TaxTMI 
TaxTMI 
2021 (1) TMI 895
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....ppellant") against the Advance Ruling No. GST- GST-ARA-47/2019-201B-33, dated 17.03.2020 = 2020 (7) TMI 50 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, pronounced by the Maharashtra Authority for Advance Ruling (hereinafter referred to as "the MAAR"). BRIEF FACTS OF THE CASE 3.1 M/s. A Raymond Fasteners India Pvt. Ltd.. (hereinafter referred to as "the Respondent") having registered address at Gate No.259, 276/8B. Nighoje Chakan, Tal-Khed, Pune-410501, is engaged in the manufacture of the Industrial clips and fasteners, which are used by their customers, dealing in the manufacture of automobiles. electrical appliances, solar energy equipment, etc. 3.2 The Respondent. vide application, dated 27.9.2019, had filed an application before the MAAR seeking Advance Ruling in respect of ten questions pertaining to classification of the goods manufactured by them. The MAAR, vide Ruling No. GST-ARA-47/2019-20/B-33, dated 17.03.2020 = 2020 (7) TMI 50 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, answered the first question sought by the Appellant. The remaining nine questions were not answered by the MAAR, stating that the Applicant had raised multiple questions requesting for classification....
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....rders issued by Tata Motors Ltd. to the Respondent, and the relevant invoices issued by the Respondent are evidence to this fact. 4.2 That the MAAR's Ruling, dated 17.03.2020, has not taken note of Hon'ble Supreme Court in the case of G.S. Auto International Ltd. Versus Collector of C. Ex., Chandigarh, 2003 (152) E.L.T. 3 (S.C.) = 2003 (1) TMI 700 - SUPREME COURT, wherein while examining the classification of the identical goods, the Apex Court held as under: 22. So far as Civil Appeal No. 5711 of 1999 = 2003 (1) TMI 700 - SUPREME COURT is concerned, the classification of goods was done under the Central Excise Tariff Act, 1985 (for the post-1986 period). The competing Heading numbers are 73.18 and 87.08, which reads as under: - Heading No. Sub-Heading No. Description of goods Rate of duty (1) (2) (3) (4) 73.18 Screws, bolts, nuts, coach-screws, screw-hooks, rivets, cotters, cotter-pins, washers (including spring washers) and similar articles, of iron or steel 7318.10 -Threaded articles 20% Heading No. Sub-Heading No. Description of goods Rate of duty (1) (2) (3) (4) 87.08 8708.00 Parts and accessories of the motor vehicl....
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....icles of Chapter Heading 87.08 which pertains to parts and accessories of motor vehicles of Chapter Heading Nos. 87.01 to 87.05. For the purposes of classification under Chapter Heading 87.08, the test to be applied is: whether the goods are suitable for use solely or primarily with articles of Chapter Heading Nos. 87.01 to 87.05; if the answer is in the affirmative, the goods will be classifiable under Chapter Heading 87.08, but if the answer is in the negative, they would have to be classified under Chapter Heading No. 73.18. Having regard to the finding that the goods in question cannot but be regarded as parts of automobiles, it has to be held that they are suitable for use primarily with articles of Chapter Heading Nos. 87.01 to 87.05. It follows that the goods in question cannot be treated as falling under Chapter Heading No. 73.18 and that they can properly be classified under Chapter Heading No. 87.08 of the Central Excise Tariff Act, 1985." 4.3 That the relevant section notes of both the sections XV & XVII remain same in Central Excise Tariff & GST Tariff. Also, the referred classification in the above decision was under the erstwhile Central Excise regime, but since the ....
