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TMI Blog2018 (9) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... port on the classification of the said product considering the prevailing practice by other manufacturer and similar case of the applicant assessee pending before any other appellate forum etc. 2.1 The JAC vide their letter issued from F.No. Div-1/Misc./CGST/1/2018-19/87 dtd 13.04.2018 had concluded their report stating that the case of the applicant falls under the category of supply of services falling under heading 9989 of the scheme of classification of services covered under Sr. No. 27 of Notification No. 11/2017-CT(R). Defense Reply:- 3. The representative of the Applicant vide their letter dtd 15.05.2018 submitted that they had filed the captioned Advance Ruling application for decision on classification of printed leaflet manufactured by them at their Daman factory out of their own raw materials namely paper/ink with the contents supplied by the purchaser of leaflet to whom leaflets were sold by the Applicant on principal to principal basis. The issue to be decided as to whether same had to be considered as supply of goods falling under Chapter Sub-heading No.4901 attracting GST @5% as per Sr.No.201 of Schedule-1 of Noti.No.1/2017-CT (Rate) 28.6.2017 or as a supply of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply was defined at Section 2(90) as per which supply of goods or services which constitutes the pre-dominant element of composite supply and to which any other supply forming part of that composite supply was ancillary. In the given case mere supply of content by the customer was ancillary and the entire manufacturing cost of the products was comprising of own inputs used. Therefore, the principal supply was supply of goods on sale to customer on principal to principal basis. 3.3.3 They submitted that SAC 9989 covers only publishing matter attended on a fee or a contract basis and did not cover printing matter other than publishing matter. This was also clear from Para no.4 of CBEC Circular No. 11/11/2017-GST dated 20.10.2017 which reads as follows. In the case of printing of books, pamphlets, brochures, annual reports, and the like, where only content is supplied by the publisher or the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belong to the printer, supply of printing [of the content supplied by the recipient of supply] is the principal supply and therefore such supplies would constitute supply of servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awings bound in metal clip binding with covers on either side are books classifiable under Heading 49.01 of Customs Tariff Act, 1975 entitled to exemption under Notification No. 25/95-Cus. (para 4] 3 2001 (134) E.L.T. 156 (Tri. - Kolkata) = 2000 (11) TMI 681 - CEGAT, KOLKATA Advertising material - Folded leaflet titled "143 ways to export your sound" -Classifiable under sub-heading 4911.10 of Customs Tariff Act, 1975 corresponding to ITC (HS) Exim Code No. 491110.02 which required a specific license for importation, [para 3] 4 2001 (136) E.L.T. 1420 (Tri. - Mumbai) = 2001 (7) TMI 615 - CEGAT, MUMBAI Trade Directory - 'Yellow pages' - Tata press yellow pages containing list of paid advertisements, classifiable under Heading 49.11 of Customs Tariff Act, 1975 and not under Heading 49.01 ibid in view of Note 5 to Chapter 49 ibid - Goods not being 'commercial catalogue' also not classifiable under Heading 99.09 ibid, [paras 7,9,10] 5 2015 (328) E.L.T. 296 (Tri. - Mumbai) = 2015 (6) TMI 374 - CESTAT MUMBAI Printing Industry Products - Forms viz. hospital form, leave application form, reservations form, application forms for passes, application form for privileged tickets, etc. for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontaining particular type of contents - Envelope classifiable under specific Heading 4817 of Central Excise Tariff - Leaflets and printed materials when cleared, classifiable under other printed matter under Heading 4911 of Central Excise Tariff as products of printing industry, [para 5] 10 Noti.No. 2005 (186) E.L.T. 532 (S.C.) = 2005 (8) TMI 657 - SUPREME COURT OF INDIA Books - Printed books - Designs, drawings and plans in the form of FEEP (Front End Engineering Package) imported under know-how and basic Engineering Agreement whether classifiable under Heading 49.01/49.06 of Customs Tariff Act, 1975 read with Notification Nos. 107/93-Cus. and 38/94-Cus. or classifiable under sub-heading 4911.99 ibid - CEGAT disposed off appeals merely on the basis of Larger Bench decision in case of Parasrampuria Synthetics Ltd. v. Commissioner [(Tribunal)] = 2000 (5) TMI 66 - CEGAT, COURT NO. III, NEW DELHI and not considered rival contentions on merits nor recorded findings thereon - Two Judges Bench of Supreme Court reversed decision of CEGAT in case of Parasrampuria Synthetics Ltd. - HELD : Expression 'book' not being defined in Customs Tariff Act, natural and ordinary meaning of said expre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain writings on various sheets of papers one cannot ascribe the documentation to be a 'book'. The word 'book' has not been defined in the Act but the 'book' in common acceptation is a literary composition from which one may extend or advance his or her knowledge and learning, [paras 17,18] Words and Phrases - 'Plan' in common acceptation means a drawing or diagram made by projections on horizontal plane - Law Lexicon attributes it to be a design or a sketch and is a draft or form of representation and its synonyms are sketch and design - Notification No. 25/95-Cus. [para 6] Words and Phrases - 'Drawing' in common acceptance means and includes 'art of representing by line, delineation without colour or with single colour' -Corpus Juris Secundum defines it as a representation on a plane surface, by means of lines and shades - Notification No. 25/95-Cus. [para 7] Words and Phrases - 'Design' in popular parlance is used as a synonym with plan or 'figure' and includes a sketch - Design has within its ambit many facets including a criminal design which connotes on civil desire - Notification No. 25/95-Cus. [para 8] Words and Phrases - 'Book' in common acceptance is a literary