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2018 (9) TMI 690

ng under Chapter Sub-heading No.4901 or as a supply of service falling under SAC No.9989? - Held that:- It is on record that the applicant have submitted one of the sample of a printed pamphlet along with their defence reply which is made for “Norethindrone tablets USP,0.35 mg”. On simple reading of the said pamphlet it appears that the buyer of the product wanted to convey certain message through the said pamphlet which is supplied alongwith their product. In fact, the product pamphlet in itself is nothing but a media to convey the message and the message or script what is to be printed, is supplied by the buyer of the product. The said supply is a mixed supply as per Section 2(74) of the CGST Act, 2017 and in the mixed supply dominance is the message printed on the pamphlet. - Para 4 of Circular 11/11/2017-GST dtd. 20.10.2017 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 supplie .....

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t 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 service falling under SAC No.9989 attracting GST @12% as per Sr.No.27 (1) of Noti.No.11/2017-CT (Rate) dated 28.6.2017, as amended (GST rate 18% up to 12.10.2017 and thereafter 12%) 3.1 They submitted that since 2005 they were clearing printed leaflets on outright sale basis and clearing the same under CSH No.4901 as exempted being not chargeable to duty. Accordingly w.e.f. 1.7.2017, the Applicant continued supplying the same under the category of goods falling under Chapter sub-heading No. 4901. However, w.e.f. 29.8.2017 the Applicant after intimating the Assistant Commissioner of CGST & CE vide their letter dated 29.8.2018 started supplying the same under the category of service falling under SAC No.9989. This was done on account of clarification issued by All India Federation of Master Printer through their letter dated 8.8.2017 circulated to the members whereby it was clarified that as per the understanding given .....

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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. 3.4 They submitted that as per the above clarification the printed matter will fall under SAC No.9989 when the content was supplied by the publisher or a person who owns users right to the intangible inputs. The SAC No.998911 covers publishing on a fee or a contract basis and SAC No. 998912 covers printing and reproduction service of recorded media on a fee or a contract basis. There was no coverage of printed leaflet in SAC No.9989. Accordingly Sr.No.27 (1) of Noti.No.11/2017-CT (Rate) only covers publishing matter like news paper/books/generals/periodicals made on the basis of content supplied by publisher and Sr.No.27(2) inter-alia covers printing and re-production services of recorded media. 3.5 They submitted that accordingly printed leaflet manufactured with their own raw materials and as per content supplied by customer (other than publisher .....

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) 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 use by Central Railway for their own day to day function as captive use, are product of printing industries, hence, classifiable under Heading 4901 of Central Excise Tariff Act, 1985 and excluded from Chapter 48 ibid - Not dutiable - Goods can be used by Central Railway along and can neither be used nor shall be useful for any other person, hence, not marketable - Goods not capable of being bought and sold, cannot be commercially known as marketable - Revenue not discharged burden of test of marketability of the product - Impugned order set aside - Section 3 of Central Excise Act, 1944. [para 5] 6 2017 (6) G.S.T.L. 198 (Tri. - All.) = 2017 (11) TMI 812 - CESTAT ALLAHABAD Carbon leaflets/Money receipts - Classification of - Product being a printed sheet running in length and used by specific customer for specified purpose classifiable under Chapter 49 of Central Excise Tariff as product of printing industry and not under Chapter 48 ibid, [paras .....

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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 expression to be kept in view - Some of tests applied in Parasrampuria s case not relevant and appropriate - HSN explanatory notes indicating classification under Heading 49.01 ibid, relevant - Specific or basic Heading is 49.01 and residuary entry is 49.11 and priority to be given to main entry and not residual entry - Matter remanded to CESTAT for reconsideration on all points in the light of observations made by Court, [paras 50, 51, 52, 53, 54, 55, 57,60, Words and Phrases - Book - Expression book not being defined in Customs Tariff Act, 1975 natural and ordinary meaning of said expression to be kept in view, [para 50] Classification of goods - HSN explanatory notes are relevant - Drawings, designs and plans fall under Heading 49.01 of Customs Tariff Act, 1975 and not under sub-heading 4911.99 ibid as per HSN explanatory notes, [para 54] Classification of goods - Priority to be given to main entry and not residual entry - Drawings, designs and plans - Speci .....

