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TMI Blog2024 (8) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... acid battery / electric accumulator'. The applicant has also submitted that the uses of each of the articles i.e. the said articles are used for lifting of lead acid battery, transportation purposes and providing support to top and bottom of the battery plates. Further, the applicant also submitted that the vent plug to be maim factored by them can not only be used for transportation but also few customers would use it as a regular vent plug. Hence there is no doubt regarding the purpose of manufacturing the impugned articles i.e. the said articles are manufactured with the purpose of transporting/ lifting the lead acid battery or providing support to the lead acid battery. Though the impugned articles are all made of plastic, by virtue of Chapter Note 2(s) to Chapter 39 the impugned articles are not covered under Chapter 39. Further the explanatory notes given under General content of Section XVI mentions that the goods of the said section can be of any material including plastics. Also Rule 3(b) of GRIs is also not applicable in the instant case as the same deals with mixed goods, composite goods and goods put up in sets for retail sale which cannot be classified by reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t) are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act. M/s. V M Polymers (Mohan Sujatha), No.60, Water Tank Street, Varadharajapuram Medu, Coimbatore-641015 (hereinafter called as the Applicant ) is engaged in the business of manufacturing plastic articles used as parts of electric accumulator (commonly known as high power batteries ). They are registered under the GST Acts with GSTIN: 33BYTPM5795A1Z1. 2. The Applicant submitted a copy of challan dated 07-10-2023 evidencing payment of application fees of Rs,5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. 3. They have preferred this application seeking Advance Ruling on the following: (1) Whether the products viz. rope handle, vent plug and split top / bottom support, made from plastic which falls under headings 3901 to 3914, fall under HS code classification heading 3926 or 8507 ? (2) What is the rate of tax for the above said products under GST enactments? 4. Statement of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn as transportation vent plug but it is also used as regular vent plug by few customers) Polypropylene Raw material is moulded using an injection moulding machine. It has three parts viz. main PP part, insert part, PP /PE brought-out items. Transportation purposes Split top / bottom support High density Polyethylene (hereinafter referred to as HDPE) / LLDPE Raw material is moulded using an injection moulding machine. Support to top and bottom of the battery plates. STATEMENT OF INTERPRETATION OF LAW 4.4. The applicant submitted that Chapter 39 deals with plastics and articles thereof; rubbers and articles thereof. More specifically, Heading No. 3926 deals with Other articles of plastics and articles of other materials of headings 3901 to 3914 . Whereas, Chapter 85 deals with electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles , and 8507 deals with electric accumulators, including separators therefor, whether or not rectangular (including square) . Further, HS Code 85079010 deals with accumulator cases made of hard rubber and separators and 85079090 de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 2 (b) or for any other reason, goods are, prima facie, classifiable wider two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3 (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to 3 (a) or 3 (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 4.7. The applicant submitted that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .J.S. Statutes 482 states: when construing a general and a specific statute pertaining to the same topic, it is necessary to consider the statutes as consistent with one another and such statutes therefore should be harmonised, if possible, with the objective of giving effect to a consistent legislative policy. On the other hand, where a general statute and a specific statute relating to the same subject-matter cannot be reconciled, the special or specific statute ordinarily will control. The provision more specifically directed to the matter at issue prevails as an exception to or qualification of the provision which is more general in nature, provided that the specific or special statute clearly includes the matter in controversy (Edmond v. United States [137 L Ed 2d 917), Warden u Marrero [41 LEd 2d 383]). 11.5 In this context, it may also be useful to refer to the following judgments, wherein the above maxim/principle has been applied by the Courts in India while dealing with fiscal statutes: (i) CCE v. Shree Baidyanath Ayurved Bhavan Ltd., (2009) 12 SCC 419 = 2009 (237) ELT 225 (S.C.)/2009 taxmarm.com 1041 (S.C.): 56. There is no doubt that a specific entry must prevail over a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sense attributed to it by those people who are conversant with the subject matter that the statute is dealing with This principle should commend to the authorities as it is a good fiscal policy not to put people in doubt or quandary about their tax liability. The common parlance test is an extension of the general principle of interpretation of statutes for deciphering the mind of the law-maker. 4.10. The applicant further submitted that it is essential to note that the plastic articles in question are used for transporting, lifting, packing and other similar activities and not the essential parts of electric accumulators. That it cannot be said that the impugned articles are essential parts of electric accumulators without which the accumulators cannot function. The applicant further submitted that it is also to be noted that vent plug to be manufactured by the applicant cannot only be used for transportation but also few customers would use it as a regular vent plug 4.11. The applicant further submitted that as per SI.No. 139 of Schedule IV of Notification No. 1/2017-CT (R), electric accumulators including separators thereof, whether or not rectangular (including square) falling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at none of the descriptions of goods mentioned under the heading 3926 covers the goods for which the Advance Ruling is sought by the Applicant. As per Section Note 2 of Section XVI of the CTA which is reproduced below; Subject to Note 1 to this Section, Note I to Chapter 84 and. to Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules: a. parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8303, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings: Further, Chapter Note 3 to Chapter 85 of CTA is as follows: 3. For the purposes of heading 8507, the expression electric accumulators includes those presented with ancillary components which contribute to the accumulator's function of storing and supplying energy or protect it from damage, such as electrical connectors, temperature control devices (for example, thermistors) and circuit protection devices. They may also include a portion of the protective housing of the goods in which they are to be used. