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TMI Blog2018 (5) TMI 699X X X X Extracts X X X X X X X X Extracts X X X X ..... o verify what duty these companies were paying in pre-GST. The product introduced by the appellant is with electric battery whereas the simple meaning of "cycle" is a pedal driven, human powered, single track vehicle, having two wheels attached to a frame, one behind the other - the e-rickshaw is not within the sweep of the word "bicycles" or "cycle Rickshaw" and also does not appear to be in consonance with the legislative intent. When legislature has classified the product and put them under a different entries Entry 160 of schedule-I and Entry-46 of schedule-IV and being capable to be understood in common parlance as a different commercial commodity, the basis of the classification is not open to question. Moreover, the schedule entry 46 is very specific in nature and is considered for all pneumatic tyres, of rubber. The schedule entry is provided with the exclusion clause. Ruling:- The product is classified and covered by Tariff Heading 4011 and the rate of tax shall be at the rate of 14 percent under MGST ACT, 2017 and 14 percent under CGST ACT, 2017. - GST-ARA-07/2017/B-10 - - - Dated:- 9-3-2018 - Shri. B. V. Borhade, Joint Commissioner of state tax and Shri. Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds as under: Sch. SI. NO. Chapter Heading/ Sub-Heading Description of goods Rate of Tax (CGST) I. 190. 4011,4013 Pneumatic tyres or inner tubes, of rubber, of a kind used on / in bicycles, cycle -rickshaws and three wheeled powered cycle rickshaws 2.5% IV. 46. 4011 New pneumatic tyres, of rubber [other than of a kind used on/in bicycles, cycle-rickshaws and three wheeled powered cycle rickshaws; and Rear Tractor tyres; and of a kind used on aircraft] 14% 6. The present ambiguity regarding the product in question is due to the lack of reference to the term ' e-rickshaw tyre' in both, Customs Tariff and GST Rate Schedules. SI. No. 190 of Schedule-I to Notification No.1-Central Tax (Rate) covers Chapter Heading No. 4011 (and 4013) for 'Pneumatic tyres or inner tubes, Of rubber, of a kind used on / in bicycles, cycle rickshaws an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ple to e-rickshaws, it is submitted, that e-rickshaws should be treated as similar to three-wheeled powered cycle rickshaws in law and clubbed with the same for the purpose of taxation under GST. 10. The lack of mention of 'tyres used in e-rickshaws' along with three-wheeled powered cycle rickshaws in Sl. No. 190 of Schedule-I to Notification No. 1-Central Tax (Rate) gives rise to the ambiguity that whether the product in question shall be perceived to be covered under Schedule I or Schedule IV of Notification No. 1-Central Tax (Rate). This further gives rise to the ambiguity regarding applicability of GST @ 5% or 28% on the product in question which is an effective tax differential of 23%. 03. The legal submission of applicant:- A.1 That the sub-section (c) of Section 95 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act ), defines the term 'applicant' as under:- applicant means any person registered or desirous of obtaining registration under this Act Emphasis Supplied A.2 A perusal of the above clarifies that scope of the term 'applicant', as defined under subsection (c) of Section 95 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) The question on which the advance ruling is sought under this Act, shall be in respect of, - (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is required to be registered; (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. Emphasis Supplied A.8 In view of the above, it is submitted that advance ruling may be sought by the Applicant on the questions concerning classification of goods or services or both, on the question involving determination if any thing done by the applicant with respect to a goods or services or both amounts to or results in a supply of goods or services or both. The Applicant submits that the questions for determination in the ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion before the Maharashtra Authority for Advance Ruling, Mumbai, appointed vide Notification No. MGST-1017/CR 193/Taxation, dated 24.10.2017 read with Section 99 of Maharashtra Goods and Service Tax Act, 2017. 4. We find that jurisdictional officer has made written submission which are as under :- The dealer has applied for advance ruling for the issue of classification of commodity. The dealer is dealing in the commodity tyres of kind used in three wheeled electric rickshaws which is specially manufactured to be used in modern day electric rickshaws. The dealer has been clearing goods under chapter heading-4011. While going through chapter heading 4011 in the customs act (which is quoted above) it mentions new pneumatic tyres of rubber. The word rickshaw's origins lie in the Japanese language, and it literally translates to a human powered vehicle . The rickshaw is one of the oldest modes of transport, and was first introduced in the late 19th century. It is used all across the world, but more common in the Asian countries, especially in India and Bangladesh. The various types of rickshaws have also evolved over time with the earliest ones being the pulled-ricksh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r's contention to consider three wheeled powered cycle rickshaws as three wheeled electric rickshaws based on the principle of Ejusdem generis cannot be accepted because three wheeled powered cycle rickshaws are different than electric rickshaws. Cycled rickshaws were first driven manually. To carry more loads and reduce burden on the person who rides it manually power was