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....e product; that it has been sufficiently established by a catena of judgments that the end use of a manufactured product cannot determine the classification of the product when the same falls under a specific heading. Reliance in this regard has been placed on the following Judgments passed by the Hon'ble Supreme Court: (i) India Aluminium Cables Ltd. Vs. Union of India [1985 (21) E.L.T. 3 (S.C.)] = 1985 (5) TMI 54 - SUPREME COURT (ii) Commissioner of Central Excise Vs. Carrier Aircon Ltd. [2006 (199) E.L.T. 577 (S.C.)] = 2006 (7) TMI 8 - SUPREME COURT 5.3 That reference has been made to the Hon'ble Supreme Court Judgment in the case of Dunlop India V/s. Madras Rubber Factory [1983 (13) ELT 1566 (S.C.)] = 1975 (10) TMI 94 - SUPREME COURT, wherein it was observed by the Hon'ble Supreme Court that where there is no specific reference to the end use or adoption of a particular article in a Tariff entry. the end use of the product cannot be the basis for classifying a product under such a Tariff entry. Thus, the Appellant's contention in as much as the classification of the impugned product should be dependent on the clearance of the product is not tenable. 5.4 That on perusal of....
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.....10.2010 6. The Appellant vide their letter dated 13.10.2020 made the following additional submissions: (i) That the Respondent, in Annexure II to their application dated 19.09.2019, themselves had acknowledged at Para No. 5 that "In the pre-GST regime. Threaded Metal Nuts were classified under Chapter 87 of the First Schedule to the Central Excise Tariff Act, 1985, which pertains to "Vehicles other than railway or tramway rolling stock" and more specifically, under the Heading 8708 and Tariff Item 87 08 99 00..." (ii) That this admitted legal position by the Respondent itself proves that the classification of the goods in question was settled in pre-GST era, as laid down by the Hon'ble Supreme Court in G.S. Auto International Ltd Vs. Collector of Central Excise, Chandigarh = 2003 (1) TMI 700 - SUPREME COURT. The said legal position continues to be applicable during the GST regime also, as there is no change in classification and legal position in respect of the referred classification in GST era. (iii) That it is also a fact on record that the goods under question are primarily used in automobiles. The said fact was noted by the MAAR at Para 5.1 in their findings in the impugn....
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.... as Tata Motors Part No. as being reflected in the Drawing of the Respondent. It proves customization/tailor made requirement of the goods in question and its suitability of use by the automobile manufacture for the vehicles manufactured by them. It also shows that the goods in question cannot be considered as parts of general use. PERSONAL HEARING 7. A personal hearing in the matter was held on 15.10.2020. which was attended by Shri Vikram Phadke, Deputy Commissioner as the representative of the Appellant, and by Shri Nishant Shah, Advocate, in the capacity of the Respondent in the subject case. 7.1 During the course of the personal hearing. the jurisdictional officer, apart from reiterating the earlier submissions made in the appeal memorandum. made the following additional submissions: (i) The Respondent, apart from fasteners/nuts manufactured and supplied to general customers also manufacture and supple metal nuts/fasteners, customized and tailor made as per the specifications, drawing designs approved by the automobile manufacturers. (ii) The sample Purchase Order/Invoice and drawing in respect of Metal Nuts manufactured and supplied to Tata Motors Ltd., as relied upon ....
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....t clearly show the customized / tailor made nature of goods in question. Hence, the goods in question cannot be considered as 'generic' or 'general parts use'. (vii) That the Respondent has failed to establish that the identical goods i.e. goods manufactured as per the specifications of automobile customers/manufacturers and drawings approved by the said automobile customers are also supplied to customers from the industries other than automobile sector. (viii) That the Part No./Material Code of the Respondent in respect of the goods supplied to M/s. Schneider Electric IT Business and to M/s. Tata Motors Ltd. is altogether different as evident from the respective invoices. That it is pertinent to note that the Respondent is not at liberty to supply the impugned goods in the spare market as is evident from the sample purchase order of M/s. Tata Motors Ltd. attached with the appeal memorandum. (ix) As regards the Respondent's plea that they had designed the impugned goods, it is submitted that the said drawing/design is approved by the Automobile Customer unlike the Standard goods, generic, or parts of general use, wherein the customers approval is not warranted. 8. The Respon....
