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TMI Blog2022 (11) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... uct does not use pressure or suction to transfer the gas from filling station to fuel tank of the vehicle. It is further observed that it is the difference between the pressures of the gas in the filling station and that in the fuel tank of the vehicle that actuate the flow of gas from the filling station to the fuel tank. That is, the pressure in the filling station is higher than that in the fuel tank. Since it is trite that the gas flows from high pressure to low pressure, accordingly, the gas in the filling station starts flowing into the fuel tank of the vehicle. The pump covered under Heading 84.13 is an instrument that is used for raising and/or displacing volumes of liquid from one place to another, using external forces, which may be in the nature of pressure or suction. Since the impugned product, CNG Dispenser, does not use any external force driven by any electrical or mechanical devices, the same cannot be considered as pump in terms of its meaning provided under the explanatory note - Since it has been established now that the impugned product is not a pump, which is the primary clause of the entry of the chapter heading 84.13, the same will not be classified under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable to the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the IGST Act ). 4. So far as relevant to the present appeal, the Appellant is engaged in the manufacture and sale of Compressed Natural Gas Dispenser (hereinafter referred to as CNG Dispenser ) which is supplied for use at Compressed Natural Gas (hereinafter referred to as CNG ) dispensing stations for vehicles and automobiles, which are operated by city gas distribution Companies like Mahanagar Gas Ltd, Gujarat Gas Ltd etc. 5. The CNG Dispenser supra is installed at consumer CNG fuel dispensing station's premises. This CNG Dispenser has an inbuilt mechanism to constantly measure and regulate the mass of natural gas being transferred to the vehicle as also the pressure of the natural gas so as to ensure that the rated pressure capacity of the CNG tank in the vehicle is not exceeded, for reasons of safety. Upon the pre-set values being reached, the CNG Dispenser, automatically, by way of a control unit and actuator. cuts the supply of CNG to the CNG tank in the vehicle. 6. To commence refueling of CNG vehicles, the drivers / operators need to unhook the nozzle from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. It is also an undisputed fact that that there is no application of external force for causing movement of CNG into the vehicle. 10. In such background, the department submitted a reply to the application of the Appellant supra submitting that the CNG Dispenser is correctly classifiable under Heading 84.13 only as it is used to transmit fuel which is covered in the entry. 11. The Appellant submitted a rejoinder to the submissions of the department stating that Heading 84.13 should be read completely and it includes within its fold pumps which are used to dispense fuel and therefore, in the undisputed absence of the pump, there arises no question of application of Heading 84.13. 12. Subsequent to supra, the MAAR passed the Impugned Order No. GST-ARA- 109/2019-20/B-112 dated 15.12.2021 (hereinafter referred to as the Impugned Advance Ruling ) vide which it has been held that the CNG Dispenser is correctly classifiable under Heading 84. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India. GROUNDS OF APPEAL A. The Impugned Advance Ruling has completely ignored the scope of Heading 84.13 and incorrectly interpreted the same 16. The relevant part of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 is reproduced infra: S.No. Chapter/Heading/ Sub-heading/ Tariff Item Description of Goods 117. 8413 Pumps for dispensing fuel or lubricants of the type used in filling stations or garages [8413 11], Fuel, lubricating or cooling medium pumps for internal combustion piston engines [8413 301] 17. Explanation (iv) to the Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 reads adopt the principles of the General Rules for Interpretation to the Customs Tariff, to the extent as applicable. Therefore, for any item to be covered in SI. No. 117 supra, it is trite that the following conditions be satisfied: a) That the same be covered by Heading 84.13 of the Customs Tariff; and b) That the same answer to the description, viz., the item in question should be a pump which is used in filling statio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cylinders may be either in line or in a star shape. . . (B) ROTARY POSITIVE DISPLACEMENT PUMPS In these also, the intake and discharge of the liquid is effected by suction and compression, in this case produced by cams (lobes) or similar devices, rotated continuously on an axis. These devices make contact, at one or more points with the wall of the body of the pump, and firm in this war the chambers in which the liquid is