2025 (3) TMI 1291 - AAAR - GST

Classification of goods - Rate of SGST and CGST applicable - Aluminium Composite Panel/Sheet - covered under HSN 3920 or HSN 7610 or HSN 7606? - HELD THAT - It has been brought out that the rates of GST are specified as per tariff item sub-heading heading and chapter mentioned in the schedules to the relevant notifications which are as specified in the First Schedule to the Customs Tariff Act 1975. It is also specified that the rules of interpretation of the First Schedule to the Customs Tariff Act shall also apply to the interpretation of these notifications. In this light the Central Member has applied Rule 3(b) of the General Rules for Interpretation of Tariff to hold that the subject goods would fall under Chapter 76 since essential character in respect of the ACPs is given by Aluminum. The Central Member has thereafter ruled out the contending Heading 7610 as the subject goods are not Aluminum structures and parts of structures. Thereafter following the decision of CESTAT in the case of Commissioner of Customs (Imports) Chennai Vs ICP India Pvt. Ltd. 2018 (7) TMI 546 - CESTAT CHENNAI the Central Member has held the goods to be classifiable under Heading 7606. Conclusion - The Aluminium Composite Panel/Sheet is classified under HSN 7606 and the applicable tax rate is determined to be 18%.

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment were:

Whether Aluminium Composite Panel/Sheet is covered under HSN 3920, HSN 7606, or HSN 7610.
The applicable rate of SGST and CGST for the Aluminium Composite Panel/Sheet.

ISSUE-WISE DETAILED ANALYSIS

Classification of Aluminium Composite Panel/Sheet

Relevant legal framework and precedents: The classification of goods under the GST regime is guided by the Customs Tariff Act, 1975, and the rules for interpretation of tariff. Specifically, Rule 3(b) of the General Rules for Interpretation of the Customs Import Tariff Schedule was pertinent to this case. Additionally, previous rulings by CESTAT and other AARs were considered.
Court's interpretation and reasoning: The Appellate Authority examined the differing opinions of the State and Central Members of the AAR. The Central Member classified the Aluminium Composite Panel/Sheet under HSN 7606, reasoning that the essential character of the product is given by the aluminium sheets. The State Member did not provide a specific classification but indicated that the product could not be classified solely as plastic or aluminium.
Key evidence and findings: The Central Member's decision was supported by the application of Rule 3(b) and previous case law, notably the CESTAT decision in Commissioner of Customs (Imports) Chennai Vs ICP India Pvt. Ltd., which classified similar products under Heading 7606.
Application of law to facts: The Central Member applied the rules of interpretation to determine that the essential character of the Aluminium Composite Panel/Sheet is derived from the aluminium, thus warranting classification under HSN 7606.
Treatment of competing arguments: The Appellate Authority considered the State Member's view but found the Central Member's detailed analysis and reliance on established legal precedents more persuasive.
Conclusions: The Appellate Authority upheld the Central Member's classification of the Aluminium Composite Panel/Sheet under HSN 7606.

Applicable Rate of SGST and CGST

Relevant legal framework and precedents: The applicable tax rates are determined by the notifications issued under the GST Act, which specify rates based on the classification of goods.
Court's interpretation and reasoning: Both the State and Central Members agreed on the tax rate, indicating a uniform interpretation despite differing opinions on classification.
Key evidence and findings: The Appellate Authority noted the consensus between the Members regarding the tax rate of 18% (9% SGST + 9% CGST).
Application of law to facts: The classification under HSN 7606 aligns with the specified tax rate in the relevant GST notifications.
Conclusions: The applicable SGST and CGST rates for the Aluminium Composite Panel/Sheet were confirmed as 9% each, totaling 18%.

SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: The Appellate Authority noted, "The Central Member has applied Rule 3(b) of the General Rules for Interpretation of Tariff to hold that the subject goods would fall under Chapter 76, since essential character in respect of the ACPs is given by Aluminum."
Core principles established: The essential character of a composite product determines its classification under the GST regime, as guided by the rules of interpretation and relevant case law.
Final determinations on each issue: The Aluminium Composite Panel/Sheet was classified under HSN 7606, and the applicable tax rate was determined to be 18% (9% SGST + 9% CGST).

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