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....ould be classified under the Tariff Item 7318 16 00 and not under the Tariff Item 8708 99 00. The MAAR has based the aforesaid ruling on the ground that the subject goods are to be construed as -parts of general use" in terms of Note 2(a) to Section XV of the first Schedule to the Customs Tariff Act, 1975 which deals with the chapters containing "Base Metals and Articles of Base Metals" and therefore the subject goods, being parts of general use, would not be considered as "parts" or "parts and accessories", as specified under Section XVII of the first Schedule to the Customs Tariff Act, 1975, dealing with chapters containing "Vehicles, Aircraft, Vessels and Associated Transport Equipment", in terms of the Note 2(b) to the aforesaid Section XVII ibid., which stipulates that "the expressions "parts" and "parts and accessories" do not apply to the "parts of general use", as defined in Note 2 to Section XV, of base metal ('Section XV) of the first Schedule to Customs Tariff Act, 1975, adopted mutatis mutandis under the CGST Act, 2017 in terms of the explanations (iii) and (iv) of the Notification No. 1/2017-C.T. (Rate), dated 28.06.2017. 10. We have also gone through the submissions ....
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....uirements provided by their customer, i.e., M/s. Tata Motors Limited, which is illustrated by the Part Number mentioned in the said drawing, which in turn is qualified by the code, i.e. TML(abbreviation of Tata Motors Limited). The Appellant has also stressed on the fact that the said Purchase Order placed by M/s. Tata Motors Limited to the Respondent also stipulates a condition, which reads as "Sale of goods mentioned in the Purchase Order to Snare Market is strictly prohibited" to contend that the goods, which are manufactured by the Respondent at the behest of their customers, are solely for use in the manufacture of the automobiles. Based on the above proposition, the Appellant contended that the impugned goods, as per the principle laid down by the Hon'ble Supreme Court in the case of G.S. Auto International Ltd. (Supra), can aptly be classified as 'parts and accessories" of the Motor vehicles under the Chapter Heading 8708 and the same cannot be considered as 'parts of general use' under the Chapter Heading 7318. 12. The Appellant have also relied upon another Hon'ble Supreme Court Judgment in the case of Cast Metal Industries (P) Ltd. Versus Commissioner of C. Ex.-IV, Kolka....
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....ent, which amongst other things, mentions the drawing document number and materials, approved by M/s. Tata Motors Ltd. The said drawing document, designed and made by the Respondent, also contains the part number of the automobile manufacturer, i.e., M/s. Tata Motors Ltd., rendering the said impugned product unique, in terms of its specifications, and materials used in the manufacture of the impugned goods which are identified by the material code of the impugned goods, and thereby lending support to our observation that the impugned goods have been manufactured at the behest of the automobile manufacturer as per the materials and design specifications of the motor vehicles to be manufactured by the automobile manufacturer, and the same is supplied solely or primarily to the said automobile manufacturer, which is also corroborated by the condition laid in the said sample Purchase Order placed by M/s. Tata Motors Ltd., which stipulates that Sale of goods mentioned in the Purchase Order to Spare Market is strictly prohibited. That said impugned goods are used primarily in the automobile industry, is an admitted fact, which is also noted by the MAAR in their findings of the impugned A....
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....m the automobile sector, such as electronic goods sector, solar equipment manufacturing sector, etc., thereby. contending that the impugned goods can be construed as parts of general use as the same is not being solely used in the automotive industry. To support the aforesaid contention, they have produced sample invoice issued by them to M/s. Schneider Electric IT Business in respect of the impugned goods. Countering this submission of the Respondent. the Appellant- Department has averred that the Respondent are not supplying the identical goods, i.e. the goods, which are manufactured by the Respondent at the behest and instance of automobile customer, e.g. Tata Motors Ltd., to the customer from the other sector. To substantiate the said claim, the Appellant, referring to the invoices raised to M/s. Tata Motors Ltd and to M/s. Schneider Electric IT Business, have pointed out that specifications such as material code adopted by the Respondent for the impugned goods supplied to M/s. Tata Motors Ltd., the automobile manufacturer, and to M/s. Schneider Electric IT Business, a customer from other industry apart from the automobile industry are altogether different, which leads to the c....