Sri T.S.R. Murthy, the technical person explained the various aspects pertaining to the impugned goods including the nature, composition, functionality, method & manner of usage, form of supply etc. in detail, as follows: (a) He produced before the Bench the main equipment "Mridaparikshak" and explained that the product described as "Mridaparikshak - MiniLab for Agriculture Soil Testing" as per the tax invoice on page 29 of the appeal booklet is actually a set of things / instruments / items / reagents (which are as shown in the photograph / leaflet submitted by them), and that out of these various items they are now showing to the Bench only the main item or instrument which is called as "Mridaparikshak". The list of these various items / ....
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.... Bench, he explained that some parameters such as pH, EC (Electrical Conductivity) and OC (Organic Carbon) are directly measured by the system whereas some others for example "Available Nitrogen" are thereafter internally calculated based on in-built logic/software. For example, the value of the parameter "Available nitrogen" is calculated on the basis of the measured "Organic Carbon". He explained that the details in this regard are given in the manual filed by them. With this, the technical person concluded his deposition. (d) The Counsel mentioned that though it is true that the item "Mridaparikshak" is measuring various parameters of the soil and in fact the name itself i.e, Mridaparikshak means 'tester of soil', but the fact remains that the item is working on soil, that the item is used for farmer, that the item is used for agriculture, and that therefore going by the end-use test it should be classified in Chapter 82 as 'Agriculture tools'. He also referred to the case laws which he has filed as per which the benefit of doubt should go to the taxpayer. (e) The Bench raised a query as to how the item does not fall under Heading 90.27 which inter-alia refers to 'instruments ....
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....by the appellant; or they are classifiable under Heading 9027 ibid as held by the Adv. Ruling Authority ? (iii) Whether the goods i.e, Mridaparikshak-Minilab as also the Refill Reagents are covered by the entry at Sl.No. 137 of Notification No. 2/201 7-Central Tax (Rate) dated 28-6-2017 with 'NIL' rate of tax as claimed by the appellant; or they are chargeable to 9 % CGST + 9 % SGST as per the impugned Order? 9. In order to determine the aforesaid questions, first the nature, usage etc. of the goods involved (hereinafter also referred to as "impugned goods") are to be considered, followed by the relevant Tariff entries and statutory provisions etc.; and thereafter, the applicability or otherwise of the exemption-Notification entry to the impugned goods. [Applicability/otherwise of the case-laws cited by appellant is dealt at appropriate places in the course of our discussion & findings]. 10. Details regarding the description, nature, functionality, usage etc. of the impugned goods are as available in the detailed record of personal hearing reproduced above [read with the Operation Manual / Working Protocol submitted by the appellants] and hence not reiterated again. From the sam....
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....supplies consisting of two or more supplies of goods, is governed by Section 8 of the Act read with the definitions of the terms "composite supply", "principal supply" and "mixed supply" as given in the Act. In the instant case, admittedly the Soil Testing Minilab consists of the main instrument along with various other accessories etc., as supplied. However, the aforesaid aspect of whether supply of Minilab is a composite supply or mixed supply, does not find any mention / discussion / examination in either the proceedings before the Adv. Ruling Authority or the impugned order nor also put forth before us, by either parties to the appeal. 11.2. As seen, the appellants had, in their initial application sought a single classification under Heading 8201 for the Agriculture Soil Testing Minilab as such (and not merely for the Mridaparikshak instrument) even though mentioning that the said Minilab comprises the main electronic instrument Mridaparikshak and also other items/accessories, which are supplied together (including the Reagents in the first supply). The Department / jurisdictional officers have also not raised any dispute as regards whether the supply of Minilab constitutes a....
