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2019 (3) TMI 931 - AAR - GSTClassification of supply - supply of transport tank by mounting the same on chassis - whether amounts to tank classifiable under Heading 7311 or supply of motor vehicle classifiable under Heading 8704 in the GST regime? - Explanation (iii) and (iv) of the Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 - Held that - On going through the Chapter Notes of Chapter 87 of the First Schedule to the CTA, 1975, it is observed that there is no Chapter Note in the said Chapter analogous to Chapter Note 5 of Chapter 87 of the CETA, 1985. In absence of any Chapter Note in Chapter 87 of the CTA, 1975 analogous to Chapter Note 5 of Chapter 87 of the CETA, 1985, the Transport Tank , even if mounted or fitted on the Chassis of customer, would not fall under Chapter 87 of the CTA, 1985. Therefore, the product Transport Tank would have to be independently classified without having any bearing on the fact whether the same has been mounted or fitted on the Chassis of customer or otherwise. The product Container for compressed or liquefied gas, of iron or steel is specifically covered under Chapter Heading 7311 - the mounting process undertaken by it mainly involves bolting and the mounted Transport Tank can be easily de-mounted - the product Transport Tank mounted on chassis of customer is appropriately classifiable under Chapter Heading 7311 of the CTA, 1975.
Issues:
Classification of the product 'Transport Tank mounted on chassis of customer' under GST regime. Analysis: 1. The applicant contended that the activity of mounting body on the chassis was considered 'deemed manufacture' under the Central Excise Act, 1944, as per Section 2(f)(ii) of the CEA, 1944 read with Note 5 of Chapter 87 of the CETA, 1985. This position was based on the decision of the Supreme Court in the case of CCE, Mumbai Vs. Sadguru Auto Builders. The applicant classified the chassis mounted with a transport tank as a vehicle under Chapter 87 and discharged the applicable Excise duty liability accordingly. 2. With the introduction of GST laws, the taxable event of 'manufacture' was replaced by 'supply.' The applicant argued that under the Customs Tariff Act, 1975, each article is recognized independently regardless of any manufacturing activity. The applicant emphasized that they were only involved in the manufacture and supply of the transport tank, and the classification should be based on the tank itself, not the mode of supply. 3. The applicant sought an advance ruling on whether the supply of a transport tank by mounting it on a chassis should be classified as a 'tank' under Heading 7311 or a 'motor vehicle' under Heading 8704 in the GST regime. 4. The applicant highlighted that the transport tank, made of iron or steel and used for containing compressed or liquefied gas, should be classified under Heading 7311. The mounting process involved bolting the tank to the chassis for stability, which could be easily reversed, indicating the tank's primary function as a container. 5. Rule 3 of the 'Rules for Interpretation' was invoked by the applicant, stating that if an article could be classified under multiple headings, it should be classified under the most specific description. The applicant argued that the tank's essential character as a container for gas justified its classification under Heading 7311 rather than as a part of a motor vehicle under Heading 8708. 6. The Central GST & Customs Commissionerate opined that under the GST regime, classification would be based on what is being supplied, irrespective of any manufacturing activity. They classified the tank permanently mounted on a truck chassis as a motor vehicle under Chapter Heading 8704. 7. The Authority considered the submissions and noted the absence of a Chapter Note in the Customs Tariff Act, 1975 similar to Chapter Note 5 of the CETA, 1985. Consequently, the 'Transport Tank' was to be independently classified, leading to the conclusion that it should be classified under Chapter Heading 7311 as a 'Container for compressed or liquefied gas, of iron or steel.' 8. Therefore, the ruling was made that the product 'Transport Tank mounted on chassis of customer' supplied by the applicant is appropriately classifiable under Heading 7311 of the Customs Tariff Act, 1975.
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