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TMI Blog2024 (9) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... uch as lubricants, foaming agents, foam regulators, heat stabilizers, etc. PVC resin is used as a binding agent. Hence, the product is a Fibreboard and is more aptly classifiable under CTH 441193 as 'Others' as it is not a Medium Density Fibreboard. Further classification will depend on the individual properties of the product. Having decided that the NFC Board manufactured by the applicant with mam content as Rice husk, will more appropriately be classified under CTH 441193, the applicable rate of GST is taken up for consideration. The rate of CGST is notified vide Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 as amended in respect of goods and that is notified vide Notification No. vide G.O. (Ms) No. 62 dated 29.06.2017 as amended - the Rice Husk Hoard or fibre board manufactured from agricultural crop residues, irrespective of the Chapter under which the same are classified, are subjected to CGST @ 6% and 6 % SGST. - SRI. K. RAVI SANKAR AND SRI. B. LAKSHMI NARAYANA MEMBER Represented by: Sai Makarandh, Advocate ORDER (Under sub-section (4) of Section 98 of Central Goods and Services Tax Act, 2017 and sub-section (4) of Section 98 of Andhra Pradesh Goods and Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unded with other ingredients in a high speed mixer. The compound resin is fed to the double screw extruder where the inserts and T die body for the required boards sizes are fitted. The natural fibers and PVC compounds arc then passed through a heated chamber and they get melted under the compression of the screw and temperature of the barrel. Sizing: The compounded NFC that is coming out from the extruder T DIE is cooled in the sizing operation by sending it to the calibration table. Traction: The next operation needed after sizing is traction. The traction unit is required for continuous haulage of the NFC boards being extruded by the extruder. Cutting: The last operation needed is cutting. After the traction unit there will be a continuous running saw blade which will cut the board or profile after the board or profile reached the required length. After the cutting the boards or profiles arc now finished products and the same arc packed and ready for dispatch. In view of the above, it is respectfully submitted that the applicant manufactures NFC boards which are in the form of: NFC Boards NFC Doors NFC Frames 3. Questions raised before the authority: The applicant sought advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above table must be levied on intra-State supplies of goods, the description of which is specified in the corresponding entry in column (3) of the said Schedules, falling under the tariff item, subheading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedules. 6.3 The rate of GST for goods falling under Schedule II of the said Notification is subject to 6% CGST 6% SGST. As per Serial No 92 of the Schedule, specified goods falling under Chapter 44 or any other Chapter are subject to 6% CGST 6% SGST and the Fiber Board is specifically mentioned under the said serial no. 92 (h). 92 44 or any Chapter The following goods, namely: - a. Cement Bonded Particle Board; b. Jute Particle Board; C. Rice Husk Board; d. Glass-fibre Reinforced Gypsum Board (GRG) e. Sisal-fibre Boards; f. Bagasse Board; and g. Cotton Stalk Particle Board h. Particle/fibre board manufactured from agricultural crop residues 6.4 The applicant wish to submit that, Wood and Articles of Wood, etc., is classified under Chapter 44 and Particle board, Oriented Strand Board (OSB) and similar board (for example, wafer board) of wood or other ligneous materials, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rc less than twice as long as they arc wide. These wafers are mixed with binders (usually waterproof) such as isocyanate or phenolic resins, interleaved together and laid down randomly, thus forming a thick mat. The mat is subjected to heat and pressure producing a solid, uniform, structural board having high strength and water resistance 6.11 With regards to other ligneous material whether or not agglomerated with resins or other organic binding substance (other than specified boards), the Hon'ble Tribunal, Bangalore in M/s. Padmavathy Panel Boards ... vs The Commissioner of Central [2001 (132) ELT 36 Tri Bang] held that: We have heard both sides and considered the submissions and find- (a) HSN Note relating to particle boards prescribed it may also be produced from other ligneous materials such as fragments obtained from Bagasse, Bamboo, Cereal Straw or from flax or hemp shieves. We therefore cannot concur with the submission that boards manufactured out of Rice Husk would be excluded from the purview of particle boards following under Chapter Heading 47.06 as HSN Note did not limit the items, but only gives the example. Tariff Entry 44.06 is very clear, it reads as Particle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e them their essential characters in terms of their intended uses. Thus, for example, a building panel used as a structural element in roofing, wall or floor applications and consisting of a external layer of particle board and layer of insulating material of plastics, is classified in heading 44.10, whatever the thickness of layer of plastics, since it is rigid, strong, wood portion which allows the panel to be used as a structural element, the plastics having a subsidiary insulation function. On the other hand, a panel in which a wood backing serves, merely as a support for an exterior surface of plastic is, in most cases, classifies in Chapter 39. 