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TMI Blog2019 (4) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... either made of base metal nor has a working edge as required of a tool under this chapter and therefore the product is not to be classified under Chapter 8201. Classification under a Heading is to be governed only by the relevant Tariff-entries, Heading-description, etc. Heading 8201, as discussed above, do not envisage that all items used for agriculture would be covered therein but specifically as given in the General Explanatory Notes to Chapter 82, mentioned above, are to be classified based on the constituent material it is made of - The lower authority has considered the above and accordingly pronounced the Ruling. There is no reason to interfere with the same. AAR decision upheld. - A.R. Appeal No. 1/2018/AAAR - - - Dated:- 6-2-2019 - DR. T.V. SOMANATHAN And THIRU.C.P.RAO, MEMBER Preamble 1. In terms of Section 102 of the Central Goods Services Tax Act 2017 /Tamil Nadu Goods Services Tax Act 2017 ( the Act , in Short), this Order may be amended by the Appellate Authority so as to rectify any error apparent on the face of the record, if such error is noticed by the Appellate Authority on its own accord, or is brought to its notice by the concerned offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has sought Advance Ruling on the classification of Agricultural seedling trays manufactured and supplied by them. They had also sought the Applicable tax on Agricultural trays , stating that the goods are agricultural implements under Chapter 8201 which is exempted as per SI.No. 137 of Notification No 2/2017-Central Tax dt 28.06.2017 as amended. The original Advance Ruling Authority after due examination has ruled as follows: Agricultural Seedling Trays made of Plastic manufactured by the Applicant are classifiable under CTH 39269099 and the applicable tax rate is 9% CGST as per SI.No. 111 of Schedule III of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 as amended and is 9% SGST as per SI.No. 111 of Schedule III of G.O.(Ms) No. 62 dated 29.06.2017 No. II (2) /CTR/532 (d-4)/2017 as amended. 2.1 The present Appeal is against the above Ruling. The Appellant has received the order on 24.10.2018 as mentioned in their Appeal Form GST ARA-02 and they have filed the Appeal on 22.11.2018. In terms of section 100(2) of the Act, an Appeal against Advance Ruling is to be filed within thirty days from the date of communication of the Ruling and therefore, the Appeal is filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ween each seedling etc. The trays help in growing and transporting the seedlings in an organized, labor-saving manner, so that the seedling mats grown can be fed into the machines or planted as such by hand. However, the tray itself is not a part of any machine or used with any machine or electronically driven nor is it an accessory of any agricultural machinery. Rice planting machinery do not need these seedling trays to function and hence cannot be classified as parts or accessories of agricultural machinery. Seedling Trays made of fully of plastic i.e. polypropylene and hence it cannot be classified under chapter 82 or anywhere under Section XV and accordingly it cannot be classified under 8201 as Hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry. Tariff Heading 39269099 covers other articles not specified. HSN Explanatory Notes to Chapter heading 3926 states This heading covers articles, not elsewhere specified or included of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich consumes 33% of rice production time. Hence farmers are switching over to mechanized transplantation. This process of using trays with rice transplanting machines has comprehensive set of advantages over traditional transplantation. The trays are used for paddy transplantation either manually or with any machine. The demand for these trays is growing rapidly as raising paddy seedling using trays ensures even growth and the land required for growing is highly reduced. The seedlings are then planted on the soil using rice transplantation machines. This process of mechanized transplantation improves the yield by 25% and also makes the process of de-weeding easier as the seedlings are arranged in neat rows. This method also saves on labour costs and the quantity of water used As the trays were exempted from the earlier state tax regime TNVAT, the cost of the trays were affordable. But after GST implementation, the cost of the trays has become higher and the farmers find it difficult to afford. This also affected the sales of the trays and hence the process of mechanization. Earlier they were registered under TNVAT Act and were exempted from the payment of tax for sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule, the expression base metals means : iron and steel, copper. nickel, aluminium lead. zinc, tin, tungsten (wolfram). molybdenum tantalum, magnesium, cobalt, bismuth, cadmium, titanium, zirconium, antimony. manganese, beryllium, chromium, germanium, vanadium .. gallium, hafnium, indium, niobium (columbium), rhenium and thallium. Chapter Notes: CHAPTER 82 Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal NOTES: 1. Apart from blow lamps. portable forges, grinding wheels with frameworks, manicure or pedicure sets, and goods of heading 8209. this Chapter covers only articles with a blade, working edge, working surface or other working part of: (a) base metal; (b) metal carbides or cermets: (c) precious or semi-precious stones (natural, synthetic or reconstructed) on a support of base metal, metal carbide or cermet; or (d) abrasive materials on a support of base metal, provided that the articles have cutting teeth, flutes. grooves, or the like. of base metal, which retain their identity and function after the application of the abrasive. Chapter Heading 8201: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cs/ polypropylene. 6.4 Further, the Customs Tariff is based on the Harmonious System of Nomenclature(HSN) which is a dependable guide for interpreting the customs tariff as held by Supreme court in the case of L.M.L. Ltd Vs. Commissioner of customs [2010 (258) ELT 321 (S.C.)] = 2010 (9) TMI 12 - SUPREME COURT OF INDIA . The Explanatory Notes General to Chapter 82 states: GENERAL This Chapter covers certain specific kinds of base metal articles, of the. nature of tools, implements, cutlery, tableware, etc., which are excluded from the preceding Chapters of Section XV, and are not machinery or appliances of Section XVI. (see below), nor instruments or apparatus proper to Chapter 90, nor articles of heading 96.03 or 96,04. This Chapter includes : (A) Tools which, apart from certain specified exceptions (e.g., blades for machine saws), are used m the hand (headings 82.01 to 82.05). (B) Tools of two or more of the headings 82.02 to 82.05, put up in sets for retail sale (heading 82.06). (C) interchangeable tools for hand tools, for machine-tools or for power-operated hand tools (heading 82.07), knives and blades for machines 9r mechanical applianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the constituent material of the working part. 6.5 In the case at hand, the product, Agricultural Seedling Tray , is made up of Plastics and not of any of the base metals specified in the section notes as stated by the Appellant themselves. The contention of the Appellant is that the trays are used for germination of paddy and therefore, the product is to be considered as a Hand tool used for agriculture and classified under 8201. We find that Chapter 82 covers only those tools made of base metals; The construction of description 8201 is a typical one attracting the application of the principle of ejusdem generis for interpretation of the phrase Other tools of a kind used in agriculture, .. . The ejusdem generis principle specifies that general terms following particular expressions take their colour and meaning as that of the preceding expressions . Applying this, we find that in Chapter 8201, the specifics are spades, shovels, mattocks, picks, hoes, forks and rakes, axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and the subsequent phrase and other tools of a kind used in agricult ..... X X X X Extracts X X X X X X X X Extracts X X X X
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