TaxTMI 
TaxTMI 
2021 (1) TMI 700
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....as 'Applicant'), Post Box No.39, Haritha, 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,....
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.... - which in turn generates signals in order to direct the dump valve (viz. valves 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 submitte....
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.... 2.4 On the interpretation of Law & facts, they have stated that • Section XVII of the Customs Tariff Act (CTA) deals with 'Vehicles, 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 XVI....
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....rts were specifically held to be covered under Heading 8607 of the Customs Tariff. • The basic utilization of the Pantographs is to store electric current within itself and provide uninterrupted power 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 requ....
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....ly classifiable under Heading 8607. 3.1 The applicant was extended an opportunity to appear for personal hearing on 11.02.2020. The applicant vide their letter dated 04.02.2020 sought adjournment and requested to reschedule the hearing. The hearing was scheduled to be held on 26.03.2020 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....
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....aw. Therefore, in their view, it is appropriate to say that there has been no proceedings pending under GST Law with respect to WSP and Pantograph. The applicant has further stated that they received notices/summons from DGGSTI Chandigarh and Custom Authorities on classification of certain goods. They have identified the products (other than WSP and Pantograph) which merited re-classification under different CTH and paid differential 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 ap....
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....nt of authorized person dated 25.10.2018 iii. Details of payment of differential duty iv. Letter dated 07.01.2020 of the applicant addressed to the DGGSTI, Hosur regarding the details required for supplied made to Railways and others for the period March2016 to June 2017 v. Recording of statement of the authorized person dated 10.01.2020 vi. Show Cause Notice issued by DGGSTI, Coimbatore dated 18.06.2020 vii. DGGSTI, Hosur letter dated 09.09.2020 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) TM....
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.... of Rs. 34,29,67,409/-along with interest of Rs. 6,60,86,739/- during the period 30.12.2018 to 19.10.2019. • the investigation is specific- for classification of goods for railways and covers all goods supplied by the applicant to railways under Chapter 8607 and has been initiated prior to their filing of Application for Advance Ruling. Further, with respect to the products for which the applicant has sought ruling on the classification viz., Wheel Side Protection Control Unit and Pantograph, they have stated that: i. In respect of Wheel side protection control unit, the 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 appl....
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....he purposes of the their Application. Also, they have submitted that the corrigendum is issued in respect of proceeding under the Central Excise Law and not under GST law. Therefore, the corrigendum would have no consequence or bearing on the admissibility of their Application. Thus, the question of classification of "Pantograph and parts" or the WSP was never part of "pending proceedings" before the DGGSTI at the time of filing the Advance Ruling Application. The issuance of the Corrigendum at this stage fortifies the said fact. 8.1 We have carefully examined the statement of facts, supporting documents filed by 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 a....
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....ing the investigations initiated by DGGSTI, HRU Hosur, has contended that the summon dated 10.10.2018 issued to them and the investigations are generic in nature and the classification of WSP and Pantograph were never contended by DGGSTI and therefore the classification of the subject goods were never part of 'Pending proceedings' before the DGGSTI at the time of filing the application before this authority. 9.1 The first proviso to Section 98(2) makes an application ineligible for admission if the Authority finds that the question raised in the application is already pending or decided in any proceedings' in the case of the applicant under 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 10.0....
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....hapter heading other than the above • The SCN No. 02/2020 dated 18.06.2020 and the corrigendum dated 27.10.2020 has been issued to demand the differential excise duty payable for the period upto 30.06.2017 9.3 It is evident from the documents called for in Summon No.33/2018 dated 10.10.2018 that the investigation initiated against the applicant is on the classification adopted by them on the products supplied to Railways and classified by them under Chapter Heading 8607 for the period from 01.07.2017 to 30.09.2018 and the applicable rate of GST adopted by them. The applicant has classified `Pantograph' under CTH 8607 and continues to do so while in respect of certain other products, they have re-classified and paid the differential taxes. The month-wise value in respect 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 ....