TaxTMI 
TaxTMI 
2021 (10) TMI 148
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....equirement). 3. The appellant had also submitted that the above products are manufactured from the mixer which is prepared by mixing the aforesaid raw materials in desired proportion, that the HSN code of both the products is 68159910 and that they are paying GST @ 5% on 'Fly Ash Bricks' and 12% on 'Fly Ash Blocks' till notification No:24/2018-Central Tax (Rate) date 31.12.2018. The appellant had also enclosed copies of Sales invoice in respect of Fly Ash Bricks and Fly Ash Blocks. They have submitted the following question for the purpose of advance ruling: "Whether supply of Fly Ash Bricks and Fly Ash Blocks are covered under Chapter heading 68159090 and liable to taxed @ 5% and @ 12% respectively under the GST Act?" 4. After going through the application for Advance Ruling of the appellant, their submission as well as the records of the case, the GAAR found as under: (i) That 'Fly Ash Bricks' is specifically covered under Tariff item no.68159910 whereas 'Fly Ash Blocks' are covered under the Tariff item no. 68159990(others) of the First Schedule to the Customs Tariff Act, 1975(51 of 1975). (ii) That both Fly Ash Bricks and Fly Ash Blo....
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....No. GUJ/GAAR/R/20/2020 dated 02.07.2020, has ruled as follows - (1) The product 'Fly Ash Bricks' manufactured and supplied by Dipakkumar Ramjibhai Patel (M/s. Mahalaxmi Cement products and Timber) are classifiable under Tariff item No.68159910 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975). Applicability of GST rate on the said product would be 12% GST (6% SGST + 6% CGST) upto 14.11.2017 and 18% GST (9% SGST + 9% CGST) with effect from 15.11.2017 as per Notification No:01/2017Central Tax(Rate) dated 28.06.2017 (as amended from time to time) issued under the CGST Act, 2017 (2) The product 'Fly Ash Blocks' manufactured and supplied by Dipakkumar Ramjibhai Patel (M/s. Mahalaxmi Cement products and Timber) are classifiable under Tariff item No.68159990 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). Applicability of GST rate on the said product would be 12% GST (6% SGST + 6% CGST) upto 31.12.2018 and 5% GST (2.5% SGST + 2.5% CGST) with effect from 01.01.2019 as per Notification No:01/2017Central Tax(Rate) dated 28.06.2017 (as amended from time to time) issued under the CGST Act, 2017. 6. Aggrieved with the af....
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....nd with light bricks, this stress and tension is reduced manifold. (b) they absorb less heat and considering the Indian climate, are better compared to clay bricks. (c) Production of Fly Ash Bricks requires no fossil fuel and hence does not lead to the emission of greenhouse gases. (d) Production of clay bricks damages the top-soil whereas there is no pollution or environmental damage in the manufacturing process of Fly Ash Bricks, hence it has been put into the white category of products. (e) Fly Ash Brick does not demand the use of local agricultural soil, which in case of clay bricks is very often extracted from the farms leading to loss of fertile soil and losses to farmers. (f) In opinion of many construction workers and supervisors, the Fly Ash Brick building requires less water during construction. This is a very significant advantage in a country that faces water shortages practically every year. (ix) After introduction of the GST regime, the product Fly Ash Bricks and Fly Ash Blocks were classified under Notification No. 1/2017 (CGST-Rate) dated 28.06.2017 at Sr. no. 177 as under for the period from 1.7.2017 to 14.11.20....
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....ll settled that where a tariff or Schedule is based on HSN then the classification has to be made in accordance with the HSN and the explanatory notes thereto. Reference is invited to the judgement of Hon. Supreme Court in the case of Collector Of Central Excise v/s Wood Craft Products Ltd 1995 (77) ELT 23 (SC) wherein it is observed as under: "12. It is significant, as expressly stated, in the Statement of Objects and Reasons, that the central excise tariffs are based on the HSN and the internationally accepted nomenclature was taken into account to "reduce disputes on account of tariff classification". Accordingly, for resolving any dispute relating to tariff classification, a safe guide is the internationally accepted nomenclature emerging from the HSN. This being the expressly acknowledged basis of the structure of central excise tariff in the Act and the tariff classification made therein, in case of any doubt the HSN is a safe guide for ascertaining the true meaning of any expression used in the Act. The ISI Glossary of Terms has a different purpose and, therefore, the specific purpose of tariff classification for which the internationally accepted nomenclat....
