AI Drafter 
TaxTMI 
TaxTMI 
2025 (5) TMI 983
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.... The issue raised by M/s NEEL KAMAL GERA, 0, Exhibition Road Kumher Gate, BHARATPUR-321001, Rajasthan (hereinafter "the applicant") is fit to pronounce advance ruling as they have deposited prescribed Fee under CGST Act and it falls under the ambit of the Section 97 (2) given as under: A. SUBMISSION OF THE APPLICANT (in brief) :- Brief facts of the case : • That the Applicant is the holder of GST Registration and is inter-alia engaged in manufacturing of "Blades" cleared as "Spare Parts" for being used in Agricultural Machines, viz., Chaff Cutters Machine which is used for Cutting Straw used for Feeding Animals. B. INTERPRETATION AND UNDERSTANDING OF APPLICANT ON QUESTION RAISED (IN BRIEF) That from the very onset the bona fide, the Applicant is clearing the "Blades" as aforementioned under HSN Heading 8208 40 00 thereby collecting and discharging the burden of GST @ 18%. The precise text of the HSN Heading 8208 40 00 is reproduced as under: 8208 Knives and cutting blades, for machines or for mechanical appliances 8208 10 00 - 8208 20 00 - 8208 30 00 - 8208 40 00 - For agricultural, horticultural or forestry machines 8208 9....
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....nished (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. Rules 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 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....
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....n XVI cannot be invoked for classification in terms of Note 1(k) to Section XVI. The Explanatory Notes of HSN also support the classification of blades under Heading 82.08. The relevant Para-4, 5, 6 and 7 of the judgment are reiterated herein below: Para 4 is We have considered the submissions of both the sides. The rival Tariff Headings read as under: "82.08 - Knives and cutting blades for machines or for mechanical appliances 8208.40 - For agricultural, horticultural or forestry machines 84.36 - Other agricultural horticultural, forestry, poultry, grain or dried leguminous vegetables; machinery used in the milling industry or for the working of cereals or dried leguminous vegetables; other than farm-type machinery" Para 5 is It is not in dispute that impugned goods Chaff Cutter Blade is a blade for agriculture machine Chaff Cutter. Such a blade is specifically covered by sub-heading 8208.40 of the Central Excise Tariff. According to Rule 1 of the Interpretative Rules "classification shall be determined according to the terms of the heading and any relative Section or Chapter Notes". Thus, applying Rule 1, the impugned goods ar....
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....mitted foregoing, the judgment with utmost precision has been pronounced by the Hon'ble CESTAT very categorically, in line withthe Explanatory Notes of HSN and the Hon'ble Supreme Court's directions on the tariff classification of goods in the case of DUNLOP INDIA LTD. &MADRAS RUBBER FACTORY LTD (Supra) that, "When an article is by all standards classifiable under a specific item in the Tariff Schedule it would be against the very principle of classification to deny it the parentage and consign its residuary item." (vi) That on the trade / business enquiries undertaken in premise of the objections raised by our valued customers and consumers protesting the discharging tax liability at an higher rate i.e. @ 18% as against 12% in the neighboring states, we came across an Adjudication Order No. AGA-EXCUS-000-COM-12-2023-24 dated 28-07-2023 passed by the Learned Commissioner CGST & Central Excise, Agra vide DIN-20230753ZX000000D6BE wherein the Hon'ble Adjudicating Authority placing reliance the upon the principles of interpretation enumerated by the Hon'ble Supreme Court's in Westinghouse Saxby Farmer Ltd. Versus Commissioner of C. Ex., Calcutta reporte....
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....cific exclusion is put in clear terms, as has been done vide Note 2 of Section XVII. Therefore, parts of Chaff Cutter Machine are not excluded from Section XVI and are correctly classifiable and the Chapter 84 of Central Excise Act, 1985. it may please be noted that Rule 3(a) of the General Rules of Interpretation of the tariff also provide that the heading which provides the most specific description shall be preferred to headings providing a more general description. This principle was endorsed by the Apex Court in the cases of Speedway Rubber Co. versus CCE Chandigarh reported in 2002 (143) E.L.T 8 (Supreme Court) and Forbes Gokak Ltd versus CCE Aurangabad reported in 2003(153) E.L.T 24 (Supreme Court). C. On bare reading of the description of Tariff Heading No. 8208 40 00, it is apparent that it covers the goods viz., Knives and cutting blades for machines or for mechanical appliances generally for agriculture horticulture or forestry machines purpose. Whereas Tariff Heading No. 8436 10 00 covers the goods viz., other agriculture, horticulture, forestry, poultry-keeping or bee-keeping machinery, including germination plant fitted with mechanical or thermal equipments poultry....
