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TMI Blog2021 (10) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... ors were supplying the same product under HSN 8424 and 9616, therefore they filed the application for Advance Ruling. The appellant has submitted the details of the items that they are dealing with and their utility as under: A. Lotion Pump (HS Code 84242000): This type of pump is hand operated mechanical appliance for dispensing liquid or gel lifted through a plastic pipe which goes inside the bottle. In this type of pump, liquid is dispensed from Bottle through actuator by pressing piston by finger up and down, is mechanical in nature. This pump cannot be used without bottle and is packaging item. The materials used therein are poly propylene, LDPE, Glass Ball and SS Spring. The usage is on bottle of Hand Disinfectant, Hand Sanitizer Gel and Hand Wash Soap (Dettol Hand Wash), Tomato Soap Dispenser etc. This product can be used for multiple usages and is not related to a specific purpose. B. Fine Mist Sprayers (HS Code 84242000): This type of pump is hand operated mechanical appliance for spraying liquid or gel lifted through a plastic pipe which goes inside the bottle. In this type of pump, liquid is dispensed from bottle through actuator by pressing piston by finger up and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltiple usages and is not related to a specific purpose. 3. The appellant had filed an application for Advance Ruling under Section 97 of the CGST Act, 2017 asking about the HSN code and rate of tax for Plastic Mechanical Liquid Dispenser. The Authority of Advance Ruling, Gujarat (hereinafter referred to as GAAR), after studying the technical details of the product, ruled vide Advance Ruling No. GUJ/GAAR/R/34/2020 dated 03.07.2020 that imported plastic items (stated as mechanical liquid dispenser) shall be classified under HSN Chapter sub-heading 3926.90-others and are liable to GST at 28% upto 14.11.2017 and 18% GST from 15.11.2017 onwards. The appellant has stated that since they have been exposed to a totally confusing situation by the above order, customs department and classification being used in trade parlance, the world customs organization also opines that such products merit classification under Chapter 8424 of the ITC(HSN). The appellant has further submitted that the R.K.Jain GST Tariff 12th Edition 2020-21 also indicates that such products viz. sprayers or dispensing appliances would fall under Chapter 8424 (they have enclosed the relevant portion of the same). They ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in plastic sprayers are held to be classified under HSN Code 84244100. Copy of order is submitted. This type of pump is simple mechanical device operated by thumb or finger or palm of hand's pressure. This pump is used to dispense liquid from container or bottle on which it is fitted. This kind of pump is available in different neck size and dispensing capacity. (iv) The appellant would like to rely on the Custom Circular No.6/97-Cus dated 14.3.1997 [from F.No.527/1/97 Cus(TU)] regarding the report of the 18th session of the Harmonised Systems Committee, which is reproduced hereunder: "1. I am directed to say that in its 18th session, the Harmonised Systems Committee of the World Customs Organization had, inter alia, examined the classification of various articles. Important classification decision taken by the committee are enclosed at Annexure A. One of the decisions relates to amendment of explanatory note to Interpretative Rule 2(a) of the General Interpretative Rules. It has been decided to delete the word 'simple' from the explanatory note of this rule. A new para has also been added to the explanatory note. As per new explanatory note complexities of assembly method are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that their aforementioned products are rightly classified under Heading 8424 of the Customs Tariff Act, 1975. Therefore, the issue involved in this case is the proper classification of the product 'Plastic Mechanical Liquid Dispenser'. 8. The appellant is engaged in importing various types of plastic devices intended to be screwed/fitted on the bottle/containers. These plastic devices are used for pumping/ dispensing liquid or lotion from a bottle and serves for the depletion of the contents, viz. liquid, gel, cream etc.. The appellant further submitted that till 30.06.2017, they were importing this material under HS Code 3923 (Caps & closure), but after implementation of GST, they were asked to clear the goods under HSN 3926 (Other articles of Plastics) bearing GST of 28%. The appellant further submitted that they were not certain about HSN of the said imported goods and other competitors were supplying same product under HSN 8424 and 9616. So, it leads to confusion and, hence, they applied for Advance Ruling on the classification of the imported goods. 