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....ding 6815 which describes as under: "Fly ash bricks or fly ash aggregate with 90 per cent or more fly ash content; Fly ash Blocks." (xviii) The entry was inserted in the Schedule I w.e.f. 15th November 2017 by notification no 41/2017 Central Tax (Rate) Dt:14/11/2017 in consonance of the minutes of the GST Council suggested as follows (please refer page 19 point no 19.2 of minutes of meeting): 19.2 The Hon'ble Minister from Odisha stated that at Sr. No.40 of Annexure I1 of the Agenda Notes to agenda item 6(i), the rate of tax on fly ash bricks was rightly proposed to be reduced from 12% to 5%. He suggested that fly ash aggregates, which were chip like products and consumed almost 90% of fly ash, should also be covered in this entry and should be charged to tax at the rate of 5%. Shri TuhinKanta Pandey, Principal Secretary (Finance), Odisha, suggested that fly ash aggregates should be classified under Chapter Heading 68 15. The Secretary suggested that rate of tax on fly ash aggregate with 90% or more fly ash content, falling under Chapter Heading 6815 may be reduced to 5%.The Council agreed to the suggestion." (xix) Therefore, on going through the GST Coun....
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....h Bricks according to which Fly Ash Bricks comprises of fly ash content less than 60% and therefore, the stand taken by the respected advance ruling authorities of 90% or more fly ash content as an ingredient based on the custom tariff is erroneous and required to be modified in the present appeal. Other than the appellant, the major manufacturers of India who are manufacturing Fly Ash Bricks are using less than 60% of fly ash content. The appellant has attached extract of web site of Fly Ash Bricks manufacturer for ready reference and therefore, the advance ruling order is required to be modified in the present appeal by holding that Fly Ash Bricks are covered by entry 225B of Schedule I of notification no 1/2017 Central Tax (Rate) Dt:- 28.06.2017. (xxiii) In the alternative, they further rely upon the general rules of interpretation of the Customs tariff which have been borrowed for the purpose of interpreting GST rate notification by clause (iv) of the Explanation to the rate notification issued under the GST Acts. Rule 2(a) of the general rules of interpretation which is relevant for the present purpose reads as under: 2. (a) Any reference in a heading to an a....
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.....06.2017 and liable to 18% after 01.01.2019 by rejecting classification of Fly Ash Bricks under the entry 225B of Schedule-I of Notification No.1/2017-Central Tax(Rate) dated 28.06.2017. (xxviii) Respected advance ruling authorities has passed advance ruling order on 02.07.2020 in case of the appellant which is received by the appellant on 09.07.2020. The appellant is required to file an appeal within 30 days as per provision of section 100(2) of the GST Act. Therefore, last date to file an appeal is 09.08.2020. The appellant is relying upon the notification no 35/2020 Central Tax Dt: -03.04.2020 and notification no.55/2020 Central Tax Dt: - 27.06.2020 which speaks that any appeal which is required to be filed between 20/03/2020 to 30/08/2020 can be filed on or before 31/08/2020. 7. The appellant has concluded his submission by requesting as under: (a) The appeal may please be admitted for regular hearing by condoning delay in view of notification no.35/2020 & 55/2020 of Central Tax. (b) The impugned order passed by the learned Advance ruling authority in so far as it holds that Fly Ash Bricks is covered by entry 453 of Schedule III of notificati....
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.... file the present appeal) was hospitalized from 25.07.2020 to 08.07.2020 in Simmer Hospital(Surat) due to Pneumonia, was quarantined in the hospital between 08.08.2020 to 23.08.2020 as he had visited Covid-19 ward in the said hospital and that the advocate's son was hospitalized from 24.8.2020 onwards due to fever and infection. They have also relied upon Notification No.35/2020-Central Tax dated 03.04.2020 and Notification No.55/2020-Central Tax dated 27.06.2020 which speaks that any appeal which is required to be filed between 20.03.2020 and 30.08.2020 can be filed on or before 31.08.2020 and has requested to admit their appeal for regular hearing by condoning delay in filing appeal in view of the aforesaid notifications. We, therefore, find it necessary to go through the provisions of the aforementioned notifications. Notification No.35/2020-Central Tax dated 03.04.2020 reads as under: "G.S.R.....(E).- In exercise of the powers conferred by section 168A of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), read with section 20 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), and s....
