TaxTMI 
TaxTMI 
2021 (7) TMI 651
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.... provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT Submissions made by M/s. Arco Electro Technologies Pvt. Ltd., the applicant, are as under:- 2.1 Applicant is manufacturing and supplying Brush Holder Assembly and Parts, Lead Wires and Insulating Rods for locomotives. The application is with regard to classification of these items and applicable GST rate thereon. Subject goods are supplied to Indian Railways (IR) and other customers who ultimately supply to Indian Railways after assembly in their products. 2.2 The subject goods are manufactured as per specification and drawings of IR. Currently, Brush Holder Assembly (made of non-ferrous castings and are assembled with springs, axles etc) and Lead Wires with fittings (made of specialized Fluonlex Cables designed for Rolling stock and fitted with Terminal Lugs, Tubes.) are being classified under HSN Heading 8503 and 8544 respect....
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.... CHAPTER 85 SAYS "Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles". 1) 8503- Parts suitable for use solely or principally with the machines of heading 8501 or 8502 2) 8501- Electric motors and generator (excluding generating sets) 3) 8502- Electric generating sets and rotary converters 4) 8544- Insulated (included enamelled or anodised) wire, cable (Including co-axial cables) and other insulated electric conductors whether or not fitted with connectors: optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors 5) 8547- Insulating fitting for electrical machines, appliances or equipment's, being fittings wholly of insulation material apart from any minor components of metal (for example, threaded sockets) incorporated during moulding solely for the purposes of assembly, other than insulators of heading 8546; electrical conduit tubing and joints therefore, of base metal lined with insulating material 6) 8546- Electrical insulators of any material. 3.3 C....
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....se of M/s. Rishabh Industries. Which pertains to the HSN Code 8504. 3.8 In view of above it is clear that the goods manufactured by M/s Arco Electro Technologies Pvt Ltd are specified under HSN Code 8503, 8544, 8547 and not under HSN Code 8607. These products are not solely used for Railway. The tax rate for these goods along with HSN Code 1. Brush holder, HSN Code-8503 2. Led wire with fittings, HSN Code 8544 3. Brush Holder Support Pin/Terminal Support/Brush Holder Arm HSN-8544. All Attract 18% tax rate. 4. Applicant's further submission dated 21.06.2021 in response to submissions made by jurisdictional officer 4.1.1 Indian Railways [IR] are manufacturing Electric and Diesel Electric Locomotives at various factories. The locomotives consists of electric power collection/ production equipment/ the control systems. 4.1.2 In a diesel-electric locomotive, the diesel engine drives either an electrical DC generator, or an electrical AC alternator-rectifier, the output of which provides power to the traction motors that drive the locomotive. There is no mechanical connection between the diesel engine and the wheels. The important components of diesel-electric propulsion ar....
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....er enclosed Ann.2]. The lenders have full details of drawings and specifications of the items to be quoted. Vendors are supposed to quote the Basic rate, unconditional discount, packaging charges, GST, freight, etc. IR calculates the 'Total cost to them' and tenders are awarded to the technically eligible vendors based on LI system of the Total cost as above. 4.7 The jurisdictional officer, in his report has mentioned that "But in this impugned case the goods have classified under specific HSN Code, also as per the railways purchase order only specific commodity mentioned along with the 18% tax rate. The commodities which are mentioned in purchase order are Brush holder without Carbon brush for Hitachi, Lead wire A-150 mm square for Hitachi." This is because we have quoted 18% GST which is irrelevant to the determination of the legal position. 4.8 We do not agree with the contention of the jurisdictional officer that These specific mentioned goods falls under HSN Code 8503 for Brush holder, 8544 for lead wire and 8547 for Brush holder support pin/terminal support/brush holder arm. 4.9 The subject goods are designed and produced specially for use in locomotives and canno....
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...., the applicant as well as the jurisdictional officer. 5.2 The issue before us is one of classification of the products manufactured and supplied by the applicant to the Indian Railways as well as to other clients who, according to the applicant make further supplies to the Indian Railways. 5.3 The goods in question are Brush Holder Assembly and parts. Lead Wires and Insulating Rods which as per the applicant's submissions are manufactured as per the specification and drawings of Indian Railways. Further, the applicant has submitted that if the said items are not sold to Indian Railways, then the said goods will be scrapped. 5.4 The applicant has submitted that, the impugned goods i.e. Brush Holder Assembly and part, lead Wires and Insulating Rods are parts of traction motors and are used in traction motors which are further required by the Indian Railways for use in the Manufacture of Locomotives and since the said products are finally used in locomotives of the Indian Railways, they are therefore required to be classified under heading 8607 of the GST Tariff. 5.5.1 Chapter heading 86.07 covers parts of railway or tramway locomotives or rolling stock. This heading covers p....
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....sfied in the subject case, as per the applicant's submissions, in as much as the impugned goods are identifiable as being suitable for use solely or principally with Locomotives manufactured by the Indian Railways. 5.5.6 Further, as per Note 2 to Section XVII, the expressions "parts" and "parts and accessories" do not apply to articles mentioned in (a) to (I) therein, whether or not they are identifiable as for the goods of this Section. It is seen that the subject goods do not find mention in the list of articles mentioned in the said Note 2 and therefore it can be concluded that the subject goods are excluded by the provisions of Note 2 to Section XVII, thus satisfying the second condition of Chapter 86.07 mentioned in para 5.5.1. 5.5.7 Note 3 to Section XVII mentions that references in Chapters 86 to 88 to "parts" or "accessories" do not apply to parts or accessories which are not suitable for use solely or principally with the articles of those Chapters. A part or accessory which answers to a description in two or more of the headings of those Chapters is to be classified under that heading which corresponds to the principal use of that part of accessory. 5.5.8 In the in....