TaxTMI 
TaxTMI 
TaxTMI 
2021 (1) TMI 700
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....itha, Hosur, Tamilnadu-635109 is registered under the GST Act 2017 vide GSTIN No. 33AAGCS8525B lZKL. The applicant has sought Advance Ruling on the following question: Whether Wheel Side Protection Control Unit (WSP) and Pantograph supplied by the applicant, should be classified as "parts of railway or tramway locomotives or rolling stock, and parts thereof' (Viz under Heading 8607) for the purposes of levy of GST in terms of Section 9(1) of Central Goods and Services Act 2017 read with notification no.01/2017-Central Tax (Rate) dated 28.06.2017. The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant has stated that they are involved in the business of manufacturing, supplying and exporting equipment for the Rolling Stock industry. The said equipment includes, inter alia, railway door systems, grills for train coaches, braking systems and pantographs for railways. They are registered under the GST regime in the States of Tamil Nadu, Karnataka, Himachal Pradesh, West Bengal, Utta....
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....ves which controls the increase/decrease of the air pressure in the brake cylinders) to effectively control the brake cylinder pressure in case of any locking of the axles and to ensure a safe & smooth braking without sliding; * The instant the wheel to rail adhesion is brought within the optimum levels of pressure by the brake cylinder, the wheels are brought within the optimum/ safe range of skidding of axles in the instance of braking of the train; Various sub-components described supra are connected to each other through electrical wires via various mechanisms such as switches & connectors to essentially support the function of braking without skidding. * WSP also assists in control engineering, measurement, data acquisition, and internal system supervision. These features are carried out by micro controller which updates the measurement data in every fraction of a second. They have stated that an analogy may be drawn between the respective functions of WSP in railways/metro trains with those of an Anti-lock Braking System (ABS) in cars/ SUVs. They have also submitted technical literature of WSP issued by them and Handbook issued by the Indian Railways Centre for Advanced....
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....les, Aircraft, Vessels and Associated Transport Equipment. Chapter 86 falls within the ambit of the said Section and deals with 'railway or tramway locomotives, rolling stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signaling equipment of all kinds'. * Chapter Heading 8607, under which they have been classifying the subject goods, deals with parts of railway or tramway locomotives of rolling stock; such as Bogies, bissel-bogies, axles and wheels, and parts thereof. * The study of the relevant Chapter Notes prescribed under the CTA with respect to Chapter 86 clearly highlights that Heading 8607 would apply only to those 'parts'/ 'parts and accessories' of railway or tramway locomotives or rolling stock which are identifiable as being suitable for use solely or principally with the railway or tramway locomotives or rolling stock (viz. Note 3 to Section XVII) and also, these goods must not be specified in Note 2 to Section XVII. * It is clear vide Note 2 to Section XVII that the scope of Heading 8607 is very wide and one of the inclusions made for classification within the said Heading ....
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....ower supply to the train coach by acting as a linkage between the overhead power cables (which carry electricity) and the train coaches/ Metro trains (which use the said electricity to propel forward). Pantographs, right from the structure on which they are installed are designed for exclusive use on train or metro coach bodies hence, being designed in a manner, wherein they can immediately be fitted in conjunction with the insulation mechanism provided on the train coach bodies. Hence, the Pantographs are specifically mounted on insulators so as to ensure that the body of the locomotive/ train coach/ metro bogey is insulated against electrical current. It cannot per se be utilized independently on their own accord or with any other mode of transportation apart from trains or metro coaches as a Pantograph would not be required at all for the operation of other fossil fuel/ gas powered vehicles like cars, buses, trucks and airplanes. On account of trains being specifically required to be constantly connected to the overhead power cables for their operations in order to be in motion, the Pantograph is an instrument integral and intrinsic to the running of trains and metro coaches and....
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....03.2020 but the same was cancelled due to Covid-19 Pandemic. In view of the prevailing pandemic, the applicant was offered to be heard through digital media and the applicant accepted the same. The applicant was heard on 06.08.2020. The authorized Legal representative along with the authorized representative of the applicant appeared for the hearing virtually. They shared the written submissions and submitted the same through email. They stated that summons were issued by DGGSTI & the products on which ruling is sought is not a part of the summons. Copies of the summons were asked to be furnished. They reiterated the written submissions. The applicant was asked to furnish the details of classification in the pre GST regime, invoice copy/work order/class of recipients and it was recorded that on receipt of the above cited documents if required another hearing may be extended. 3.2 The applicant in their written submissions submitted vide email furnished the following : i. Relevant extracts of Notification No. 1/2017-C.T. (Rate) dated 28 June 2017 ii. Notification No. 14/2019-Central Tax (Rate) dated 30 September 2019 [amending Notification No. 1/2017-Central Tax (Rate)] iii. H....
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....al duty thereon (viz. GST on outward supplies and Customs Duty on imports). The details of Inquiry/Investigations along with the copies of summons, Intimations and SCN were furnished as Annexure-A to this letter. They have further stated that there was no outward supply of WSP in the erstwhile regime and the same was imported to be used in the manufacture of the final products. They requested to grant an additional hearing in order to enunciate all the facts in relation to inquiry/ investigations. 4.1 The Directorate General of GST Intelligence (DGGSTI) Hosur Unit was addressed to clarify whether the investigations initiated by them on the products supplied by the applicant includes WSP and Pantograph, the classification of which is sought by the applicant before this authority and if so relevant reports/communications were asked to be furnished. In this regard, DGGSTI Hosur unit, vide their letter F.No.INT/DGGI/HRU/21/2018-G1 dated 16.09.2020 submitted that an investigation has been initiated against the applicant regarding classification adopted by them on products supplied to Railways and classified by them under Chapter Heading 8607.; that the investigation covers the period f....