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.... ........................ Chapter 82 Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal Notes : 1. Apart from blow lamps, portable forges, grinding wheels with frameworks, manicure or pedicure sets, and goods of heading 8209, this Chapter covers only articles with a blade, working edge, working surface or other working part of: (a) base metal; (b) metal carbides or cermets; (c) precious or semi-precious stones (natural, synthetic or reconstructed) on a support of base metal, metal carbide or cermet; or (d) abrasive materials on a support of base metal, provided that the articles have cutting teeth, flutes, grooves, or the like, of base metal, which retain their identity and function after the application of the abrasive. .............. Tariff Item Description Unit (1) (2) (3) 8201 HAND TOOLS, THE FOLLOWING: SPADES, SHOVELS, MATTOCKS , PICKS, HOES, FORKS AND RAKES; AXES , BILL HOOKS AND SIMILAR HEWING TOOLS; SECATEURS AND PRUNERS OF ANY KIND ; SCYTHES, SICKLES, HAY KNIVES, HEDGE SHEARS, TIMBER WEDGES AND OTHER TOOLS OF A KIND USED IN AGRICULTURE, HORTICULTURE OR FORESTRY. 8201 10 00 - Spade....
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....photometers u 9027 30 90 --- Other u 9027 50 - Other instruments and apparatus using optical radiations (UV, visible, IR) : 9027 50 10 --- Photometers u 9027 50 20 --- Refractometers u 9027 50 30 --- Polarimeters u 9027 50 90 --- Other u 9027 80 - Other instruments and apparatus: 9027 80 10 --- Viscometers u 9027 80 20 --- Calorimeters u 9027 80 30 --- Instruments and apparatus for measuring the surface or interfocial tension of liquids u 9027 80 40 --- Nuclear magnetic resonance instruments u 9027 80 90 --- Other u 9027 90 - Microtomes; parts and accessories : 9027 90 10 --- Microtomes, including parts and accessories thereof kg. 9027 90 20 --- Printed circuit assemblies for the goods of sub-heading 9027 80 kg. 9027 90 90 --- Other kg. 12.2. The Rules for Interpretation of the First Schedule to the Customs Tariff Act, 1975 (also referred in the Explanation to Notification No. 1 /2017- Central Tax (Rate) dated 28.06.2017), read as follows: "GENERAL RULES FOR INTERPRETATION OF THE SCHEDULE Classification of goods in this Schedule shall be governed by the following principles: 1. The titles o....
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....rder 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 relevant] 13.1. First, we deal with classification of the Mridaparikshak Minilab. On considering the nature, functions, usage etc. of the said Minilab vis-d-vis Heading 8201 claimed by appellant, the following position emerges: (i) Heading 8201 covers goods which are Hand-tools, of the types specifically enumerated thereunder i.e, 'Spades' to 'Timber-wedges' and "other tools of a kind used in agriculture, horticulture or forestry". Admittedly and undisputedly, the Minilab does not fall under any of the specific enumerated items 'Spades' to 'Timber-wedges'. (ii) The appellants' claim is that they fall under the phrase "other tools of a kind used in agriculture", appearing in the Heading. 13.2. We find the above claim to be untenable, for the following reasons: (i) The construction of description in Heading 8201 is a typical one attracting application of the principle of 'ejusdem generis' ....
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.... in construing the words "or any other process", the import of the specific expressions will have to be kept in mind. (See: Collector of Central Excise, Bombay vs. Maharashtra Fur Fabrics Ltd. (2002) 7 SCC 444 = 2002 (9) TMI 108 - SUPREME COURT OF INDIA). Therefore, the processes, with which we are concerned in the present appeals must take their colour from the process of bleaching, dyeing, printing, shrink- proofing, tentering, heat-setting, crease-resistant processing, specifically mentioned in the note. Grasim Industries Ltd. "10.In the background of what has been urged by the assessee it has to be further seen whether the principles of ejusdem generis have application. The rule is applicable when particular words pertaining to a class, category or genus are followed by general words. In such a case the general words are construed as limited to things of the same kind as those specified. The rule reflects an attempt to reconcile incompatibility between the specific and general words in view of the other rules of interpretation that all words in a statute are given effect if possible, that a statute is to be construed as a whole and that no words in a statute are presumed to ....