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.... dated 03.04.2020 reads as under: "(i) where, any time limit for completion or compliance of any action, by any authority or by any person, has been specified in, or prescribed or notified under the said Act, which falls during the period from the 20th day of March, 2020 to the 30th day of August, 2020, and where completion or compliance of such action has not been made within such time, then, the time limit for completion or compliance of such action, shall be extended upto the 31st day of August, 2020, including for the purposes of- (a) completion of any proceeding or --------- (b) filing of any appeal, reply or application or furnishing of any report, document, return, statement or such other record, by whatever name called, under the provisions of the Acts stated above;" 11.3 As per the provisions of Notification No.35/2020-Central Tax dated 03.04.2020(as amended), any appeal which was required to be filed between 20.03.2020 and 30.08.2020 can be filed on or before 31.08.2020. We find that the appellant was required to file the appeal in the present case, on or before 07.08.2020, but has filed the same on 31.08.2020 i.e. within the time limit provi....
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....tiles of fly ash Kg. 68159920 Sanitary wares, kitchen wares and other made up articles of fly ash. Kg. 68159990 Other Kg. 14. On going through the above details, it is found that 'Fly Ash Bricks' are specifically covered under the sub-heading 68159910 and reads as 'Bricks and tiles of fly ash'. In view of the fact that there is a specific entry for 'Fly Ash Bricks' as mentioned above, it does not appear necessary to refer to the chapter notes or Explanatory notes in HSN. Even otherwise, the classification is not in dispute since the appellant themselves have stated in their submission that their product 'Fly Ash Bricks' falls under Chapter Heading 6815 of the Customs Tariff Act, 1975(51 of 1975). 15. Further, on going through the entry of the above item in the Notification No.01/2017-Central Tax(Rate) dated 28.06.2017, we find that 'Fly Ash Bricks' appears at Sr.No.177 in Schedule-II of the said notification on which the applicable rate of GST is 12% (6% SGST + 6% CGST). The same reads as under: S.No. Chapter/Heading/ Subheading/Tariff item Description of goods 177. 6815 Fly Ash Bricks and Fly Ash Blocks. 16. Notification No:01/....
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....sh content w.e.f. 15.11.2017 till 31.12.2018. (iii) that aforesaid entry of 'Fly Ash Bricks' appearing at Sr.No.225A has been shifted to Sr.No.225B in Schedule-I of the above notification w.e.f 01.01.2019 and remains unchanged till date. (iv) That 'Fly Ash Bricks' do not find any specific mention under any other entry in any of the Schedules-I, II, IV, V or VI of Notification No.01.2017-Central Tax(Rate) dated 28.06.2017( as amended from time to time) till date. 18. The appellant has contended that since Building bricks(clay bricks) are classifiable under HSN 6904 and are liable to 5% GST, therefore, Fly Ash Bricks should also be required to be classified at par with building bricks as the higher rate of GST on Fly Ash Bricks may decline the use of the same in the industry and effect the environment in long perspective. In this regard, we find that although 'Building Bricks' (clay bricks) are covered under Schedule-I of Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 (on which GST liability is 5%) from 01.07.2017 itself, as stated by the appellant, we find that 'Fly Ash Bricks' also find mention at Sr.No.225A of Schedule-I of the above no....
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....lumn 'Description of goods' corresponding to the Sr. No.225B above, which specifically states that it covers only 'Fly ash bricks or fly ash aggregate with 90 per cent or more fly ash content which also means that 'Fly Ash Bricks' classified under Heading '6815' of the Customs Tariff Act, 1975(51 of 1975) having less than 90% fly ash content does not get covered under the said entry. Since the appellant have themselves submitted that the 'Fly Ash Bricks' manufactured and supplied by them contain only 60% fly ash content and the copy of the Test Result dated 15.12.2020 submitted by them also shows the fly ash content therein as 60%, their aforementioned product will automatically get excluded from Sr.No.225B of Schedule-I of Notification No.1/2017Central Tax (Rate) dated 28.06.2017(as amended from time to time). 20. The appellant has also relied on the judgement of Hon. Supreme Court in the case of Reckitt Benckiser (India) Ltd. v/s Commissioner, Commercial Taxes (2015) 7 SCC 126 wherein the following observations have been made: "8. The basic controversy, therefore, which arose before the High Court was whether the above items fell within the sub-Heading 380....