displaced. (C) CENTRIFUGAL PUMPS In these pumps, liquid taken in axially is set in rotation by the revolving blades of a rotor (impeller), the resulting centrifugal action forcing the liquid outwards to the periphery of an annular casing containing an outlet placed tangentially. The casing is sometimes Jilted with divergent vanes (diffuser vanes) to transform the kinetic energy of the, fluid into high pressure. Centrifugal pumps may be driven by an electric or internal combustion motor or by a turbine. Because of their high working speed, they are suitable for direct coupling whereas piston or rotary, pumps require to be driven through reduction gears. This group also covers submersible pumps, central healing circulating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. [Emphasis supplied] 23. As can be seen from supra, the Impugned Advance Ruling holds that the CNG Dispensers supplied by the Appellant qualifies to be a pump because it is causing movement of the CNG from one place to another in a particular direction. It is submitted that such conclusion is not only patently against the Explanatory Notes and dictionary meanings supra, the same is patently illogical and unreasonable. If such findings is assumed to be correct in law, a simpliciter steel tube or a pipe also qualifies to be a pump, which is absurd, irrational and cannot be accepted in law. 24. In sum therefore, it is submitted that the CNG Dispenser in question supplied by the Appellant does not have any pump or pumping function, i.e., an external force by virtue of which the CNG is transported from the filling station to the vehicle tank. This statement is undisputed as evident vide paragraph 5.9 of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tus for automatically controlling the flow, level, pressure or other variables of liquids or gases, or for automatically controlling temperature, whether or not their operation depends on an electrical phenomenon which varies according to the factor to be automatically controlled, which are designed to bring this factor to, and maintain it at, a desired value, stabilized against disturbances. by constantly or periodically measuring its actual value; and (b) automatic regulators of electrical quantities, and instruments or apparatus for automatically controlling non-electrical quantities the operation of which depends on an electrical phenomenon varying according to the Actor to be controlled, which are designed to bring this factor to, and maintain it cut, a desired value, stabilized against disturbances, by constantly or periodically measuring its actual value. 28. The Explanatory Notes further explain the scope of Chapter Note 7(a) and Heading 90.32 as infra: (I) INSTRUMENTS AND APPARATUS FOR AUTOMATICALLY CONTROLLING THE FLOW, LEVEL, PRESSURE OR OTHER VARIABLES OF LIQUIDS OR GASES, OR FOR AUTOMATICALLY CONTROLLING TEMPERATURE Automatic control apparatus for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In addition to supra, it is submitted that the exclusion provided for in the Explanatory Notes to Heading 90.32 is also not applicable in the present case. For ease of reference, the same is reproduced below for ready reference: Instruments and apparatus for automatically controlling the flow, level, pressure and other variables of liquids or gases or for automatically controlling temperature are connected to an appliance which carries out the orders (pump, compressor, valve, furnace burner, etc.) which restores the variable (e.g. liquid measured in a tank or temperature measured in a room) to the prescribed value, or which, in the case of a safety system for instance, stops the operation of the machine or apparatus controlled. This appliance, generally remote controlled by a mechanical, hydraulic, pneumatic or electric control, is to be classified in its own appropriate heading (pump or compressor: heading 84.13 or 84.14; valve: heading 84.81, etc.). If the automatic control apparatus is combined with the appliance which carries out the orders, the classification of the whole is to be determined under either Interpretive Rule I or Interpretative Rule 3 (b) (see Part (III) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by city gas distribution Companies like Mahanagar Gas Ltd, Gujarat Gas Ltd etc. The CNG Dispenser supra is installed at consumer CNG fuel dispensing station's premises. This CNG Dispenser has an inbuilt mechanism to constantly measure and regulate the mass and pressure of natural gas being transferred to the vehicle's fuel tank as per the pre-set values of the devices. The CNG Dispenser, automatically, by way of a control unit and actuator, cuts the supply of CNG to the CNG tank in the vehicle. 