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TMI Blog2018 (8) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... numerated under Schedule III of Tax-Rate Notification(s), vide serial No. 375, but the situation changes when storage battery or electric accumulator is supplied separately irrespective of whether under a single contract or a separate contract. The storage battery has multiple uses and can be put to different uses and when supplied separately with static converter (UPS) it cannot be considered as a composite supply or a naturally bundled supply - there is no infirmity in the Ruling rendered by the West Bengal Authority for Advance Ruling. Appeal dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... as held by the West Bengal Authority for Advance Ruling Before entering into merit of the appeal it is necessary to see the relevant definitions of the GST Act, which are as under: Composite supply defined under Clause (30) of Section 2 of GST Act, 2017- "composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. Illustration: Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hapter/ Heading/ Sub-heading/ Tariff item Description of Goods Remarks IV 138 14% 14% 8506 Primary Cells and primary batteries Omitted on 15.11.2017 vide Notification No. 41/2017Central (Rate) dated 14.11.2017 III 376A 9% 9% 8506 Primary Cells and primary batteries Inserted on 15.11.2017 vide Notification No. 41/2017Central (Rate) dated 14.11.2017 IV 139 14% 14% 8507 Electric accumulators, including separators therefor, whether rectangular (including square) III 375 9% 9% 8504 Transformers Industrial Electronics, Electric Transformer; Static Converters (UPS) The Appellant submitted written submissions and argued that when UPS comprising of static converter and an external battery is supplied it falls under Tarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uninterrupted factor is possible only because of the battery part of the system making the battery an essential part of the system. This decision was also relied upon in the case of Commissioner of Central Excise Vs Electronics and Controls [1998 (27) RLT 816 (CEGAT)] holding that UPS can function without battery for mere conditioning of power but to provide uninterrupted power supply, battery is essential pre-requisite. The Appellant submitted that in Mangalore Chemicals & Fertilisers Co. Ltd. Vs Collector of Customs, Bombay [1997 (93) ELT 548 (Tribunal)] the UPS was held classifiable as a static converter under Customs Tariff Head 8504 even if it incorporates rectifiers and inverters. The Appellant also cited the case of Luminous Elect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... changes when storage battery or electric accumulator is supplied separately irrespective of whether under a single contract or a separate contract. We fully agree with the Authority for Advance Ruling's observation that…. "The UPS serves no purpose if the battery is not supplied or removed. It cannot function as a UPS unless the battery is attached. However, what needs to be considered is whether or not these two items are "naturally bundled". The stated Illustration to Section 2(30) of the GST Act refers to a supply where the ancillary supplies are inseparable from the principal supply and form an integral part of the composite supply. Note 3 also refers to a composite machine as the one consisting of two or more machines fitte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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