TaxTMI 
TaxTMI 
2024 (8) TMI 642
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....ession of material facts or misrepresentation of facts, 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....
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.... said items in a tabular form and the same is reproduced below; Product Raw Material Process Use Rope Handle 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 ....
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.... (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 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 ....
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....s principle finds its origins in the Latin maxim of generatiaspecialibus non derogant ie. general law yields to special law should they operate in the same field on same subject The maxim generaliaspecialibus 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 qualific....
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....d as plastic articles than parts or accessories of lead acid battery. The Applicant further relied on the judgment of the Hon'ble Supreme Court in the case of Commissioner of Customs & Central Excise v. M/s. D.L Stools in Civil Appeal Nos. 2360-2376 OF 2009, 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 tra....
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....s; • In order to determine the classification of the products "Rope handle, vent plug and split top/bottom support, made from plastic" which are used in the manufacture of Electric Accumulators/Batteries, the relevant Section notes of Section XVI & Chapter notes to Chapter Heading 39 and 85 as appearing 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....
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.... No. 139 of Schedule IV of Notification No. 1/2017-CT (Rate) dated 28.06.2017 as amended as the items supplied by the applicant will fall under HSN 8507 as "Electric accumulators, including separators therefore, whether or not rectangular (including square]". 6. The Applicant, was given an opportunity to be heard in person on 27,03.2024. M/s Harini S.P, Advocate appeared as the Authorised Representative (AR) in respect of V.M polymers (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 p....
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.... other simitar 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. 8) The "vent plug" to be manufactured by the Applicant can not only be used for transportation but also few customers would use it as a regular vent plug, 7.4. We find that in terms of explanation (iii) and (iv) to Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017, tariff item, 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 ....
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....n the instant case it is imperative to look into the General Rules of Interpretation of the Customs Tariff Act, 1975 (GIRs) of the first schedule for placing the article/articles under the right classification. The said rules are reproduced below for ease of reference; Classification of goods in the Nomenclature shall be governed by the following principles : 1. The titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not 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 re....
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....er, apply to containers which give the whole its essential character; (b) Subject to the provisions of Rule 5 (a) above, packing materials and packing containers presented with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use. 6. For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related Subheading Notes and, mutatis mutandis, to the above Rules, on the understanding that only subheadings at the same level are 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. Fro....
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....ral use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39); 7.11. On perusal of Note 1 to Section XVI of the CTA it becomes imperative to look into the Definitions of parts of general use as defined in Note 2 to Section XV - Base Metals And Articles Of Base Metal-of the CTA. The same is reproduced below; 2.- Throughout the Nomenclature, the expression" parts of general use" means: (a) Articles of heading 73.07, 73.12, 73.15, 73.17 or 73.18 and similar articles of other base metals; (b) Springs and leaves for springs, of base metal, other than clock or watch springs (heading 91.14); and (c) Articles of headings 83.01, 83.02, 83.08, 83.10 and frames and mirrors, of base metal, of heading 83.06. In Chapters 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 ....
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....n which they are to be used." • Heading Notes to Heading 8507 PARTS Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), the heading also covers parts of accumulators, e.g., containers and covers; lead plates and grids, whether or not coated with paste; separators of any material (except of unhardened vulcanised rubber or of textile material), including those in the form of fiat plates merely cut into rectangles (including squares), meeting very precise technical specifications (porosity, dimensions, etc.) and hence ready for use. The heading does not cover : (a) Terminals (heading 85.36). (b) Spent electric accumulators and waste and scrap thereof (heading 85.48). 7.13. From the foregoing discussion and perusal of the relevant Section Notes, Chapter Notes and Explanatory Notes we find that the impugned 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....
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....er to parts or accessories of electric accumulators, that too, plastic parts. If Rule 3 (a) is also not applicable, Rule 3 (b) states that the goods must be classified as per the materials which provide the essential character" In this regard we find that Rule 3 provides for the classification of goods that are prima facie classifiable under two or more headings which is also not the case on hand. Rule 3(a) provides that goods should be classified in the heading that provides the most specific description and in this regard the applicant has submitted that "heading "3926"- Plastics and articles thereof is a more specific description and 8507" merely states "electric accumulators, including separators thereof whether or not rectangular (including square)" and does not even refer to parts or accessories of electric accumulators, that too, plastic parts." We reiterate that the 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 including plastics....