9. We note that the classification of goods under GST regime has to be done in accordance with the Customs Tariff Act, 1975, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5) or of furskin (heading 4303), of a kind used in machinery or mechanical appliances or for other technical uses; (c) bobbins, spools, cops, cones, cores, reels or similar supports, of any material (for example, Chapter 39, 40, 44 or 48 or Section XV); (d) perforated cards for Jacquard or similar machines (for example, Chapter 39 or 48 or Section XV); (e) transmission or conveyor belts or belting of textile material (heading 5910) or other articles of textile material for technical uses (heading 5911); (f) precious or semi-precious stones (natural, synthetic or reconstructed) of headings 7102 to 7104, or articles wholly of such stones of heading 7116 except unmounted worked sapphires and diamonds for styli (heading 8522); (g) parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39); (h) - - - - - - - - - - - -; (ij) - - - - - - - - - - - -; 10.1 As can be seen from the above, Note 1 of Section XVI contains a list of products/goods which are not covered under this Section XVI i.e. under Chapters 84 and 85. Clause(g) of the Note 1 of Section XVI mentions 'parts of general use, as defined in Note 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/2017-Central Tax (Rate) dated 28.06.2017, "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the Customs Tariff Act, 1975(51 of 1975). It has also been provided therein that the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. We also find the appellant making special mention in their submission that till 30.06.2017, they were importing their product 'plastic mechanical liquid dispensers' under HSN code 3923(caps and closures), but after the implementation of GST, they were asked to clear the said goods under HSN 3926(other articles of plastics). Before proceeding to decide the classification of the aforementioned product, it is necessary to refer to the details of the said product with respect to its contents, uses etc. The appellant has provided pictures/images of their product. Also, as per the submission of the appellant, the materials used in the said product are Poly pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich they are fitted, besides performing the function of pumping/dispensing liquid or lotion from a bottle and serving for the depletion of the contents contained therein i.e. liquid, gel, cream etc. Further, the appellant themselves have stated that the aforementioned product which they import from China are classified under the Tariff Heading 3923 only (caps and closures). We therefore, find that an imported item/product classified under Tariff Heading 3923 cannot have a distinct or different heading/classification when sold in the domestic market, especially when we are referring to the First Schedule to the Customs Tariff Act, 1975(51 of 1975) for arriving at the classification of the products in the GST regime. Further, as regards the GAAR classifying the product of the appellant under Heading 3926.90, we find that it is a residual entry and would therefore, cover only those plastic articles not classified anywhere else in any other heading in Chapter 39. For the purpose, a reference is required to be made to Rule 3(a) of the General Rules for the interpretation of the Customs Tariff. Rule 3(a) reads as under: "3. When by application of Rule 2(b) or for any other reason, goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; - Other appliances : 8424 81 00 -- Agricultural or horticultural. 8424 89 -- Other : 8424 89 10 --- Painting equipment, including electrostatic phosphating and powder coating equipment 8424 89 20 --- Industrial bellows 8424 89 90 --- Other 8424 90 00 - Parts 13.1 Relevant Chapter notes to Chapter 84 reads as under: Heading 8424 does not cover : (a) Ink-jet printing machines (heading 8443); or (b) Water-jet cutting machines (heading 8456)."; 13.2 We find that Chapter Heading No.8424 deals with mechanical appliances (whether or not hand-operated) for projecting, dispersing or spraying liquids or powders; Fire extinguishers, whether or not charged; Spray guns and similar appliances; Steam or sand blasting machines and similar jet projecting machines. On going through the submissions as well as the images of their products given by the appellant, it appears that these items/products in question are plastic devices intended to be screwed/fitted on to the bottle/containers which are solely used for pumping/ dispensing liquid or lotion from a bottle and serves for the depletion of the contents, viz. liquid, gel, cream etc. i.e. these plastic devices of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of CGST i.e.(i) 2.5 per cent in respect of goods specified in Schedule I, (ii) 6 per cent in respect of goods specified in Schedule II, (iii) 9 per cent. in respect of goods specified in Schedule III, (iv) 14 per cent in respect of goods specified in Schedule IV, (v) 1.5 per cent in respect of goods specified in Schedule V, and (vi) 0.125 per cent in respect of goods specified in Schedule VI. On going through the various schedules of the aforementioned notification, we find that the entry of the product 'Plastic Mechanical Liquid Dispenser' (which are covered under the heading 3923.50 as 'caps, lids and other closures' as discussed in para 12.2. above) of the appellant is found at Sr.No.108 of Schedule-III of the said notification (on which GST payable is 18% (9% CGST + 9% SGST). It reads as under: S.No. Chapter/Heading/sub-Heading/Tariff item Description of goods 108. 3923 Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics. Notification No.1/2017-Central Tax(Rate) dated 28.06.2017 has been amended by Notification No.14/2019-Central Tax(Rate) dated 30.09.2019 vide which entry No.80AA has been inserted in Schedul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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