TaxTMI 
TaxTMI 
2026 (9) TMI 1811
X X X X Extracts X X X X
X X X X Extracts X X X X
....CGST Act, 2017 and the RGST Act, 2017, this Advance Ruling pronounced under Chapter XVII of the Acts shall be binding only: (a) on the applicant who had sought it in respect of any matter referred to in Section 97(2) of the Acts; and (b) on the concerned officer or the jurisdictional officer in respect of the applicant. 3. In terms of Section 103(2) of the CGST Act, 2017 and the RGST Act, 2017, this Advance Ruling shall be binding unless the law, facts or circumstances supporting the original ruling have changed. 4. Under Section 104(1) of the CGST Act, 2017 and the RGST Act, 2017, where the Authority finds that the Advance Ruling has been obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab initio and thereupon all the provisions of the Acts or the Rules made thereunder shall apply to the applicant as if such Advance Ruling had never been made. 5. Any appeal against this Advance Ruling shall lie before the Appellate Authority for Advance Ruling, Rajasthan, in terms of Section 100 of the CGST Act, 2017 and the RGST Act, 2017. Such appeal shall be filed within....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (a) Rubberised Cork Sheet; or (b) Agglomerated Cork Sheet. The product is specifically designed and manufactured for industrial sealing and insulation applications and is recognized in trade and commerce as a cork-based engineered product. B. INTERPRETATION AND UNDERSTANDING OF APPLICANT ON QUESTION RAISED (IN BRIEF) Applicant submit the following with reference to above AAR, first of all applicant discuss the legal provision under which goods is classified under heading 4504 of the Customs Tariff Act, 1975, for the sake of clarity applicant is reproducing the relevant extract of heading no.4504 which is read as under: "4504 - Agglomerated Cork (with or without a binding substance) and articles of agglomerated cork." Relevant Tariff Item 45041010 covers: "Agglomerated Cork - Blocks, Plates, Sheets and Strips." The tariff itself recognizes that agglomerated cork may contain binding substances. Therefore, incorporation of rubber, polymer or other binding materials does not exclude a product from Heading 4504. PRINCIPLES OF CLASSIFICATION • It is a settled principle that classification is governed by the General Rules for I....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 09/2025-Central Tax (Rate) dated 17.09.2025 may not be available because cork originates from the bark of the Cork Oak Tree or this is applicable only natural cork sheet not for "Rubberised Cork Sheet" and "Agglomerated Cork Sheet". In other words, Department has the view that 5% GST is applicable on natural cork but applicant is manufacturing Rubberised Cork Sheet, Rubberised Cork Frame & Agglomerated Cork Strips using Polymer, Chemicals & Curatives, Processing Oil & Fillers @18% hence it is not remained natural CORK hence the HSN summary of 45041010 which is not applicable this case, the Chapter 45 is as under: Chapter-45 CORK AND ARTICLES OF CORK HSN Code Description of Goods Full Rate Noti No. Date 4501 Waste cork; crushed, granulated or ground cork (SI. No. 165 Sch. II) w.e.f. 22.09.2025 Also known As-crushed cork, granulated cork, groundcork, wastecork 18 09/2025 17/09/2025 4501 Natural cork, raw or simply prepared (SI. No. 307 Sch.I) w.e.f. 22.09.2025 Also known As - natural cork, raw or simply prepared 5 09/2025 17/09/2025 45020000 Natural cork, debacked or roughly squared, or in rectangular (including square) bl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arely falls within the scope of the aforesaid notification. - Consequently, GST at the rate of 5% (CGST 2.5% + SGST 2.5%) is correctly applicable. C. QUESTIONS ON WHICH THE ADVANCE RULING IS SOUGHT: Q1) Whether the product manufactured and supplied by the Applicant, namely "Rubberised Cork Sheet" / "Agglomerated Cork Sheet", is correctly classifiable under Tariff Item 45041010? Q2) Whether Rubberised Cork Sheet / Agglomerated Cork Sheet classifiable under Tariff Item 45041010 is covered under Sr. No. 310 of Schedule-I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025? Q3) Whether GST at the rate of 5% (CGST @ 2.5% and SGST @ 2.5%) is applicable on the said product? Q4) Whether the benefit of the said notification can be denied merely because outwards product is not natural cork or cork is not originates from the bark of the Cork Oak Tree? Q5) Whether the applicant is also eligible for refund under inverted duty structure benefit under section 54(3)(ii) of the RGST Act., 2017 which allows refund where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output suppli....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "GST Act". 