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2021 (4) TMI 508 - AAR - GSTClassification of goods - rate of GST - parboiling and drier plant - part of rice milling machinery as specified in the Notification dated 28-06-2017 or not - to be classified under HSN 8437 or under HSN 8419? - HELD THAT - As there was conflicting judgments on the issue in the case of J JYOTI SALES CORPORATION VERSUS COMMISSIONER OF C. EX., PANCHKULA 2011 (3) TMI 1317 - CESTAT, NEW DELHI classifying par-boiling machine and dryer under 8419 of Central Excise Tariff and in the case of SKF BOILERS DRIERS (P) LTD. VERSUS COMMISSIONER OF C. EX., MANGALORE 2010 (10) TMI 230 - CESTAT, BANGALORE classifying the same machines under 8437, the Hon'ble President of CESTAT constituted a Larger Bench as per the directions of the Hon'ble Supreme Court in JYOTI SALES CORPORATION VERSUS COMMISSIONER OF CENTRAL EXCISE, PANCHKULA 2016 (2) TMI 973 - SUPREME COURT to resolve this conflict and to decide the appropriate classification of the par boiling machine and drier. The Hon'ble Tribunal Larger Bench judgment in the case of M/S JYOTI SALES CORPORATION, M/S PUNJAB FABRICATOR VERSUS CCE, PANCHKULA 2016 (11) TMI 767 - CESTAT CHANDIGARH held that par boiling machine and dryer is classifiable under Heading 8419 of the Central Excise Tariff and there being on stay on the order by the Apex Court which is also in conformity with the Board's Circular No.982/06/2014-CX, dated 15-05-2014 issued in F.No.167/42/2009-CX.1, we observe that the goods under reference merits classification under 8419 attracting 9% CGST and 9% SGST.
Issues Involved:
1. Classification of parboiling and drier plant under HSN 8437 or HSN 8419. 2. Applicable GST rate for parboiling and drier plant. Issue-wise Detailed Analysis: 1. Classification of Parboiling and Drier Plant: The applicant, a manufacturer of parboiling and drier plants for the rice milling industry, sought clarity on whether their product falls under HSN 8437, which pertains to machinery used in the milling industry, or HSN 8419, which covers machinery for the treatment of materials involving a change of temperature. The applicant argued that the parboiling and drier plant should be classified under HSN 8437, citing that it is used in conjunction with rice milling machinery and performs functions integral to rice milling. They referenced CBEC Circular No.924/14/2010, which initially classified such machinery under HSN 8437. However, subsequent decisions and circulars, including Circular No.982/06/2014, reclassified these machines under HSN 8419 based on Note 2 to Chapter 84 of the GST Tariff. The applicant also cited various tribunal decisions, including SKF Boilers and Driers Pvt. Ltd. and Jyoti Sales Corporation, which had conflicting rulings on the classification. The Larger Bench of the Tribunal, resolving this conflict, classified the parboiling and drier plant under HSN 8419, a decision that was appealed but not stayed by the Supreme Court. 2. Applicable GST Rate for Parboiling and Drier Plant: Given the classification under HSN 8419, the applicable GST rate is determined by the relevant notifications. The applicant referred to Notification No.1/2017-Central Tax (Rate) dated 28-06-2017 and its amendment, which specifies the GST rates for various goods. Findings and Discussion: The Authority for Advance Ruling examined the submissions and relevant legal provisions, including the CGST Act, KGST Act, and the GST Tariff. They acknowledged the conflicting tribunal decisions and the subsequent resolution by the Larger Bench, which classified the parboiling and drier plant under HSN 8419. The Authority noted that the classification under HSN 8419 aligns with the Board's Circular No.982/06/2014 and the Larger Bench's decision, which remains operative in the absence of a stay by the Supreme Court. Ruling: The Authority ruled that the parboiling and drying plant is classified under HSN 8419, Entry No.320, and is subject to an 18% GST rate (9% CGST + 9% SGST) as per Notification No.01/2017-Central Tax (Rate) dated 28-06-2017, as amended by Notification No.41/2017-Central Tax (Rate) dated 14-11-2017.
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