TaxTMI 
TaxTMI 
2024 (8) TMI 642
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.... shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (herein referred to as an Act) are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act. M/s. V M Polymers (Mohan Sujatha), No.60, Water Tank Street, Varadharajapuram Medu, Coimbatore-641015 (hereinafter called as "the Applicant") is engaged in the business of manufacturing plastic articles used as parts of electric accumulator (commonly known as "high power batteries"). They are registered under the GST Acts with GSTIN: 33BYTPM5795A1Z1. 2. The Applicant submitted a copy of challan dated 07-10-2023 evidencing payment of application fees of Rs,5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. 3. They have preferred this application seeking Advance Ruling on the following: (1) Whether the products viz. rope handle, vent plug and sp....
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....ndle Polypropylene (hereinafter referred to as "PP") Raw material is moulded using an injection moulding machine. It has three parts viz. PP rope, rope moulded and cover for moulded part and the raw material is the same for all such parts Lifting of lead acid battery. Vent plug (Also known as "transportation vent plug" but it is also used as regular vent plug by few customers) Polypropylene Raw material is moulded using an injection moulding machine. It has three parts viz. main PP part, insert part, PP /PE brought-out items. Transportation purposes Split top / bottom support High density Polyethylene (hereinafter referred to as HDPE) / LLDPE Raw material is moulded using an injection moulding machine. Support to top and bottom of the battery plates. STATEMENT OF INTERPRETATION OF LAW 4.4. The applicant submitted that Chapter "39" deals with "plastics and articles thereof; rubbers and articles thereof. More specifically, Heading No. "3926" deals with "Other articles of plastics and articles of other materials of headings 3901 to 3914". Whereas, Chapter "85" deals with "electrical machinery and equipment and parts thereof; sound recorders and reproducers, telev....
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....e with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3. 3. When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable wider two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3 (a), shall be classified as i....
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....cialibus non derogant is dealt within Vol. 44(1) of the 4th Edn of Halsbury's Laws of England at Para 1300, as follows: "The principle descends clearly from decisions of the House of Lords in Seward v. Vera Cruz ((1884) LR 10 AC 59 / and the Privy Council in Barker v. Edger (1898 AC 748 )) and has been affirmed and put into effect on many occasions... Corpus Juris Secundum, 82 C.J.S. Statutes 482 states: when construing a general and a specific statute pertaining to the same topic, it is necessary to consider the statutes as consistent with one another and such statutes therefore should be harmonised, if possible, with the objective of giving effect to a consistent legislative policy. On the other hand, where a general statute and a specific statute relating to the same subject-matter cannot be reconciled, the special or specific statute ordinarily will control. The provision more specifically directed to the matter at issue prevails as an exception to or qualification of the provision which is more general in nature, provided that the specific or special statute clearly includes the matter in controversy (Edmond v. United States [137 L Ed 2d 917), Warden u Marrero [41 LEd ....
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....009, which held as below:- 12. We would, at this stage, take on record the well-settled principle that words in a taxing statute must be construed in consonance with their commonly accepted meaning in the trade and their popular meaning. When a word is not explicitly defined, or there is ambiguity as to its meaning, it must be interpreted for the purpose of classification in the popular sense, which is the sense attributed to it by those people who are conversant with the subject matter that the statute is dealing with This principle should commend to the authorities as it is a good fiscal policy not to put people in doubt or quandary about their tax liability. The common parlance test is an extension of the general principle of interpretation of statutes for deciphering the mind of the law-maker. 4.10. The applicant further submitted that it is essential to note that the plastic articles in question are used for transporting, lifting, packing and other similar activities and not the essential parts of electric accumulators. That it cannot be said that the impugned articles are essential parts of electric accumulators without which the accumulators cannot function. The applicant....
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....ppearing in the First schedule to the Customs Tariff Act, 1975 are examined. * The Chapter Note 2(s) to Chapter 39 of the Customs Tariff Act, 1975 (CTA for short) is reproduced as below: "2. This chapter does not cover: .... (s) articles of Section XVI (machines and mechanical or electrical appliances)". * Thus, Articles of Section XVI [machines and mechanical or electrical appliances) are excluded from Chapter 39. Further, it is opined that none of the descriptions of goods mentioned under the heading 3926 covers the goods for which the Advance Ruling is sought by the Applicant. * As per Section Note 2 of Section XVI of the CTA which is reproduced below; Subject to Note 1 to this Section, Note I to Chapter 84 and. to Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules: a. parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8303, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings:" * Further, Chapter Note 3 to Chapter 85 of CTA is a....
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.... (Mohan sujatha) for the Personal hearing. The AR furnished additional submissions in the form of booklet containing the pictures of the products concerned with description, extracts of various legal provisions, rulings / orders in support of their stand, during the personal hearing. She explained in detail about the usage of the products in question and reiterated the submissions made in the original application, DISCUSSION AND FINDINGS: 7.1. We have carefully considered the submissions made by the applicant in tire advance ruling application and also the submissions made during the personal hearing. 7.2 The Applicant is before us seeking Advance ruling on the following questions;- (1) Whether the products viz. rope handle, vent plug and split top / bottom support, made from plastic which falls under headings 3901 to 3914, fall under HS code classification heading "3926" or "8507"? (2) What is the rate of tax. for the above said products under GST enactments. 7.3. We find that the applicant is engaged in the business of supply of plastic articles in different sizes used as parts of electric accumulators. The applicant! is now contemplating manufacture and supply of rope ha....