2. We have gone through the application filed in FORM GST ARA-01 along with the annexures thereto, the comments of the jurisdictional officer received vide letter No. 149 dated 28.07.2026 and the submissions made by the Authorised representative at the time of personal hearing held on 30.07.2026. We now proceed to decide the questions on the basis of the material available on record. 3. The applicant, M/s Balasaria Agencies Pvt. Ltd., carrying on business in the trade name of M/s Pristine Technologies & Industries at Plot No. F-163 and 164, Industrial Area, Jhotwara Extension Second Phase, Sarnadoongar, Jaipur, Rajasthan-302012, is registered under the GST Act bearing GSTIN 08AACCB3334K2ZQ. The applicant manufactures and supplies Rubberised Cork Sheets, Agglomerated Cork Sheets, Rubberised Cork Frames and Agglomerated Cork Strips, which are used in sealing, gasketing, vibration control, thermal insulation and allied industrial engineering applications. As per the process flow chart and the statement of facts placed on record, the applicant procures cork granules, polymer/rubber, chemicals and curatives, processing oil and fillers; the raw material is inspected and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....decided in any proceedings in the case of an applicant under any of the provisions of the Act. In the grounds of advance ruling the applicant has stated that it had filed a refund claim under the inverted duty structure and that, during scrutiny of that refund, the department "verbally raised the doubt" that the rate of 5% under SI. No. 310 of Schedule-I ibid may not be available. No notice, order or other proceeding in which the question of classification has been raised or decided has, however, been placed before us. The applicant has declared at SI. No. 17 of FORM GST ARA-01 that the question raised is neither pending nor decided in any proceedings in its own case, and the jurisdictional officer has, in his comments dated 28.07.2026, categorically reported that there is no proceeding pending against the taxable person. On the material before us we, therefore, hold that the bar under the first proviso to Section 98(2) is not attracted in this case. 7. On merits, Question Nos. 1 to 4 raise, in substance, a single composite issue in three parts, namely, (i) the appropriate classification of the applicant's products under the First Schedule to the Customs Tariff Act, 1975; (ii) w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r or with any other binder. 9. Rule 1 of the General Rules for the Interpretation of the Harmonized System provides that, 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 Rules 2 to 6. The primacy of the terms of the heading is thus absolute, and recourse to the succeeding Rules arises only where the terms of the headings and the relative Notes leave the matter unresolved. Applying Rule 1, we find that the terms of heading 4504 themselves answer the description of the goods before us. The heading is not confined to cork agglomerated by itself. It reads "Agglomerated cork (with or without a binding substance) and articles of agglomerated cork". It prescribes no threshold - whether by weight, by volume or otherwise - for the proportion which the binding substance may bear to the cork, and it names no particular class of binder to the exclusion of others. 10. We further deal with the issue whether the "binding substance" spoken of in heading 4504 can be rubber. We hold that it can. The heading uses the words "a binding....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd articles of agglomerated cork). The notification has thus dealt with natural cork and with agglomerated cork by separate and distinct entries, and has prescribed for both the same rate of 2.5% central tax. To read SI. No. 310 as available only in respect of natural cork would render that entry futile. The botanical origin of the cork granule is wholly irrelevant to the enquiry; what matters is the description in the tariff heading and the identity of the finished goods as they are cleared. The question is accordingly answered. 13. For the reasons recorded above, we hold that Rubberised Cork Sheets / Agglomerated Cork Sheets manufactured and supplied by the applicant, being agglomerated cork with a binding substance and articles thereof, are classifiable under heading 4504 of the First Schedule to the Customs Tariff Act, 1975. As regards the appropriate eight-digit tariff item, we find that within heading 4504, sub-heading 4504 10 covers blocks, plates, sheets and strip, tiles of any shape and solid cylinders including discs, and comprises tariff item 4504 10 10 ("Sheets"), tariff item 4504 10 20 ("Slabs") and tariff item 4504 10 90 ("Other"); sub-heading 4504 90, comprising t....