added to it. This means three wheeled power cycled rickshaws is up gradation of cycled rickshaws. The dealer who is requesting for levy of tax 2.5% was earlier charging the same goods at an aggregate pre-GST tax of around 12.5% As per Notification No. 1/2017-Central Tax (Rate) dated 28th June, 2017, three wheeled powered cycle rickshaws are mentioned along with bicycles, rickshaws. The Electric Motor Vehicle Three Wheeled (commonly known as E-Rickshaw) are completely different from three wheeled powered cycle rickshaws . While the tyres/tubes of the former are liable to be taxed at 14% and that of the latter are chargeable @ just 2.5%. It appears that Electric Motor Vehicle Three Wheeled Tyres and Tubes are tried to be classified as Tyres and Tubes of 'Three Wheeled Powered Cycle Ricksha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;powered cycle rickshaw' in the explanation to the notification number 102/76 dated 16-3-1976 as follows: Explanation.- The expression term 'powered Cycle' or 'Powered Cycle Rickshaw' means a mechanically propelled cycle or as the case may be mechanically propelled cycle rickshaw, which may also be paddled, if any necessity arises for so doing . Further, the meaning of Powered Cycle Rickshaw was clearly explained in the case of Delhi Kinetic Engineering Ltd. vs Collector of Central Excise and upheld by Supreme Court bench on 21.03.1996 and reported in 1997 (94) ELT A157(SC) = 1996 (3) TMI 555 - SUPREME COURT . Therefore, It is settled that Powered Cycle Rickshaw referred to in the Explanation would not cover an Auto Rickshaw and would only cover an ordinary Cycle Rickshaw to which a motor or petrol engine has been fitted. The next question is, why Three Wheeled Electric Vehicle (E-Rickshaw) is not a Powered Cycle Rickshaw? Because - a) It is not a Cycle Rickshaw. b) It does not have pedal which is pre-requisite for Powered Cycle Rickshaw and it cannot be peddled, if any necessity arises for so doing. c) It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IV. 5.2 a) Three Wheeled Electric Motor Vehicle (known as E-Rickshaw in market) is a Motor Vehicle in Motor Vehicle Act also. It has to be registered with State Transport Authorities as a Motor Vehicle. Tyres and Tubes used in these Vehicles are Automobile Tyres and Tubes of size 300-12, 300-14, 90-90/12 and 3.75-12, which are duly prescribed as Automobile Tyres in Bureau of Indian Standards for Two and Three Wheeled Motor Vehicles IS 15627:2005 .By no means the Tyres and Tubes cleared by them are Tyres and Tubes of Three Wheeled Powered Cycle Rickshaw. b) The SSI exemption notification no. 8/2003-Central Excise dated 1st March, 2003 defines the powered cycle rickshaw as under: Powered cycle or powered cycle rickshaw means a mechanically propelled cycle or as the case may be mechanically propelled cycle rickshaw, which may also be pedalled if any necessity arises for so doing c) It clearly shows that the Tyres cleared by these manufacturers attract a peak rate of 14% percent instead of 2.5% percent, as these Tyres and Tubes are meant for Electric Motor Vehicles (known as E-Rickshaw).The sizes of these tyres and tubes mentioned are also used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicle, having three wheels attached to a frame. The vehicle is usually a tricycle, pedal-driven by a driver, though some are equipped with an electric motor to assist the driver. In common parlance, the people understand a cycle rickshaw is a pedal driven, human powered, single track vehicle, having three wheels attached to a frame. This view is fortified with the ruling of Hon. Apex Court. The meaning of Powered Cycle Rickshaw was clearly explained in the case of Delhi Kinetic Engineering Ltd. Vs Collector Of Central Excise and upheld by Supreme Court bench on 21.03.1996 and reported in 1997 (94) ELT A157(SC) = 1996 (3) TMI 555 - SUPREME COURT . It is well settled principle that in interpreting the entries of tax statute, preference should be given to the common parlance meaning and the one defined in local dictionary. In common as well as in commercial parlance, principle of classification provides that goods should be classified according to their popular meaning or as they are understood in their commercial sense and not as per the scientific or technical meaning. How the product is identified by the class or section of people dealing with or using the produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o does not appear to be in consonance with the legislative intent. The applicant has relied upon the various case laws. We have carefully gone through the case laws. The case laws cited by applicant are more or less related to advancement of technology. The courts have observed that there is no change in the class of goods. The textile remains as textile. The change in method of manufacturing does not change the product. In present case we have seen that the Three wheeled power cycle rickshaw and E-rickshaw are two different and very distinct commercial commodity understood in market. We respectfully opine that the ratio of the judgment cited by the applicant is not squarely applicable to this case. It is settled principle that the entry in a tax statute is to be considered or interpreted in respect of a product or an item and its name in the commercial parlance is to be considered and if there is no clear identity or there is no clarity on the said aspect, the court may consider the composition of the product used or other dictionary meaning, etc. When the pro-duct is well known and understood amongst the buyers in commercial parlance, the other test namely, its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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