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2021 (1) TMI 700 - AAR - GSTClassification of goods - Wheel Side Protection Control Unit (WSP) and Pantograph - to be classified as parts of railway or tramway locomotives or rolling stock, and parts thereof (Viz under Heading 8607) for the purposes of levy of GST or otherwise - Section 9(1) of Central Goods and Services Act 2017 read with notification no.01/2017-Central Tax (Rate) dated 28.06.2017. Admissibility of the application under Section 97/98 of the CGST Act - HELD THAT - The question raised is on the classification of the product supplied by the applicant and therefore covered under Section 97 (2) of the Act. Section 98 of the CGST Act 2017/TNGST Act 2017 provides the procedure to be followed on receipt of the application and the first proviso to Section 98(2) states that the application is not to be admitted when the question raised in the application is already pending or decided in any proceedings in the applicant s case - In the case at hand, it is found that DGGSTI has submitted that the classification of the products supplied by the applicant to railways are under investigations and the investigations have been initiated through the summon dated 10.10.2018. It is the submission of DGGSTI, HRU Hosur that the question raised before this authority is part of the investigation and therefore the application do not merit admission. The first proviso to Section 98(2) makes an application ineligible for admission if the Authority finds that the question raised in the application is already pending or decided in any proceedings in the case of the applicant under any provisions of this Act. Issuance of summon under Section 70 of the CGST Act 2017 and calling for definite particulars happens in the course of investigation. We find that the only contention of the applicant is the summon is generic in nature and the subject goods whose classification is sought before us was never part of the proceedings. The applicant has classified Pantograph under CTH 8607 and continues to do so while in respect of certain other products, they have re-classified and paid the differential taxes. The month-wise value in respect of Pantograph has been furnished by the applicant to DGGSTI Hosur. Show Cause Notice No.02/2020 dated 18.06.2020, Corrigendum issued to the SCN dated 27.10.2020 seek the differential excise duty payable and the proceedings for the period from 01.07.2017 remains pending. DGGSTI, Hosur letter dated 23.11.2020 has categorically stated that the investigation is specific for the classification of goods for railways and covers all goods supplied by the applicant to railways under Chapter Heading 8607 and in respect of subject goods, it is stated that WSP was not in the list of products prior to GST and the spares for WSP was re-classified by the applicant from CETH 8607 to CETH 9032; while in respect of Pantograph , the investigation included the same and re-classification of the same for pre-GST period is issued through corrigendum dated 27.10.2020 - it is clear that DGGSTI has taken up investigations on the classifications adopted by the applicant on their supplies to Indian Railways and classified under CTH 8607. The subject goods are supplied to Indian Railways and the applicant classify the same under CTH 8607. The application is filed on 20.01.2020 while the proceedings on the Classification of the goods supplied to Indian Railways and the rate adopted for payment of GST were initiated through summon dated 10.10.2018. Also from the list of parts given to the DGGSTI by the applicant, it is seen that details relating to Pantograph and Parts is also furnished. The applicant claims that the DGGSTI did not contend the classification of Pantograph and therefore the said goods were never a part of the investigation. The first proviso to Section 98(2) of the Act, states that where the question raised is pending or decided in any proceedings under this Act, the same is not eligible for admission before this authority. The investigation initiated by DGGSTI in the case of applicant is on the classification and rate of GST adopted by the applicant on the supplies to Indian Railways, classifying under CTH 8607. It is without doubt that the applicant has been classifying the subject goods under CTH 8607 and the supplies are made to Indian Railways and therefore we are unable to agree the contention that the investigation is generic , while we find the investigation is on the class of products classified under CTH 8607 and supplied to Indian Railways .
Issues Involved:
1. Classification of Wheel Side Protection Control Unit (WSP) and Pantograph under GST. 2. Admissibility of the application for advance ruling under Section 98 of the CGST Act 2017. Detailed Analysis: 1. Classification of Wheel Side Protection Control Unit (WSP) and Pantograph: The applicant, involved in manufacturing and supplying railway equipment, sought an advance ruling on whether WSP and Pantograph should be classified under Heading 8607 as "parts of railway or tramway locomotives or rolling stock" for GST purposes. They argued that WSP ensures safe braking by preventing axle skidding, while Pantograph collects electric current for locomotives. Both items are designed exclusively for railway use and cannot function independently or with other modes of transport. The applicant referenced several legal precedents and circulars supporting their classification under Heading 8607, emphasizing that these goods are integral to railway operations and meet the criteria specified in Chapter 86 of the Customs Tariff Act. 2. Admissibility of the Application: The Authority for Advance Ruling (AAR) examined the admissibility of the application under Section 98 of the CGST Act. The first proviso to Section 98(2) states that an application should not be admitted if the question raised is already pending or decided in any proceedings under the Act. The Directorate General of GST Intelligence (DGGSTI) initiated an investigation against the applicant concerning the classification of products supplied to railways under Heading 8607. Summons were issued on 10.10.2018, requesting details on the classification and GST rates of products supplied to Indian Railways. The applicant contended that the investigation was generic and did not specifically address WSP and Pantograph. However, the AAR found that the investigation included all products classified under Heading 8607, including Pantograph, and was initiated before the application for advance ruling was filed. Conclusion: The AAR concluded that the investigation by DGGSTI on the classification of goods supplied to railways, including Pantograph, was ongoing and covered the period from 01.07.2017. Therefore, the question raised in the application was part of the pending investigation, making the application ineligible for admission under the first proviso to Section 98(2) of the CGST Act. Consequently, the application for advance ruling was not admitted.
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