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....d every items used for agriculture would be covered therein. 14.2. Further, the Tariff specifically covers various items such as harvesting machinery, threshing machinery etc., which are also used exclusively in agriculture; under other headings; examples given below. 196. 8432 Agricultural, horticultural or forestry machinery for soil preparation or cultivation; lawn or sports-ground rollers 197. 8433 Harvesting or threshing machinery, including straw or fodder balers; grass or hay mowers; machines for cleaning, sorting or grading eggs, fruit or other agricultural produce, other than machine of heading 8437 The appellants' interpretation that any item exclusively used for agriculture has to fall under Heading 8201 under the category "other tools of kind used in agriculture" would render various other specific entries in the Tariff, such as those above, as redundant. Clearly, such interpretation is impermissible. 15. In view of the above, we hold that the goods i.,e the Mridaparikshak Instrument / the Minilab are not classifiable under Heading 8201 as claimed by the appellants. 16.1. Coming to the question of classification of the Minilab under Heading 902....
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....tant: It may be noted by the user that for the analysis of Organic C, Available P, K, S, Zn, Fe, Mn, Cu, and B, the instrument has to be set at zero level with distilled water... This has to be separately done before every analysts"7 (ii) "1) Please note that entire analysis of micronutrients has to be done in double layer distilled water"8, (iii) "These filtrates will be used for the analysis of Fe, Mn and Cu as explained below"9, (emphasis added). (v) In fact, the meaning of the words "Reagents" as per standard dictionaries is "a substance that, because of the reactions it causes, is used in analysis and synthesis"10 A substance or mixture for use in chemical analysis or other reactions"11 Thus usage of Reagents in itself denotes that the Minilab is used for conducting chemical analysis. 16.2. From the aforesaid material on record and also considering the detailed explanation given by the appellant-company's Technical person w.r.t. the method/manner of usage of the Mridaparikshak instrument / Minilab during the hearing before us, we conclude that the said goods are designed, intended and used for conducting "chemical analysis". As such, the same would rightly fall within t....
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....the above, we find that Heading 9027 in the Tariff mentions the names of only some such instruments for physical / chemical analysis illustratively, as referred earlier. As such, the Adv. Ruling Authority was right in referring to the HSN Notes and in arriving at the conclusion basing on the specific mention therein of pH meter, Wet Chemical Analyser; which are used for the similar functions of measuring / determining the pH factor, inorganic / organic components etc., as done by the impugned Mridaparikshak / Minilab. It is a well-settled legal proposition that where the Tariff-Schedule is based upon and structured on the same pattern as the HSN, the HSN Notes are relevant and a safe guide for deciding issues of classification. This principle has been enunciated in a catena of judgements, including those of Hon'ble Supreme Court in CCE, Shillong vs Wood Craft Products Ltd. 1995 (77) ELT 23 (SC) = 1995 (3) TMI 93 - SUPREME COURT OF INDIA, CCE, Hyderabad vs. Bakelite Hylam Ltd., 1997 (091) ELT 0013 (SC) = 1997 (3) TMI 598 - SUPREME COURT Commissioner of C.Ex., Goa vs Phil Corporation Ltd. 2008 (223) ELT 9 (SC) = 2008 (2) TMI 3 - SUPREME COURT OF INDIA etc. [Though these decisions are....
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..... 23.1. In so far as classification of Refill Reagents under Heading 9027 - as held by the lower Authority - is concerned, we find as follows. The lower Authority's reasoning and findings are that Refilling Reagents are part of Soil Testing Minilab; hence, parts and accessories identifiable as being solely or principally for use with instruments / apparatus of Heading 9027 are also to be classified under Heading 9027. This is apparently by applying Note 2 (b) to Chapter 90 supra, though not expressly stated so in the impugned order. 23.2. The appellants have, either in the grounds of appeal or further submissions, not disputed either the finding of the lower Authority that the Refill Reagents are solely or principally for use with the Mridaparikshak Minilab falling under Heading 9027 nor as to the application of Note 2 (b) of Chapter 90, for determining the classification. As such and on this count alone, the decision in the impugned Order classifying the Refill Reagents under Heading 9027 merits to be upheld. 23.3. Notwithstanding the same, on our independent examination, we find ourselves in agreement with the decision of the lower Authority in this regard, in view of the foll....
