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2024 (6) TMI 852 - CESTAT KOLKATAClassification of imported goods - Parts for Ball Pen Tips (Blank for Ball Pen Tips) NM6 Alloy 1.60MM 7.10MM - to be classified under the sub-heading 96089990 of the Customs Tariff Act or not - CBIC (TRU) vide Circular No. 113/32/2019- GST dated October 11, 2019 - HELD THAT - The appellant imported certain goods and declared them as 'Parts of Ball Point Pen Tips Blank Ball Pen Tips made of NM6 alloy' classifying the same under HSN 960899990 of the First Schedule of Customs Tariff Act, 1975, chargeable to Basic Customs Duty @5% under Notification 50/2017-Cus dated 30.06.2017. For the purpose of IGST, the appellant claimed benefit of Sl. No.232 of Notification 01/2017-Cus dated 28.06.2017. As per the Sl. No. 232 of the Schedule II of the Notification No. 01/2017, the appellant claimed IGST @12% for the goods imported. On examination of the goods imported by the appellant, the officers opined that the items imported are liable to pay IGST @18% as per Sl. No.453 of the Schedule III of the Notification 01/2017. Thus, the dispute in these appeals is with respect to eligibility of Sl. No. 232 of Notification No 1/2017-IGST(Rate) to the goods imported by the appellant. It is observed that CBIC Circular No. 113/32/2019-GST dated October 11, 2019 also supports this view. The said Circular clarifies the applicability of GST on the parts and accessories suitable for use solely or principally with a medical device. By the said Circular No. 113/32/2019-GST, it was clarified that same rate of GST would be applicable on the parts and accessories suitable for use solely or principally with a medical device as the rate of GST on the medical device and such parts would not be classified under residuary entry. It is observed that the impugned goods are suitable for use solely or principally with the ball point pens only, thus, should be classifiable with ball point pens. The impugned goods are eligible for availment of IGST @12% as provided under S.No. 232 of Schedule II under the IGST Goods Rate Notification 01/2017 dated 28.06.2017 - the demand of IGST confirmed in the impugned orders is not sustainable and hence the same is set aside. Since the demand of IGST is not sustained, fine and penalty imposed in the impugned orders is also set aside. The impugned orders are set aside - appeal allowed. Issues Involved:
1. Classification of imported goods and applicable IGST rate. 2. Applicability of specific entries vs. residuary entries in the IGST Goods Rate Notification. 3. Consideration of CBIC Circulars and GST Council decisions on classification and tax rates. Summary: 1. Classification of Imported Goods and Applicable IGST Rate: The appellant imported parts/tips of ball pens from China and classified them under HSN 960899990, claiming IGST @12% u/s Sl. No. 232 of Notification 01/2017-Cus dated 28.06.2017. The Department contended that the goods should be taxed at 18% u/s Sl. No. 453 of Schedule III of the same notification. The Show Cause Notices alleged that the items were parts of refills and should be classified under the residuary heading 96089990. 2. Applicability of Specific Entries vs. Residuary Entries in the IGST Goods Rate Notification: The Tribunal observed that Entry No. 232 specifically covers parts of pens, whereas Entry No. 453 is a residuary entry for goods not specified elsewhere. The classification of the imported goods as 'parts of ball point pens' under heading 9608 was accepted by the department. The Tribunal referred to the HSN Explanatory Notes, which state that identifiable parts of pens are covered under Heading 9608, and thus eligible for IGST @12%. 3. Consideration of CBIC Circulars and GST Council Decisions on Classification and Tax Rates: The appellant cited Circular No. 113/32/2019-GST and Circular No. 155/11/2021-GST, which clarified that parts suitable for use solely or principally with a specific device should be taxed at the same rate as the device. The Tribunal agreed, noting that these circulars support the classification of the imported goods under Heading 9608. The Tribunal also referred to the GST Council's decision that GST rates should generally be prescribed at the 4-digit HS Classification unless a carve-out is required. Conclusion: The Tribunal held that the impugned goods are parts of pens and eligible for IGST @12% u/s Sl. No. 232 of Schedule II under the IGST Goods Rate Notification 01/2017 dated 28.06.2017. The demand of IGST at 18%, along with the fine and penalty, was set aside. The appeals filed by the appellant were allowed.
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