6.14 Thus, the sole purpose of using PVC by the applicant is to bind the rice organic material, fillers and other additives in order to get the desired output i.c the NFC board. PVC has a very minimal dominance in the making of the NFC board. Hence, the NFC will fall under Heading 44.10 as per the above explanation of the HSN Note. 6.15 The applicant submits that the heading 44.10 does not cover the following: a) Plates or strips of plastics containing wood flour as filler (Chapter 39). b) Veneered particle board and similar board (for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted in 2020 (2) TMI 32 wherein it was held as follows: From the above, it is seen that Fibreboard manufactured by bonding fibres extracted from wood chips or other lingo-cellulose material. They are bonded together by adding thermosetting resins and find application such as furniture, interior decoration and in building are classified under this heading. The product in hand is a 'Natural Fibre Composite Board' with density of ranging from 0.65 -0.8g/Cm3(as given in the brochure) and finds application in furniture, interior decoration, building, etc. In this case as per the manufacturing process, fibres are extracted from the rice husk and then mixed with lime powder (calcium carbonate), processing additives such as lubricants, foaming agents, foam regulators, heat stabilizers, etc. PVC resin is used as a binding agent. Hence, the product is a Fibreboard and is more aptly classifiable under CTH 441193 as 'Others' as it is not a Medium Density Fibreboard. Further classification will depend on the individual properties of the product Having decided that the NFC Board manufactured by the applicant with main content as Rice husk, will more appropriately be classified u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s manufactured along with the samples of the NFC boards for further examination. 8.3 The applicant submitted that their NFC boards are primarily made out of coconut husk or rice husk powder. Detailed composition of our NFC is provided hereunder: Items Qty (in %) Coconut Shell or Rice Husk, Powder (Natural Fibre) 30 Calcium Carbonate (Lime powder) 13 Recycling waste 15 PVC Resin 29 Processing aids such as thermos-coupling agents, etc. 8 Lubricant 5 Total 100 With respect to the presence of PVC resin in the NFC, it is respectfully submitted and as explained in our submissions in the application, PVC is only used as a binding agent and the primary characteristic and usage of our boards are still that of wood profiles. In this regard, please find sample pieces enclosed with the present letter that will conclusively establish the same. 9. Discussion and Findings: We have carefully gone through the submissions made by the applicant in the advance ruling application, it is seen that the applicant M/s TraPlast Industries Pvt Ltd., Anantapur, Andhra Pradesh registered under GST Act with registration 37AAHCT6584E1ZY, under administrative control of State and on the rolls of Guntakal Circle, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it is seen that Fibreboard manufactured by bonding fibres extracted from wood chips or other lingo-cellulose material. They are bonded together by adding thermosetting rosins and find application such as furniture, interior decoration and in building are classified under this heading. The product in hand is a 'Natural Fibre Composite Board' and finds application in furniture, interior decoration, building, etc. In this case as per the manufacturing process, fibres arc extracted from the rice husk and then mixed with lime powder (calcium carbonate), processing additives such as lubricants, foaming agents, foam regulators, heat stabilizers, etc. PVC resin is used as a binding agent. Hence, the product is a Fibreboard and is more aptly classifiable under CTH 441193 as 'Others' as it is not a Medium Density Fibreboard. Further classification will depend on the individual properties of the product Having decided that the NFC Board manufactured by the applicant with mam content as Rice husk, will more appropriately be classified under CTH 441193, the applicable rate of GST is taken up for consideration. The rate of CGST is notified vide Notification No. 01/2017-C.T.(Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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