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the applicant in tire advance ruling application and also the submissions made during the personal hearing. 7.2 The Applicant is before us seeking Advance ruling on the following questions;- (1) Whether the products viz. rope handle, vent plug and split top / bottom support, made from plastic which falls under headings 3901 to 3914, fall under HS code classification heading 3926 or 8507 ? (2) What is the rate of tax. for the above said products under GST enactments. 7.3. We find that the applicant is engaged in the business of supply of plastic articles in different sizes used as parts of electric accumulators. The applicant! is now contemplating manufacture and supply of rope handle, vent plug and split top / bottom support (in different sizes), all used as parts or accessories for lead acid battery / electric accumulators. We find that the applicant contends that the said articles merit classification under heading 3926 and not under heading 8507 . We find that the Applicant's contention is based on the following arguments; 1) Heading 3926 is a more specific classification which also deals with the essential character of the products, i.e. plastic. 2) It is a well set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the essential character of the products, i.e plastic and that the heading 8507 deals with electric accumulators only. We find that the applicant has based his contention on the General Rules of Interpretation of the Customs Tariff Act, 1975 (GRls), more particularly Rule 2 and Rule 3 of the said Rules and hence it is necessary to delve into the rules of interpretation of the First Schedule to the Customs Tariff Act, 1975. However before taking up the GRIs for discussion it is necessary to look into the terms of headings along with the subheadings of the two competing headings i.e. heading 3926 and heading 8507 . The same is reproduced below for ease of reference; Chapter-39 Plastics and articles thereof Heading 3926 -Other articles of plastics and articles of other materials of headings 39.01 to 39.14 3926.10 - Office or school supplies 3926.20 - Articles of apparel and clothing accessories (including gloves, mittens and mitts) 3926.30 - Fittings for furniture, coachwork or the like 3926.40 - Statuettes and other ornamental articles 3926.90-Other Chapter 85-Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clude a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3. 3. When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter Notes , Though on initial perusal of the terms of heading 3926 it appears that the impugned articles fall under the heading 3926 - Other articles of plastics and articles of other materials of headings 39.01 to 39.14, we find that1 by virtue of the Chapter Note 2 [s) to the 'Chapter-39 - Plastics and articles thereof of the Customs Tarff Act, 1975 the impugned articles are not classifiable under heading 3926 The Chapter Note 2 [s| to the Chapter-39 - Plastics and articles thereof of the Customs Tarff Act, 1975 provides as follows; Notes. 1...... 2. This Chapter does not cover: ...................... (s) Articles of Section XVI (machines and mechanical ox electric appliances); 7.9. Hence, we find that though the impugned articles are all made of plastic (polypropylene / High density Polyethylene) the said articles are all used as parts of Lead acid battery. We find that the applicant themselves have submitted that the said articles 'are all used as parts are accessories for lead acid battery / electric accumulator'. The applicant has also submitted that the uses of each of the articles i.e. the said articles are used for lifting of lead acid battery, transportation p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced below for ease of reference; Section Note 2 of Section XVI of the CTA provides as follows; 3. Subject to Note 1 to this Section, Note 1 to Chapter 84 and Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 84.84, 85.44, 85.45, 85.46 or 85.47) are to be classified according to the following rules: (a) Parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 84.09, 84.31, 84.48, 84.66, 84.73, 84.87, 85.03, 85.22, 85.29, 85.38 and 85.48) are in all case to be classified in their respective headings; (b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 84,79 or 85,43) are to be classified with the machines of that kind or in heading 84.09, 84.31, 84.48, 84.66, 84.73, 85.03, 85.22, 85.29 or 85.38 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 85.17 and 85.25 to 85.28 are to be classified in heading 85.17. (c) All other parts are to be classified in heading 84.09, 84.31, 84.48, 84.66, 84. 73, 86 .03, 85.22, 85.29 or 85.38 as appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classified under the heading 8507 - Hence we are of the opinion that the impugned articles can be classified in terms or Rule 1 as even though the articles are not specifically described in the terms of the heading / subheading the classification is to be done as per the direction of the Section Notes or Chapter Notes. 7.14. We find that the applicant has based his arguments on Rule 2 and Rule 3 of the General Rules of Interpretation of the First Schedule to the Customs Tariff Act, 1975 and has stated that as per Rule 2 as well as Rule 3, the plastic articles in question can be classified only under heading 3926 and not 8507. As discussed above the impugned articles are classifiable in terms of Rule 1 of the said rules and reference to Rule 2 and 3 is not warranted. Rule 1 provides that the classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions: Further, Rule 2 provides for classification of goods unfinished or incomplete unassembled and disassembled goods and mixtures and combinations of material or substance which is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er No. 08/WBAAAR/APPEAL/2018 dated 31.01.2019 do not support the applicants contention as the classification of goods is governed by the principles set forth in the General Rules of Interpretation and the applicability of Section Notes / Heading Notes, In the instant case by virtue of Chapter Note 2(s) to Chapter 39 the impugned articles are not covered under Chapter 39, which is not the case for classifying the goods viz Agricultural Seedling Trays and Polypropylene Leno Bags under Chapter 39, as discussed in case laws mentioned at SI no. 2 and SI no. 3 above, respectively. 7.17. With regard to the second query of the applicant as to what is the rate of tax for the above said products under GST enactments we find as the impugned goods are to be classified under the heading 8507 and more particularly under sub heading 8507 90 , the applicable tax rate is 14% CGST as per SL No, 139 of Schedule IV of Notification No. 01/2017-C.T.(rate) dated 28.06.2017 as amended and 14% SGST as per SI No. 139 of Schedule IV of G.O. (Ms] No. 62 dated 29.06.2017 No. II(2)/CTR/532(d-4)/2017 as amended. We find that the applicant has contended that Sl.No. 139 does not even refer to parts of the electric ..... X X X X Extracts X X X X X X X X Extracts X X X X
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