composi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a specific description "printed books" as against Heading 49.11 "other printed matters", [paras 5, 6, 7] Interpretation of statutes - "Noscitur a Sociis" - Printed Books, Printed Matter -Classification - Approach of the Tribunal in Tractors and Farms Equipment Ltd.. 1993 (681 E.L.T. 234 (T) = 1993 (7) TMI 182 - CEGAT, NEW DELHI in applying doctrine of Noscitur a Sociis in relating the word "drawings" to the preceding expression "Works of Art" unsustainable - The words "works of art" do not constitute a genus or a category and hence the word "drawing" cannot derive its colour from them. - Heading 49.01 of the Customs Tariff Act, 1975. - In the absence of a genus or a category, the word "drawing" cannot draw its colour from the preceding words, namely, "work of art." They are separate and they should get their full meaning untrammelled by the word which precedes or succeeds, [para 10] Precedent Judgment under one statute - Printed Books - The plea that decision of the High Court and Supreme Court regarding "book" rendered under Income Tax Act cannot be of any assistance in dealing with the issue under Customs Act not acceptable particularly when the word "book" has not been def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he category of supply of service but the government was also needed to clarify as to how export obligation be fulfilled in the event of classification held under the category of services. 3.11. They finally requested that the applicants Advance Ruling application may be allowed by holding that the printed leaflets manufactured from own raw materials with contents supplied by customer and supplied on sale account to customers on principal to principal basis falls under the category of supply of goods falling under CSH No. 4901 attracting 5% GST as per Sr.No.201 of Schedule-1 of Noti.No.1/2017-CT (Rate) dated 28.6.2017. 4. Records of Personal hearing. To abide by the law of natural justice, the applicant was given chance to be heard in person and personal hearing in this case was fixed on 15.05.2018. However, the advocate of the applicant requested to postpone the date of PH on 16.05.2018. Their request was accepted and they were allowed to appear for PH on 16.05.2018. Shri Dinesh H.Mehta, advocate of the applicant appeared for the PH on 16.05.2018. During the PH he submitted that the supply in question is only of the goods and not of the service, as the recipient is only providin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are using content given by the customers, according to the department, they are prima facie engaged in producing customized printed materials and would be treated under "Supply of service' .... 5.3 We note from the said Pamplets/leaflets referred in the above para that the said pamplets have been printed to give the understanding of specific medicine. In normal parlance it is mandatory in the part of manufacturer of P.P.Medicaments to give the details of the product alog with actual product. This details is supplied in order to make aware the consumer about the contents, uses and side effects etc. of the product. Therefore, we find that primary nature of the product (leaflets) is to convey the message which is a form of Service and merits classification under SAC 9989. Our above findings can be seen from a sample leaflets printed below. 5.4 The applicant have relied upon circular No.11/11/2017-GST dtd. 20.10.2017 and has contended that SAC 9989 covers only the publishing matter attended on a fee or a contract basis and did not cover printing matter other than publishing matter. We ahve gone through the said Circular which read as under - Circular No. 11/11/2017-GST F. No. 354/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the printer, predominant supply is that of goods and the supply of printing of the content [supplied by the recipient of supply] is ancillary to the principal supply of goods and therefore such supplies would constitute supply of goods falling under respective headings of under Chapter 48 or 49 of the Customs Tariff. 4. Difficulty if any, in the implementation of the circular should be brought to the notice of the Board. Hindi version would follow. Yours Faithfully, Rachna Technical Officer (TRU) Email: rachna.irs@gov.in 5.4.1 We note that the Para 4 of the said Circular specifically clarifies that in the case of printing of books, pamphlets, brochures, annual reports, and the like, where only content is supplied by the publisher or the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belong to the printer, supply of printing [of the content supplied by the recipient of supply] is the principal supply and therefore such supplies would constitute supply of service falling under heading 9989 of the scheme of classification of services. Accordingly pamphlets, brochures annual reports etc are covered under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on its own, and therefore, in our considered opinion, the matter can now be allowed to be determined by the Assessing Authority in the light of the aforesaid observations." In view of the above, the said CBEC circular is legally binding on the departmental officers; I therefore, abide by the said CBEC Circular. 5.5.3 Further in the case of M/s Ratan Melting - 2008 (10) TMI 5 - SUPREME COURT OF INDIA decision Vs Binding nature of board circulars. the Circular No. 1006/13/2015-CX dated 21.09.2015 is issued in the context of decision of Apex Court in the case of Ratan Melting & Wire Industries, the decision although rules out that circulars contrary to the statutory provisions of law are not binding even on the departmental officers from the date of judgment but at the same time this decision also pronounces that even the revenue department has right to appeal against the clarifications issued by a board circular. This leads that the board circulars are binding on the revenue authorities till the provisions of the circular are not proved contrary to law by High Court or Supreme Court. 5.6 The applicant relied upon the Circular No. 1052/1/2017-CX, dtd 23.02.2017 to support their cla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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