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....ust as aviation petrol is not apart of the aero-plane nor diesel is a part of a bus in the same way, ribbon is not a part of the typewriter though it may not be possible to type out any matter without it." (vi) Similarly, in Annapurna Carbon Industries Co vs State of Andhra Pradesh 1976 AIR 1418 = 1976 (3) TMI 156 - SUPREME COURT OF INDIA, Hon'ble Supreme Court held that 'Cinema Arc Carbons' are accessories to Cinematographic equipment. (vii) Ratio of the above decisions squarely applies in respect of the Refill Reagents in the instant case. The Refill Reagents, without which, as it appears in the given facts of the case, the Minilab cannot be used / put to function by the customers for conducting the required chemical analysis, falls to be considered as an accessory to the Minilab. Thus, it is evident in the facts of the case that the Refill Reagents are suitable for use solely and principally with the Mridaparikshak Minilab, rather it is the only use and none otherwise. Hence, classification of Refill Reagents would be squarely covered in terms of Note 2(b) to Chapter 90. The residuary clause (c) of Note 2 is therefore not relevant. 24. In view of the above, with regard to the....
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....s. Collector of Customs, Bombay 1997(93) ELT.641 (S.C.) = 1997 (7) TMI 117 - SUPREME COURT OF INDIA Cited by appellant as STC 111 (page 69) Hon'ble SC Pre-mix of Vitamin AD-3 (feed) grade not for medicinal use, whether falls under "Animal feed supplement" and exempted under Notification 234/82-CE dated 01-11-1982 2. D.H. Brothers Pvt Ltd vs. Commissioner of Sales Tax, UP Lucknow = 1991 (8) TMI 288 - SUPREME COURT OF INDIA Hon'ble SC Whether a Sugarcane Crusher is an Agricultural Implement within the enumeration in UP Sales Tax exemption Notification dated 14 November, 1980. 3. Indo National Ltd vs. State of Andhra Pradesh - 1987 64 STC 382 AP Hon'ble High Court of Andhra Pradesh Classification of 'Dry Cells' under First Schedule to the Andhra Pradesh General Sales Tax Act. 4. State of Andhra Pradesh vs. Karnatakam Govindayya Setty And Sons Hon'ble High Court of Andhra Pradesh Whether "vermicelli" popularly called "shevaya" is "maida" falling within entry 60 of First Schedule to the Andhra Pradesh General Sales Tax Act, 1957. 5. Jaya Food Industries Pvt Ltd vs Commercial Tax Officer, Nampally Circle, Hyderabad = 1987 (8) TMI 439 - ANDHRA PRADESH HIGH COURT Hon....
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.... principles are not applicable to the present case. (iv) We may further mention that it is well-settled legal position that precedent decisions can have application / binding value only in respect of identical (and not merely similar) set of facts and circumstances. Hon'ble Supreme Court in Collector of C.Ex., Calcutta vs Alnoori Tobacco Products 2004 (170) ELT.135 (SC) = 2004 (7) TMI 91 - SUPREME COURT OF INDIA had held as follows: 11. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are ....
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....he impugned goods are correctly classifiable under Heading 9027 of the Tariff; they are not classifiable under Heading 8201 ibid. Further the impugned goods are not eligible for the exemption vide entry Sl.No. 137 of the Notification No. 2/2017- Central Tax (Rate) dated 28-6-201 7. The appellants have not made out any case for interference with the Adv. Ruling Authority's ruling as above, which therefore merits to be upheld. 30. Accordingly, we pass the following ORDER The Advance Ruling pronounced vide TSAAR Order No. 02/2018 dated 30-052018 = 2018 (6) TMI 465 - AUTHORITY FOR ADVANCE RULING HYDERABAD TELANGANA passed by the Telangana State Authority for Advance Ruling in re: appellant M/s. Nagarjuna Agro Chemicals Pvt. Ltd., Hyderabad is confirmed. The subject appeal is disposed of accordingly. ---------------------- Notes: 1. Under the scheme of GST-taxation, for every Central Tax (Rate) Notification issued, a corresponding Notification is issued by State under respective state GST Act. As such, for ease of reference and appreciation of the discussion, the references hereinafter are made by citing the relevant Central Tax Rate Notification(s)/entries....