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2021 (1) TMI 498 - AAR - GSTClassification of goods - rate of tax - HSN Code - Agro Waste Thermic Fluid Heater or Boiler and parts thereof - applicability of Sl. No.234 of Schedule I to Notification No.1/2017-Central Tax (Rate), dated 28.06.2017 and corresponding notifications issued under State GST law and IGST Act - HELD THAT:- As per the functioning/working of the impugned product, it is an energy generation device, which merits classification in Chapter heading 8402 of the First Schedule to the Customs Act, 1975 - the impugned product is classifiable under heading 8402 19 19 of the First Schedule to the Customs Tariff Act, 1975, being a Thermic Fluid Heater or Boiler. The Notification No.1/2017-Central Tax (Rate) dated 28.06.2017, as amended is relevant to the matter. This Notification has six Schedules wherein the listed goods attract the rate of CGST applicable to the respective Schedules. Schedule I comprises of goods which are chargeable to CGST @ 2.5%. Serial No. 234 covers the listed renewable energy devices and parts for their manufacture and these items attract 2.5% CGST - The vital condition for applicability of Sr. No. 234 of Notification No. 1/2017- Central Tax (Rate) is that the devices or parts thereof should be those listed in column 3 thereto. The applicant has claimed their device as ‘Waste to Energy Plant/ Device’. The inescapable inference that can be drawn from the entry is that the energy should be inevitably created from waste. In other words the fuel used for obtaining energy should inevitably be ‘waste’. The product has been presented by the applicant as ‘Thermic Fluid Heater’ in their written submission and during the course of personal hearing a brochure was submitted wherein the product has been categorised as ‘Biomass Fired Boiler’. The applicant has not clearly specified the functionality of the product and it becomes very difficult to classify the product merely going by the generic interpretation of the name allotted to the product. The product Thermic Fluid Heater/ Boiler gets classified under Chapter 8402 19 90 in terms of the description of the goods as listed under the respective head of the First Schedule to the Customs Tariff. However, the applicability of Sr. No. 234 of Notification No. 1/2017- Central Tax (Rate) essentially depends on the nature of fuel used for such energy device. The products matching the description of the product under consideration use fuel such as Imported coal, rice husk, lignite, Coal, wood and briquette. None of these are non-conventional but are purely conventional fuels used for generation of heat or steam. As discussed above, the crucial factor is that the heat or steam should have been generated by use of a waste/ non-conventional element so as to qualify under the head ‘Waste to energy plants /devices’. However, the technical specifications available on the website of the applicant do not indicate that their product is generating energy from waste. Rather the literature indicates that the energy is generated by use of conventional elements. In the instant case, it is found that the applicant has presented partial facts and deliberately chosen to remain silent on the vital aspect regarding the fuel used in their energy devices/ plants. This situation is akin to naming one’s pet cat as ‘Tiger’ and asking someone the classification of the pet by referring to its name rather than the technical characteristics. Such analysis by merely referring to a name would lead to wrong conclusions. To avoid such erroneous conclusions, there is no option but to refer to the technical specifications of the products of the applicant as available on their official website. Reference to such technical specifications leads to the inescapable inference that the fuel used for generation of energy is not ‘waste’ but conventional energy generating elements. Resultantly, we find that the rates as specified at Sr. No. 234 of Notification No. 1/2017-Central Tax (Rate) will not be applicable to the product under consideration. Applicable rate of tax - HELD THAT:- It is to mention that the said product attracts rate of tax of 9% CGST + 9% SGST as applicable under Sr. No. 310 under Schedule III of Notification No. 1/2017-Central Tax (Rate) read with the corresponding notification under the Gujarat GST Act in case of Intra-State supply. Likewise, the applicable rate of tax will be 18% IGST under Sr. No. 310 under Schedule III of Notification No.1/2017- Integrated Tax (Rate) in case of Inter-State supply. Though, the applicant has claimed the benefit of Sr. No.234 of Notification No.1/2017-Central Tax (Rate), they have not produced any documentary evidence such as supply contracts/order for WTEP from the concerned authorities to show that said Agro Waste Thermic Fluid Heater or Boiler is supplied for use in the initial setting up of renewable energy plants and devices including “waste to energy plants/devices”. Thus, it is seen that the applicant has chosen to omit the vital facts regarding the nature of fuel used for generation of energy and whether the said device is used for initial set-up of renewable energy plants. By providing such partial information, they have sought to claim a decision in their favour.
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