37. He further contended that the CNG Dispenser manufactured and supplied by the Appellant does not have any pump and neither does it perform any function of pumping. As per the Appellant, as there is no pump. Heading 84.13 (pumps) is inapplicable. Further, since the CNG Dispenser can automatically control and regulate the pressure and/ or value of the CNG dispensed, it will qualify to be classified under Heading 90.32 as an automatically controlling or regulating apparatus. The Appellant has also made reference of technical drawings in this regard and contended that the CNG Dispenser does not have a pump or a pumping function. Rather, it has simpliciter inlets and outlets which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It can therefore be said that CNG fuel dispensers are used for distribution of Compressed Natural Gas (CNG) which is a fuel and as per the submissions of the applicant, they are equipped with electronic counters of quantity and price of pumping. 5.10 We find that Chapter Heading 8413 11 of the GST Tariff covers Pumps for dispensing fuel or lubricants of the type used in filling stations or garages . The impugned product 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. 40. As regards the aforesaid observations of the MAAR, the Appellant have contended that the aforesaid observations of the MAAR are contrary to the explanatory notes to the Chapter 84 and the dictionary meanings of the term pump . It has further been contended by the Appellant that if such interpretation of CNG dispenser as have been derived by the MAAR wherein they have contemplated the impugned product as pump attributing to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re us is as to whether the impugned product can be construed as pump as provided under the relevant entry of the Notification No. 01/2017-C.T.(Rate) dated 28.06.2017. 43. To decide the aforesaid issue, we would like to understand the meaning of the term pump . It is observed that the term pump is neither defined under the GST law including Acts, rules, or notification issued thereunder, nor under the Customs Tariff Act, 1975, which has been referred to in the notification no. 01/2017-C.T. (Rate) dated 28.06.2017, for the purpose of determining HSN of the goods based on the descriptions contained in the Chapters of the first schedule to the Customs Tariff Act, 1975. Under these circumstances, we would like to refer to the dictionary meaning of the said term pump , which is being reproduced hereunder: Oxford Learners Dictionary: a machine that is used to force liquid, gas or air into or out of something; Merriam-Webster: a device that raises, transfers, delivers, or compresses fluids or that attenuates gases especially by suction or pressure or both. 44. On bare perusal of the aforesaid meaning of the term pump , it is evident that for any device or appara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forcing action of a piston or plunger driven within a cylinder, the inlet and outlet being regulated by valves. Single-acting pumps utilize the thrust or suction of one end of the piston only: double-acting types pump at both ends of the piston thus using both the forward and reverse strokes. In simple lift pumps the liquid is merely raised by suction and discharged against atmospheric pressure. In force pumps, the compression stroke is used, in addition to the suction stroke, to force the liquid to heights or against pressure. Multi-cylinder pumps are used for increased output. The cylinders may be either in line or in a star shape. (B) ROTARY POSITIVE DISPLACEMENT PUMPS In these also, the intake and discharge of the liquid is effected by suction and compression, in this case produced by cams (lobes) or similar devices, rotated continuously on an axis. These devices make contact, at one or more points with the wall of the body of the pump, and, form in this way the chambers in which the liquid is displaced. (C) CENTRIFUGAL PUMPS In these pumps, liquid taken in axially is set in rotation by the revolving blades of a rotor (impeller), the resultin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age under Heading 90.32. The text of the same is reproduced for ready reference: 7. Heading 9032 applies only to: (a) instruments and apparatus for automatically controlling the flow, level, pressure or other variables of liquids or gases, or for automatically controlling temperature, whether or 1701 their operation depends on an electrical phenomenon which varies according to the factor to be automatically controlled, which are designed to bring this factor to, and maintain it at, a desired value stabilized against disturbances by constantly or periodically measuring its actual value; and (b) automatic regulators of electrical quantities, and instruments or apparatus for automatically controlling non-electrical quantities the operation of which depends on an electrical phenomenon varying according to the factor to be controlled, which are designed to bring this. factor to, and maintain it at, a desired value, stabilized against disturbances, by constantly or periodically measuring its actual value. 51. The Explanatory Notes further explain the scope of Chapter Note 7(a) and Heading 90.32 as infra: (I) INSTRUMENTS AND APPARATUS FOR AUTOMATICALLY CONTROLLING ..... X X X X Extracts X X X X X X X X Extracts X X X X
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