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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 composition from which one may extend to advance his or her knowledge and learning - SI. No. 10 of Notification No. 25/95-Cus. [para 17] Words and Phrases - Word Manual means and implies a small book for handy use and includes a reference book, a hand-book as also a text book and does not cover a product of technology transfer between two countries - SI. No. 10 of Notification No. 25/95-Cus. [para 18] Interpretation of statute - Legislature intends to ascribe the ordinary common parlance and meaning to the words used therein, [para 18] 12 2000 (119) E.L.T. 211 (Tribunal - LB) = 2000 (5) TMI 66 - CEGAT, COURT NO. III, NEW DELHI Printed matter - Printed book - Material imported in 97 volumes, each volume a collection of sheet paper containing printed matter, each securely fastened together at one end, and protected by two covers, to be treated as book only as each volume looks like a book and hence classifiable as printed book under Heading 49.01 of Customs Tariff Act, 1975 and not under 4911.99 .....

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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 defined in the Customs Act. 1962 - [1999 (112) E.L.T. 353 S.C.] = 1999 (8) TMI 920 - SUPREME COURT OF INDIA relied. - A book, as understood by a common man, cannot change its character depending on the different statutes under which they are dealt with. This is more so when it is seen that the word book has not been defined under Customs Act, 1962. They submitted that as per the ratio of the above circulars/ judgments, the concept of principal supply for the purpose of Section 2(90) of the CGST Act, 2017 had to be decided and thereby the principal supply was supply of goods only and had no connection with supply of service. 3.7 They submitted that for printed matters, SAC 9988 or 9989 was relevant. SAC 9988 covers only when job work was attended on physical inputs (goods) owned by others. In this case there was no job work on inputs (goods) owned by the others and manufacturing of printed leaflet was with own inputs (goods). SAC 9989 only covers publishing matters which was evident from para No.4 of CBEC circular No.11/11/ .....

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n 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 providing the content to be printed. Further, as per the Customs Tariff Act, applicable to GST, the items in question are classified as goods in the Customs Tariff Act. The supply in question will therefore, not fall under the SAC 9988 or SAC 998912 and will only be considered as supply of goods. This is also applicable as per the CBEC Circular dtd 24.10.2017. He also made further written submission and provided the copies of various case laws in their defense. He finally requested that the product in question may be considered as supply of goods only & not as service. 5. Discussion and Findings In the present case we, the members of Advance Ruling, have to decide as to whether the goods/service (under question) has to be considered as supply of goods falling under Chapter Sub-heading No.4901 or as a supply of service falling under SAC No.9989. 5.1 To decide the issue, it is in the interest of justice to discuss the nature of product in question and its use. As per the evidence available before us, the applicant is engaged in the process of .....

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ing matter other than publishing matter. We ahve gone through the said Circular which read as under - Circular No. 11/11/2017-GST F. No. 354/263/2017-TRU Government of India Ministry of Finance Department of Revenue Tax research Unit **** North Block, New Delhi 20th October 2017 To, The Principal Chief Commissioners/Chief Commissioners/ Principal Commissioners/ Commissioner of Central Tax (All) / The Principal Director Generals/ Director Generals (All) Madam/Sir, Subject: Clarification on taxability of printing contracts Requests have been received to clarify whether supply of books, pamphlets, brochures, envelopes, annual reports, leaflets, cartons, boxes etc., printed with design, logo, name, address or other contents supplied by the recipient of such supplies, would constitute supply of goods falling under Chapter 48 or 49 of the First Schedule to the Customs Tariff Act, 1975 (51of 1975) or supply of services falling under heading 9989 of the scheme of classification of services annexed to notification No. 11/2017-CT .....

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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 the services and the applicant is engaged in printing of pamphlets etc. hence, the correct classification of the product of the applicant is 9989. It is worth mention here that printed Pamplets/leaflet are useless except otherwise used in the use specific purpose of giving knowledge of the particular medicine to its user. Therefore, dominance of supply in the said goods is proved which lead its correct classification under the supply of service (SAC 9989) 5.5 In view of the above, we hold that the CBEC vide Circular No. 11/11/2017-GST dtd 20.10.2017 had clarified the ambiguity arisen out of simultaneous prevalence of goods or service in the printing industry and the dominance of service in the mix supply.. 5,5.1 The Circulars issued by CBEC are commonly binding on the departme .....

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ficers 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 claim, However, on going through the contents of the said Circular it is noted that the referred Circular belong to pre GST era, hence, not applicable in the GST cases. Similarly, it is further noted that the applicant in their defence relied upon plethora of judgments while contending that their product is goods. We have gone through all the cases and found no force in any of the judgment applicable in their defence. Further the crux of all judgment referred by the applicant either pertain to Central Excise or Customs cases and the circumstances /issue referred in the cases relied are different from the issue in hand, hence not applicable. Thus we find that the judgments relied upon by the applicant assessee are not a .....

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