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.... calling for details of supplies made to Railways and others The applicant has submitted copies of the following case laws and stated that in these cases the application for advance ruling has not been admitted as the specific issue raised before the authority has been the subject of respective DGGSTI enquiries. * Commissioner of Income Tax-1(International Tax, Delhi & ors. Vs Authority for Advance Ruling, Income Tax, New Delhi & Anr. 2020 (8) TMI 770-Delhi High Court * Sage Publications limited U.K. Vs Deputy Commissioner Of Income Tax (International Taxation), Circle 142), N.Delhi 2016 (9) TMI 299-Delhi HC * M/s ID Fresh Food(India) Pvt Ltd 2020 (10) TMI 149-AAAR, Karnataka * Arihant Enterprises 2020 (32) GSTL 82 (App.AAR-GST-Mah) = 2019 (11) TMI 397 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA * Karnataka Co-operative Milk Producers Federation Limited [2020] 115 taxmann.com59 (AAAR-Karnataka) = 2020 (3) TMI 73 - APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKA They have further stated that in their case, WSP or Pantograph have not been considered/questioned/referred to at any juncture by the DGGSTI in any summons/Notice/ Letter; there have been no proceeding....
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....he same was not in their list of products prior to GST and they cleared only spares for WSP which has been reclassified by them under 9302 for the said period. ii. In respect of Pantograph, a corrigendum to Show cause notice was issued on 27.10.2020 for reclassification of Pantograph and its parts. In view of the above, they have reiterated that the investigation covers all products supplied by the applicant to Railways by classifying them under Chapter Heading 8607 since 01.07.2017 and it was initiated prior to their application for advance ruling. Hence, they opined that the application may not be considered. 7.1 The applicant vide their e-mail dated 12.11.2020, stated that they had received a corrigendum dated 27.10.2020 to the Show Cause Notice No. 02/2020 dated 18.06.2020; that as per the original show cause notice, DGGSTI authorities were in agreement and have not raised any question on their classification of "Pantograph and parts" under Chapter 8607 but vide the corrigendum dated 27.10.2020, the authorities have sought to question the classification of "Pantograph and parts" and levy differential excise duty; they strongly believe that the question of classification of ....
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....y the Applicant along with application, oral and written submissions made at the time of Virtual hearings and the comments/remarks of the Directorate General of Goods and Service Tax Intelligence, Hosur Unit. The applicant is involved in the business of manufacturing, supplying and exporting equipment for the Rolling Stock industry. The said equipment includes, inter alia, railway door systems, grills for train coaches, braking systems and pantographs for railways. The WSP and Pantograph in respect of which the classification has been sought vide the instant application are manufactured by the Applicant at their Factory located in Hosur in Tamil Nadu. They have stated that since September 2019 onwards, they have stopped imports of WSP from outside India and at present, both these products are primarily manufactured in India. The said goods are supplied by the Applicant to customers located in Tamil Nadu and other states. The applicant has sought ruling on the following question: Whether Wheel Side Protection Control Unit and Pantograph supplied by the applicant, should be classified as "parts of railway or tramway locomotives or rolling stock, and parts thereof (Viz under Heading....
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.... any provisions of this Act. Issuance of summon under Section 70 of the CGST Act 2017 and calling for definite particulars happens in the course of investigation. We find that the only contention of the applicant is the summon is generic in nature and the subject goods whose classification is sought before us was never part of the proceedings. 9.2 The applicant has provided a flow of events with documents and also has furnished the same with their remarks as Annexure-A (Inquiry/Investigation pertaining to Hosur) to the submission dated 10.09.2020 of the applicant. On perusal of these documents the following are seen: * DGGSTI Hosur in file F.No. INT/DGGI/HRU/21/2018-G1 dated 10.10.2018 has issued a Summon to Shri. Rohit Haldia, CFO of the applicant company to appear on 25th October 2018 with the following documents: * List of Invoices containing description of the item, chapter heading and GST rate charged along with copies of invoices (month wise) issued to Indian railways for supplies from July 2017 to September 2018 * List of Invoices containing description of the item, chapter heading and GST rate charged along with copies of invoices (month wise) where the same items ar....
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.... of 'Pantograph' has been furnished by the applicant to DGGSTI Hosur. Show Cause Notice No.02/2020 dated 18.06.2020, Corrigendum issued to the SCN dated 27.10.2020 seek the differential excise duty payable and the proceedings for the period from 01.07.2017 remains pending. DGGSTI, Hosur letter dated 23.11.2020 has categorically stated that the investigation is specific for the classification of goods for railways and covers all goods supplied by the applicant to railways under Chapter Heading 8607 and in respect of subject goods, it is stated that WSP was not in the list of products prior to GST and the spares for WSP was re-classified by the applicant from CETH 8607 to CETH 9032; while in respect of 'Pantograph', the investigation included the same and re-classification of the same for pre-GST period is issued through corrigendum dated 27.10.2020. 9.4 From the above facts, it is clear that DGGSTI has taken up investigations on the classifications adopted by the applicant on their supplies to Indian Railways and classified under CTH 8607. The subject goods are supplied to `Indian Railways' and the applicant classify the same under CTH 8607. The application is filed on 20.01.2020 w....