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.... to the extent of classification made of Fly Ash Bricks under Entry 453 of Schedule III of notification no 1/2017 Central Tax (Rate) Dt:- 28/06/2017 and required to be held that the Fly Ash Bricks are covered by entry 225B of Schedule I of the rate notification no.1/2017 Central Tax (Rate) of the GST Act. 21.2 In this regard, it is to mention that it may be a fact that 'Fly Ash Bricks' and 'Fly Ash aggregates' were differently classified as per the recommendations of the Council for changes in GST/IGST rate and classification in respect of GST rate as stated by the appellant. However, it is also a fact that the Government vide it's Notification No.41/2017Central Tax(Rate) dated 14.11.2017(which amended Notification No.01/2017-Central Tax(Rate) dated 28.06.2017) omitted 'Fly Ash Bricks' from Sr.No.177 of Schedule-II of Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 and inserted Sr.No.225A in Schedule-I of No.01/2017-Central Tax(Rate) dated 28.06.2017 w.e.f. 15.11.2017 which read as under: S.No. Chapter/Heading/ Subheading/Tariff item Description of goods 225A. 6815 Fly ash bricks or fly ash aggregate with 90 percent or more fly as....
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.... fly ash content and the copy of the Test Result dated 15.12.2020 submitted by them also shows the fly ash content therein as 60%, i.e. less than 90% fly ash content, it automatically gets excludes from Sr. No.225B above. 22. The appellant has also contended that without bonding component, bricks cannot be manufactured; that Fly Ash does not have any bonding component and it is impossible to manufacture Fly Ash Bricks which are having more than 90% of fly ash content and therefore, the entry 225B of Schedule I of notification no.1/2017 Central Tax (Rate) become redundant though it specifically covers Fly Ash Bricks if the view of the advance ruling authorities is accepted. The appellant has further contended that as per Wikipedia, Fly Ash Bricks comprises of fly ash content less than 60% and therefore, the stand taken by the advance ruling authorities of 90% or more fly ash content as an ingredient based on the custom tariff is erroneous and required to be modified in the present appeal; that the major manufacturers of India who are manufacturing Fly Ash Bricks are using less than 60% of fly ash content and therefore, the advance ruling order is required to be modified in the pr....
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....therefore, Rule 2(a) of the General Rules of Interpretation would not be applicable in this case. 23.2 Further, as per Rule 1 of the General Rules of Interpretation of the Customs Tariff Act, 1975, classification is required to be determined according to the terms of the headings and any relative Section or Chapter Notes. The Hon'ble Supreme Court has held in the case of Commissioner of Central Excise, Nagpur Vs. Simplex Mills Co. Ltd. [2005 (181) ELT 345 (SC)] as follows:- "11. The rules for the interpretation of the Schedule to the Central Excise Tariff Act, 1985 have been framed pursuant to the powers under Section 2 of that Act. According to Rule 1 titles of Sections and Chapters in the Schedule are provided for ease of reference only. But for legal purposes, classification "shall be determined according to the terms of the headings and any relevant section or Chapter Notes". If neither the heading nor the notes suffice to clarify the scope of a heading, then it must be construed according to the other following provisions contained in the Rules. Rule-I gives primacy to the Section and Chapter Notes along with terms of the headings. They should be first applied. If ....
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....in 'Fly Ash Bricks' with 90% or more fly ash content, finds mention. However, since the 'Fly Ash Bricks' manufactured by the appellant are containing Fly Ash content of only 60%, the same will not be covered under the said Sr.No.225A, as discussed earlier. We also find that vide Notification No.24/2018-Central Tax(Rate) dated 31.12.2018 which amended Notification No.1/2017-Central Tax (Rate) dated 28.06.2017, Sr.No.225A has been amended to read as under wherein the entry at Sr.No.225A has been shifted to Sr. No.225B: S.No. Chapter/Heading/ Subheading/Tariff item Description of goods 225A 66020000 Walking sticks including seat sticks. 225B 6815 Fly ash bricks or fly ash aggregate with 90 per cent or more fly ash content; Fly ash blocks"; Therefore, since the 'Fly Ash Bricks' (containing 60% fly ash content) manufactured and supplied by the appellant does not find mention in any of the entries of any of the Schedules I, II, IV, V and VI of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017(as amended from time to time), we conclude that the same would be covered under Sr.No.453 of Schedule-III of Notification No:01/2017-Ce....