TaxTMI 
TaxTMI 
2021 (4) TMI 508
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....ct/ SGST Act" respectively) engaged in the manufacture and sale of drier and parboiling plant for the rice milling industry. 3. The applicant has sought advance ruling in respect of the following question: 1. Whether parboiling and drier plant is part of rice milling machinery as specified in the Notification dated 28-06-2017 under HSN 8437 issued under the CGST Act, 2017 taxable at 5% (2.5% CGST + 2.5% SGST)? 2. If the above mentioned plant/ machinery is not classified under HSN 8437, whether the same is to be taxed under HSN 8419 at the rate of 18% in the Notification dated 28-06-2017 (9% CGST + 9% SGST)? 4. Admissibility of the application: The question is about "determination of the liability to pay tax on any goods or services or both;" and hence is admissible under Section 97(2)(e) of the CGST Act 2017. 5. The applicant furnishes some facts relevant to the issue: 5.1 The applicant has submitted that a paddy processing plant consists of various sections which are involved with the activities of parboiling rice, drying, rice milling and polishing. Parboiling is a process of soaking, steaming and drying prior to milling. 5.2 The process of parboiling of paddy is carried....
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.... machinery classified under heading 8437 of the GST Tariff would be exigible to GST at the rate of 5% (2.5% CGST + 2.5% SGST). Further, Schedule III of the notification dated 28-06-2017 refers to goods taxable at the rate of 9% CGST. SI.No.320 of the said Schedule refers to machinery, plant or laboratory equipment inter-alia for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting etc classified under heading 8419 of Chapter 84 of the GST Tariff. Therefore, the machinery classified under heading 8419 of the GST Tariff would be exigible to GST at the rate of 18% (9% CGST + 9% SGST). 5.5 The applicant submits that Section XVI of the GST Tariff refers to "Machinery and Mechanical Appliances; Electrical Equipment" etc. Chapter 84 of Section XVI of the GST Tariff refers to "Nuclear Reactors, Boilers, Machinery and Mechanical, Appliances; parts thereof'. The applicant has submitted that for the periods prior to 01-05-2017, the applicant was clearing its product viz., parboiling plant under the Tariff item 8419 89 90 - "Other" of Heading 8419 of Chapter 84 of the Central Excise Tariff Act, 1985. Also, Heading 8437 of Chapter 84 ....
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....ct the language used in Note 3 to Section XVI of the GST Tariff which is reproduced hereunder for the purposes of immediate reference: "3. Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function". The applicant submits that from a reading of Note 3 appended to Section XVI of the GST Tariff, what emerges is that composite machines consisting of two or more machines fitted together to form a whole are to be classified as that machine which performs the principal function. 5.9 The parboiling and drier plant were classified by the applicant under Tariff item 8419 89 90 under the Excise Tariff Act. Alternatively, machinery used in the milling industry including rice mill machinery are classified under Heading 8437 and more specifically Tariff item 8437 80 20. By application of the language employed in Note 2 appended to Chapter 84 of the GST Tariff, the plant in question ought to be cla....
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.... setting aside the adjudication order classifying the product under various headings of 8419 has remanded the case to finalize the classification based on Board Circular dated 19-05-2010. They have also referred to a subsequent decision of the CESTAT, Principal Bench, New Delhi in the case of Jyoti Sales Corporation -Vs- CCE reported in 2011 (272) ELT 689 wherein it was held that, merely because such a plant is used along with the rice mill that itself will not transform it into a composite machinery inclusive of rice mill. Further, they have stated that the SLP filed by Jyoti Sales Corporation against the said decision was disposed by Hon'ble Apex Court vide order dated 11.02.2016 in Civil Appeal No.8612/2011. 5.12 The applicant has stated about the decision dated 11.02.2016 of the Hon'ble Apex Court, directing to get the conflict resolved by a Larger Bench of the Tribunal. It is also stated that the Circular dated 19-05-2010 was rescinded vide Circular No.982/06/2014-CX dated 15-05-2014 to the effect that classification of rice parboiling machine and drier may be made under Central Excise Tariff Heading 8419. 5.13 The applicant further referred to the decision of the La....
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....ar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 8. We have considered the submissions made by the applicant in their application for advance ruling as well as the submissions made by applicant and his authorized representatives during the hearing. 9. The main contention of the applicant is that whether parboiling and drier plant is part of rice milling machinery as specified in the Notification dated 28-06-2017 under HSN 8437 issued under the CGST Act, 2017 taxable at 5% (2.5% CGST + 2.5% SGST), If the above mentioned plant/machinery is not classified under HSN 8437, whether the same is to be taxed under HSN 8419 at the rate of 18% in the Notification dated 28-06-2017 (9% CGST + 9% SGST). 9.1 In view of the above, the issue before us to decide, so as to give the ruling to the question sought by the applicant, is whether the product of the applicant falls under HSN 8437 or 8419. Therefore, we proceed to examine the issue so as to arrive at the appropriate classification of the said product of the applicant. 9.2 The Jurisdictional Authority of the applicant which is The Commissionerate, Mangalore North ....
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....and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function" and contends that, composite machines consisting of two or more machines fitted together to form a whole are to be classified as that machine which performs the principal function. 9.4 In view of the above findings and submissions of the applicant, the Authority is of the following view: Initially CBEC vide its Circular No.924/14/2010-CS, dated 19-05-2010 [F.No.167/42/2009-CX.4], had clarified that Rice parboiling machinery and drier which are essentially for use in conjunction with the rice mill merit classification under heading 8437. 9.5 The Hon'ble Tribunal in the case of S.K.F Boilers and Dryers Pvt. Ltd., Vs CCE, Mangalore reported in 2011(264) E.L.T 425 Tri -Bang.) held that in view of the Department conceding that Board's Circular dated 19-05-2010 classifying produce under Heading 8437 ibid binding on Department, set aside the impugned order classifying product under Tariff Items 8419 and remanded the matter back to finalise classi....