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TMI Blog2021 (2) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... of copper. From the use of the word other in the heading of HSN 7419, it is amply clear that it refers to articles which are not mentioned elsewhere. When it comes to HSN 7419.99, again it is shown as other , so as to mean that the items mentioned subsequently are not items specified earlier. Therefore, HSN 7419.99.30 with which Entry 3(2) of the Third Schedule of the Act is aligned, cannot be deemed to include the specific products of the assessee being taps, valves and other fittings made of brass which also are used as sanitary-wares, especially for reason of the items mentioned under HSN Codes 7412.20 and 8481, 8481.80 and 8481.80.20 - Chapter 74 of the Explanatory Notes that specific items of copper and its alloys have been identified in eight digit HSN Codes. For example, HSN 7418.10.21 refers to utensils of brass. So also HSN 7418.20.10 refers to sanitaryware of copper. It can be seen that though sanitaryware of brass is not specifically mentioned the products dealt with by the assessee comes under the above extracted entries of 7412 and 8481. When we look at Entry 3(2) in Third Schedule, it can be seen that it does not take in all articles of brass. Entry 3 going by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law arise for consideration in this appeal. (i) Whether on the facts and in the circumstances the Authority for Clarifications is justified in law in holding that Order No. C7-16374/06, dated 19-5-2006 Order No. C7-15028/06/C.T., dated 29-6-2006 are sufficient to hold that water supply and sanitary fittings of every description are taxable at the rate of 12.5% in the light of the setting aside of the reclarification and direction to further re-clarify the matter in OT Appeal No. 5/2006? (ii) Whether on the facts and in the circumstances the Authority for Clarifications is justified in law in holding that articles of brass come under HSN code 7418.20.10 parts 7418.20.20 disregarding the fact that articles of brass has been separately listed by the Customs Tariff Act, 1975 under Other Articles of Copper aligned with HSN 7419.99.30 as per Annexure-G? (iii) Whether on the facts and in the circumstances of the case the Authority for Clarifications is justified in law in holding that Sl. No. 101 of SRO 82/2006 takes in articles of brass against the finding of this Honourable Court in Annexure-D judgment that Sl. No. 101 of SRO 82/2006 does not contain articles of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant had not taken up the issue thereafter and his registration also stands cancelled in 2012. We fail to understand why the appellant took up the matter again before the Authority for Clarification in the year 2019. On a specific question regarding the same, the Counsel for the appellant submits that one of their sister concerns, namely, M/s. Cochin Sanitary Stores, had also approached the Authority for Clarification. We find from Annexure F that as far as M/s. Cochin Sanitary Stores is concerned, they had challenged the assessment and penalty proceedings against them in appeal. As such, there can be no proceedings under Section 94 at the instance of M/s. Cochin Sanitary Stores. Annexure F also reveals that no application for clarification under Section 94 of the KVAT Act was filed by any person. In the above situation, we fail to understand the reason for which Annexure F was issued. 5. Be that as it may, to properly appreciate the issue of classification raised before us, it is necessary to extract the relevant provisions contained in the KVAT Act and Rules and Schedules relating to the issue. Section 6(1)(a) and (d) 6. Levy of tax on sale or purchase of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs of every description including storage tanks other than those made of PVC; sinks, wash basins, wash basin pedestals, taps, bath showers, bidets, water closet pans, flushing cisterns, urinals, commodes, man-hole covers used in connection with drainage and sewerage disposals, parts and accessories thereof; (1) xxxxxxxxxx xxxxxxxxxx xxxx xxxx (7) Sanitaryware and parts thereof of copper (a) Sanitaryware 7418.20.10 (b) Parts 7418.20.20 xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx (13) Others xxxxx 7. Annexure D judgment considered the earlier clarification issued by the Commissioner holding that sanitary equipments made of brass comes under the notification taxable @ 12.5%. The Division Bench found that the Commissioner has not found the sub-entry of Entry 101 of the SRO, under which s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n HSN Coding system deals with Copper and articles thereof . The Chapter deals with Copper, copper alloys and related materials. Several kinds of brass items have been included for coding under the Chapter. HSN 7418 deals with table, kitchen or other household articles and parts thereof, of copper; pot scourers and scouring or polishing pads, glouse and the like, of copper; and sanitaryware and parts thereof, of copper. Sanitaryware and parts thereof, of copper are covered under HSN 7418.20.10 and HSN 7418.20.20. Admittedly the Commissioner is wrong in classifying sanitarywares made of brass under HSN 7418.20.10. 11. HSN 74.19 as per the Explanatory Notes relates to other articles of copper . HSN 7419.99 relates to other and has the following recital in the Explanatory Notes : This heading covers all articles of copper other than those covered by preceding headings of this Chapter or by Note 1 to Section XV, or articles specified or included in Chapter 82 or 83, or more specifically covered elsewhere in the Nomenclature . 12. HSN 7419.99.20 relates to articles of copper alloys electroplated with nickel-silver. HSN 7419.99.30 relates to articles of brass . The princ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduce disputes on account of tariff classification . In resolving a dispute relating tariff classification, HSN was found to be the foremost, best and the safest guide. Reckitt Benckiser (India) Ltd. also held that when entries in a taxation statute are aligned with the HSN codes, then, necessarily the interpretation has to be based on the HSN code, as available in the Customs Act. When the entry in the KVAT Act refers to the eight digit HSN Code the classification has to be decided on the basis of the HSN Chapter heading and the enumerated commodities. If the commodity falls within that, definitely it has to be included under the Entry, against which the HSN code is given. 13. Applying the principles, it can be seen that Chapter 74 deals with Copper and articles thereof . The Note at the beginning of the Chapter says that it would take in alloys of copper also. Several items of copper are dealt with under different four digit HSN Codes bearing Nos. 7401 to 7419. HSN 7418 specifically deals with sanitaryware and parts thereof of copper. The four digit code HSN 7419 says other articles of copper. From the use of the word other in the heading of HSN 7419, it is amply clear t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ass. Entry 3 going by the heading takes in only such articles and other utensils of aluminium, brass, bronze, copper, etc. other than those specified in any other Schedule of the Act. HSN Code 7419.99.30 to which Entry 3(2) of the Third Schedule is aligned, speaks of Articles of brass under HSN 7419.99 with heading Other which takes in only those Articles not mentioned elsewhere. This is also the purport of the recital under 7419.99 we referred to earlier, which heading covers... only those articles... other than those...more specifically covered elsewhere in the Nomenclature. In this context it is also to be noticed that sub-entry 13 of Entry 101 is not aligned with an HSN code, since the items of brass sought to be covered therein having the character also of a sanitaryware, are covered under various nomenclature codes. 15. The first question hence is answered against the assessee and in favour of the Revenue. The products of the assessee though can be used as sanitarywares, also are used in general water supply and are covered under the various HSN codes as tubes or pipe fittings, taps, cocks, valves and similar appliances for pipes respectively coming in HSN Codes 7412 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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