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....er Machine, are required to be classified along with the Chaff Cutter Machine only. D. It may further be noticed that Rule 3(c) of interpretive Rules provides that when good cannot be classified by reference of Clause (a) and (b) of Rule 3 the good shall be classified under the heading which occurs last in the numerical order among those which equally merits consideration. Your good self may please appreciate that from the provisions and description of tariff items relevant to the goods in question as discussed here in above there is no denying that in terms will rule 3(a) of the interpretative rules the headings which provide the most specific description shall be preferred to heading providing a more general description. In terms with rule 3(c) when goods cannot be classified by reference to clauses (a) and (b) of rule 3 the good shall be classified under the heading which occurs last in the numerical order among those which equally merits consideration, therefore, in premise of Rule 3(a) or Rule 3(c), the goods in question merits classification under Tariff Heading no. 8436 10 00 in preference to Tariff Heading No. 8208 40 00. There is no denying that Tariff Heading No. 84....
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....ials by adducing proper evidence. Unfortunately, no such attempt was made. As stated, the evidence led in this case conclusively goes to show that Nylon Twine manufactured by the assessees has been treated as a kind of Nylon Yarn by the people conversant with the trade. It is commonly considered as Nylon Yarn. Hence, it is to be classified under Item 18 of the Act. The Revenue has failed to establish the contrary. We would do well to remember the guidelines laid down by this Court in Dunlop India Ltd. v. Union of India [1983 (13) E.L.T. 1566 (SC) = (AIR 1977 SC 597 - at page 607)], in such a situation, wherein it was stated :- ". When an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause." (Emphasis supplied) Para 16 is We concur with the reasoning and conclusion of the High Court. Attention is further invited to the Apex Court judgment in the case of Westinghouse Saxby Farmer Ltd. Versus Commissioner of C. Ex., Calcutta reported in 2021 (376) E.....
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....the railway signaling equipment. But all the Authorities were of the unanimous view that this product is referable to goods of a specific description in Chapter sub-heading 8536.90 and that, therefore, General Rule 3(a) will apply. Para 31 is But in invoking General Rule 3(a), the Authorities have omitted to take note of 2 things. They are : (i) that as laid down by this Court in Commissioner of Central Excise v. Simplex Mills Co. Ltd. [(2005) 3 SCC 51 = 2005 (181) E.L.T. 345 (S.C.)] the General Rules of Interpretation will come into play, as mandated in Rule 1 itself, only when no clear picture emerges from the terms of the Headings and the relevant section or chapter notes; and (ii) that in any case, Rule 3 of the General Rules can be invoked only when a particular goods is classifiable under two or more Headings, either by application of Rule 2(b) or for any other reason. Once the authorities have concluded that by virtue of Note 2 (f) of Section XVII, 'relays' manufactured by the appellant are not even classifiable under Chapter Heading 8608, we do not know how the Authorities could fall back upon Rule 3(a) of the General Rules. There....
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....an article in Chapter 86 cannot be taken to a different Chapter as the same would negate the very object of group classification. This is made clear by Note 3. Para 37 is It is conceded by the Revenue that the relays manufactured by the appellant are used solely as part of the railway signaling/traffic control equipment. Therefore, the invocation of Note 2 (f) in Section XVII, overlooking the "sole or principal user test" indicated in Note 3, is not justified. Para 38 is On the question as to what test would be appropriate in a given case, this court pointed out in A. Nagaraju Bros. v. State of A.P. [1994 Supp (3) SCC 122 = 1994 (72) E.L.T. 801 (S.C.)], as follows : "there is no one single universal test in these matters. The several decided cases drive home this truth quite eloquently. It is for this reason probably that the common parlance test or commercial usage test, as it is called, is treated as the more appropriate test, though not the only one. There may be cases, particularly in the case of new products, where this test may not be appropriate. In such cases, other tests like the test of predominance, either by weight of value o....
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....reiterated the submission already made by them. F. DISCUSSIONS AND FINDINGS 1). We have carefully examined the statement of facts, contents of the application filed by the applicant, submissions made at the time of hearing and the comments of the jurisdictional Tax Authority. We have also considered the issue involved, on which advance ruling is sought by the applicant and other relevant facts. 2) The applicant, M/s NEEL KAMAL GERA, Exhibition Road Kumher Gate, BHARATPUR-321001, Rajasthan is registered with the GST department and is inter-alia engaged in manufacturing of "Blades" cleared as "Spare Parts" for being used in Agricultural Machines, viz., Chaff Cutters Machine which is used for Cutting Straw used for Feeding Animalsand clearing the same under CTH 82084000 of the Tariff Act' ibid with GST @18%. 3) The present application has been filed by the applicant seeking HSN Classification of "Blades" cleared as "Spare Parts" for being used in Agricultural Machines, viz., Chaff Cutters which is meant and used for Cutting Straw for preparing Animal Feed. 4) We also found that the taxpayer has submitted that many manufacturers in the other states are clearing these....