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TMI Blog2021 (12) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... is designed to dispense fuel, in this case CNG, which are used in filling stations, and acts as a pump which causes CNG, a gas, to move from one place to another. Thus the impugned product can be said to be a type of pump which are used for dispensing fuel and are therefore classifiable under HSN 8413 11 91 of the GST Tariff - Section XVI of the GST Tariff covers Chapter Heading 84 and 85 of the GST Tariff. Note 1 (m) of the Section Notes states that, articles of Chapter 90 of the GST Tariff are not covered under Section XVI i.e. Chapters 84 and 85 of the GST Tariff. Further primary function of the impugned product is to dispense CNG Fuel and has an inbuilt mechanism to constantly measure and regulate the mass of Gas being transferred to the vehicle. The impugned product is covered under Chapter Heading 8413.11 of the GST Tariff, it is not covered under in SL. No. 422, Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28 June 2017 as amended as the impugned product cannot be classified under Chapter 90.32 of the GST Tariff. - GST-ARA-109/2019-20/B-112, - - - Dated:- 15-12-2021 - Shri Rajiv Magoo, and Shri T.R. Ramnani, Member No. GST-ARA-109/2019-20/B-11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, the CNG Dispenser measures and regulates the pressure. 2.4 Presently, the Applicant is clearing the CNG Dispensers under Heading 84.13, covered in SI. No. 117, Schedule IV of Notification No. 1/2017-C.T. (Rate) dated 28.06.2017. The CNG Dispenser does not have a pump or a pumping function. Rather, it has inlets and outlets which allows for movement of the CNG from the storage tank to the vehicle via the CNG Dispenser. The reason for movement of the CNG is that the pressure in the tank is low, while that of being dispensed is high. Hence, by principle of simple physics, viz., gas moves from a region of high pressure to low pressure. Further, there is no application of external force for causing movement of CNG into the vehicle. 2.5 Applicant now feels that the CNG Dispenser is not classifiable SI. No. 117, Schedule IV of Notification No. 1/2017-Central Tax (Rate) dated 28 June 2017 (Heading 84.13) since the same covers pumps for dispensing fuel of the type used in filling stations or garages . 2.6 Applicant submits that as per Explanation (iv) of Notification No. 1/2017-C.T (Rate) did 28.06.2017, the rules for interpretation including Section Notes and Chapter Notes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presented at the same time as the pump. These subheadings cover, for example, pumps for delivering petrol or other motor fuels and lubricants as well as pumps with a measuring device for use in food shops, laboratories and various industrial activities. 2.9 From the above, it is necessary that there be present (a) pump and (b) the pump must be for continuously displacing volume of liquid. Further, per the sub-heading explanatory note, subheading 84.13 11 covers only those pumps which are a unit permitting the volumetric control of the quantity of liquid discharged. 2.10 In the present facts, the CNG Dispenser merely regulates the pressure and mass of the CNG and it does not pump, by way of suction, rotation, electro-magnetic forces or the like. 2.11 In addition to the above, as per the explanatory notes for classifying a product in Heading 84.13/ sub-heading 84.13 11, the same must be a pump for a liquid. This is equally fortified by the explanatory notes to sub-heading 84.13 11 which provides that these subheadings cover only those pumps... which ... have been designed to form... device permitting the volumetric control of the quantity of liquid discharged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Chapter, consists of these three devices forming a single entity or in accordance with Note 3 to this Chapter, a functional unit. 2.17 Therefore, in accordance with the HSN Explanatory Notes, the goods in question must be an automatic control device with three seminal criterion in terms of which the particular item would be classifiable under Heading 90.32. It is submitted that the CNG Dispenser in question satisfies all the requirements, as shown infra:- (A) Device for measuring the variable to be controlled: In the present case, the CNG Dispenser measures both mass and pressure of the CNG being dispensed into the vehicle by the mass flowmeter and the pressure sensor; (B) Control device which compares the measured value with the desired value and actuates the device described in (C) below: Controller unit of the CNG Dispenser continuously compares the mass and pressure of the CNG in the CNG tank and actuates by way of stopping or cutting-off the supply of natural gas once the desired values are reached; (C) A starting, stopping or operating device: As explained in (B) above, the control unit keeps a check on the pressure and mass and as and when th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intended to contribute to a clearly defined function are to be classified in the heading appropriate to that function, which is regulating in the present case. The same parity of reasoning that is provided for Section Note 3 of Section XVI supra applies herein also and therefore the correct classification would be Heading 90.32 itself. Applicant Submission dated 10.11.2021:- 2.23 The department has claimed that the CNG Dispenser is correctly classifiable under Heading 84.13 for the reason that since the function of the said item is to dispense fuel, it would be covered therein itself. 2.24 It is submitted that the submission of the department is ex-facie bad in law and without any basis. As the text of Heading 84.13 itself states, what is covered is a pump for dispensing fuel in filling stations or garages . It is an undisputed and accepted position by the department that there is no pump in the CNG Dispenser of the Appellant. Hence, on first principles itself there being no pump or pumping function, Heading 84.13 is inapplicable and deserves to be discarded forthwith. 2.25 It is further submitted that it is also evident from a plain reading of the HSN Explanatory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly clearing the CNG Dispensers under Heading 84.13 of the GST Tariff under Sr. No. 117, Schedule IV of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017. As per applicant's submissions, since the CNG Dispenser neither has a pump, nor a function of a pump or similar thereto and merely measures and controls the amount of CNG being filled, the Applicant has preferred the current application for a determination of the classification and are of the opinion that the impugned product is correctly covered under Sr. No. 422, Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 as amended, and therefore applicant has made submissions accordingly. 5.3 The crux of their contention is, to cover the impugned product under Sr. No. 422, Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, and that the said product is classifiable under HSN 90.32 of the GST Tariff since the CNG Dispenser does not have a pump or a pumping function but merely measures and controls the amount of CNG being filled and is therefore nothing but an Automatic regulating or controlling instrument/apparatus. 5.4 As per the Merriam Webster dictionary, a ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sifiable under HSN 8413 11 91 of the GST Tariff. 5.11 Section XVI of the GST Tariff covers Chapter Heading 84 and 85 of the GST Tariff. Note 1 (m) of the Section Notes states that, articles of Chapter 90 of the GST Tariff are not covered under Section XVI i.e. Chapters 84 and 85 of the GST Tariff. Further primary function of the impugned product is to dispense CNG Fuel and has an inbuilt mechanism to constantly measure and regulate the mass of Gas being transferred to the vehicle. 5.12 As per Note 4 of Section XVI of GST Tariff, where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function. In the instant case the product performs function of a pump of type used in filling stations to dispense CNG Fuel, thus merits classification under HSN 8413 11. 5.13 Further as per WCO Harmonized Commodity Description and Coding System, Explanatory No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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