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....em, sub-heading, heading and chapter shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 and the rules of interpretation of the First Schedule to the Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall be applied for the interpretation and classification of goods. 7.5. We find that the applicant submits that the Heading "3926" is a more specific classification which also deals with the essential character of the products, i.e plastic and that the heading "8507" deals with electric accumulators only. We find that the applicant has based his contention on the General Rules of Interpretation of the Customs Tariff Act, 1975 (GRls), more particularly Rule 2 and Rule 3 of the said Rules and hence it is necessary to delve into the rules of interpretation of the First Schedule to the Customs Tariff Act, 1975. However before taking up the GRIs for discussion it is necessary to look into the terms of headings along with the subheadings of the two competing headings i.e. heading "3926" and heading "8507". The same is reproduced bel....
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....ot otherwise require, according to the following provisions : 2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this Rule), presented unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3. 3. When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which....
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....comparable. For the purposes of this Rule the relative Section and Chapter Notes also apply, unless the context otherwise requires. 7.7. We find that the application of the GRIs (1-4) should always be in sequential order he. Rule 1 is to be taken into consideration first. If classification is not covered by the provisions of Rule 1, then apply Rule 2, and so on. Now we take upon Rule 1 of the GIRs for discussion along with the two headings in competition. 7.8. From the perusal of the above rule we find that the classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes, Though on initial perusal of the terms of heading 3926 it appears that the impugned articles fall under the heading "3926" - Other articles of plastics and articles of other materials of headings 39.01 to 39.14, we find that1 by virtue of the Chapter Note 2 [s) to the 'Chapter-39 - Plastics and articles thereof of the Customs Tarff Act, 1975 the impugned articles are not classifiable under heading "3926" The Chapter Note 2 [s| to the 'Chapter-39 - Plastics and articles thereof of the Customs Tarff Act, 1975 provides as follows; Notes. 1...... 2. Th....
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....rs 73 to 76 and 78 to 82 (but not in heading 73.1 references to parts of goods do not include references to parts of general use as defined above. Subject to the preceding paragraph and to Note 1 to Chapter 83, the articles of Chapter 82 or 83 are excluded from Chapters 72 to 76 and 78 to 81. Hence on combined perusal of Section Note 1(g) to Section XVI and Section Note 2 to Section XV we find that the impugned articles are not excluded from Section XVI and are very much covered under Chapter 85. 7.12. Further the extracts of certain Section Notes, Chapter Notes and Subheadings which throw more light on the classification of impugned articles is reproduced below for ease of reference; * Section Note 2 of Section XVI of the CTA provides as follows; 3. Subject to Note 1 to this Section, Note 1 to Chapter 84 and Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 84.84, 85.44, 85.45, 85.46 or 85.47) are to be classified according to the following rules: (a) Parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 84.09, 84.31, 84.48, 84.66, 84.73, 84.87, 85.03, 85.22, 85.29, 85.38 and 85.48) are in all cas....
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....d articles i.e "Rope handle", "Vent plug" and "Split top /bottom support" merit classification under heading "8507" in terms of Rule 1 of the General Rules of Interpretation of the First Schedule to the Customs Tariff Act, 1975 (GRIs). As seen above though the impugned articles are all made of plastic by virtue of Chapter Note 2(s) to Chapter 39 the impugned articles are not covered under Chapter 39. Further the explanatory notes given under General content of Section XVI mentions that the goods of the said section can be of any material. In the instant case the impugned goods happen to be made of plastic. However, as the impugned plastic articles are used as parts of electric accumulators they are to be classified under the heading "8507"- Hence we are of the opinion that the impugned articles can be classified in terms or Rule 1 as even though the articles are not specifically described in the terms of the heading / subheading the classification is to be done as per the direction of the Section Notes or Chapter Notes. 7.14. We find that the applicant has based his arguments on Rule 2 and Rule 3 of the General Rules of Interpretation of the First Schedule to the Customs Tariff Ac....
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....ue of Chapter Note 2(s) to Chapter 39 the impugned articles are not covered under Chapter 39. Further the explanatory notes given under General content of Section XVI mentions that the goods of the said section can be of any material including plastics. Also Rule 3(b) of GRIs is also not applicable in the instant case as the same deals with mixed goods, composite goods and goods put up in sets for retail sale which cannot be classified by reference to 3(a). 7.16. Further the case laws submitted by the applicant i.e. 1) Commissioner of Customs Vs Shahnaz Commodities International P. Ltd (Madras High Court 2) Tamil Nadu Advance Ruling Order No. 10/AAR/2019 dated 27.02.2019 and 3) Appellate Authority for Advance Ruling, West Bengal Order No. 08/WBAAAR/APPEAL/2018 dated 31.01.2019 do not support the applicants contention as the classification of goods is governed by the principles set forth in the General Rules of Interpretation and the applicability of Section Notes / Heading Notes, In the instant case by virtue of Chapter Note 2(s) to Chapter 39 the impugned articles are not covered under Chapter 39, which is not the case for classifying the goods viz "Agricultural Seedling ....