TaxTMI 
TaxTMI 
2021 (1) TMI 895
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....Chakan), Pune-I Commissionerate ("the Appellant") 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 mul....
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....Metal Nut', required by M/s. Tata Motors Ltd., Purchase Orders 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. Des....
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....ar articles of other base metal; and the expression 'part and accessories' in Chapter Heading 87.08 does not apply to parts or accessories which are not suitable for use solely or primarily with articles 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....
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.... regard. the Respondent has also produced the invoices issued to M/s. Schneider Electric, which operates in the Electronic goods industry. 5.2 That classification of the product is not dependent on clearance of the 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 fo....
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....GST Tariff. 5.7 In view of the above submissions, the Respondent has submitted that the impugned product be classified under the heading. 7318 and not under the heading 8708 of the GST Tariff. APPELLANT'S /DEPARTMENT'S ADDITIONAL SUBMISSIONS DATED 13.10.2010 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 classifica....
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....lectric IT Business 130793007 (vi) The drawing in respect of Tata Motors Ltd. relied upon with the appeal also shows the Material No. (0121480002) of the Respondent and also of Tata Motors Ltd.'s Drawing Document No. (287081 104304) (a' mentioned in their Purchase Order). which is same 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 custome....
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....s of general use/generic, it was contended by the Appellant that the impugned goods are customised/tailor made and suitable for use in automobiles. The Appellant further contended that as a matter of fact, generic goods do not require any specifications and conditions whereas the Purchase Order/invoice/Drawing relied upon by the Department 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....
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....um encapsulating the facts of the case and the grounds of the appeal along with the written submissions made by the Respondent as well as the other relevant documents. We have also examined the impugned ruling passed by the MAAR. wherein it has been held that the subject goods, namely, 'Metal Nuts with metrical threads', 'Metal Nuts without metrical threads', and 'Metal Spring Nuts' should 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" an....
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....ore placing their Purchase Order. The Appellant has pointed out that the said Purchase Order includes the specifications details such as the Drawing Documents No., which is the same as the Part Number, the nomenclature adopted by the Respondent in their product design drawing, and thereby, contending that the drawing has been made by the Respondent keeping in mind the product's specifications/requirements 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 ....
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....r the Chapter Heading 8708, which covers the parts and accessories of the vehicles. Our observation is primarily attributed to the fact that the impugned products are manufactured by the Respondent as per the specifications/requirements approved by the automobile manufacturer, which is illustrated by the descriptions contained in the sample Purchase Order, placed by M/s. Tata Motors Ltd. to the Respondent, 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 auto....
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....t that the functional test for the classification of the goods is not the relevant test. Hence, the impugned goods will not be construed as 'parts of general use', and accordingly will not merit consideration under the Chapter Heading 73.18. 17. Now, coming to the contention put forth by the Respondent, wherein they claimed that impugned goods are supplied to the customers from the other sectors apart from 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 i....