TMI Blog2018 (12) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... he pH factor, inorganic / organic components etc., as done by the impugned Mridaparikshak / Minilab - Inasmuch as the Mridaparikshak / Minilab is found to be classifiable under Heading 9027, the plea of appellants for classifying them under Heading 8201 remains further negated by Note I (h) to Section XV which precludes instruments/apparatus of Section XVIII (under which Chapter 90 falls) from being classified under Section XV, which includes Chapter 82. Thus, Mridaparikshak-MiniIab is rightly classifiable under Heading 9027 of the Tariff as held by the Adv. Ruling Authority and not under Heading 8201 as claimed by the appellant. Classification of Refill Reagents - Held that:- Refill Reagents are not classifiable under the said Heading since these do not qualify to be considered as ‘Hand tools’ by any means. Appellants have also not put forth any separate grounds/contentions in support of their claim for classifying the Refill reagents under Heading 8201 - The appellants have, either in the grounds of appeal or further submissions, not disputed either the finding of the lower Authority that the Refill Reagents are solely or principally for use with the Mridaparikshak Minilab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortunity of being heard. 2. Under Section 103 (1) of the Act, this advance ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only (a) On the applicant who had sought it in respect of any matter referred to in sub-Section (2) of Section 97 for advance ruling; (b) On the concerned officer or the jurisdictional officer in respect of the applicant. 3. Under Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the original advance ruling have changed. 4. Under Section 104 (1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-Section (l) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made. ******* 1. The subject appeal has been filed under Section 100(1) of the Telangana Goods and Services Tax Act, 2017 (hereinafter referred to as TGST Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illing reagents respectively. The appellants had stated that the impugned goods were used for determining / verifying soil health in terms of the parameters i.e., soil pH, Electrical Conductivity, Organic Carbon etc. The appellants claimed that the impugned goods were covered by the exemption entry at Sl.No.137 of Notification No. 2/2017 -Central Tax (Rate) dated 28-6-2017 1 which reads as follows: Sl. No. Chapter/Heading/Subheading/Tariff item Description of Goods Rate 137 Schedule- of Notification No.2/2017 Central Tax (Rate) 8201 Agricultural implements manually operated or animal driven i.e. Hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry Nil The appellants contended that the Minilab and Refill Reagents were exclusively used for Agriculture and hence fall for consideration as Agricultu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated on the basis of details / explanation given by a proper technical person of the company. The hearing was accordingly adjourned. 6.2 . At the next hearing held on 17-9-2018, Sri T.S.R. Murthy, Senior Research Officer (Technical person) of the company appeared, apart from the representatives of the appellant and Department, mentioned above. Both the parties filed written submissions; the appellants also submitted copies of certain documents viz., a leaflet of the item Mridaparikshak , Operation manual/Working Protocol for Mridaparikshak-Minilab , Soil Health Card apart from a compilation of case-laws relied upon by them. 6.3. Sri T.S.R. Murthy, the technical person explained the various aspects pertaining to the impugned goods including the nature, composition, functionality, method manner of usage, form of supply etc. in detail, as follows: (a) He produced before the Bench the main equipment Mridaparikshak and explained that the product described as Mridaparikshak - MiniLab for Agriculture Soil Testing as per the tax invoice on page 29 of the appeal booklet is actually a set of things / instruments / items / reagents (which are as shown in the photograph / ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... soil sample, the different parameters are measured and the result is printed on the Soil Health Card. He further explained that depending on the values of the various parameters, the system gives recommendation in terms of fertilizers needed by the farmers. (c) On further query from the Bench, he explained that some parameters such as pH, EC (Electrical Conductivity) and OC (Organic Carbon) are directly measured by the system whereas some others for example Available Nitrogen are thereafter internally calculated based on in-built logic/software. For example, the value of the parameter Available nitrogen is calculated on the basis of the measured Organic Carbon . He explained that the details in this regard are given in the manual filed by them. With this, the technical person concluded his deposition. (d) The Counsel mentioned that though it is true that the item Mridaparikshak is measuring various parameters of the soil and in fact the name itself i.e, Mridaparikshak means tester of soil , but the fact remains that the item is working on soil, that the item is used for farmer, that the item is used for agriculture, and that therefore going by the end-use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ridaparikshak - Minilab for Agriculture Soil Testing merit classification under Heading 8201 of the Tariff as claimed by the appellant; or they are classifiable under Heading 9027 ibid as held by the Adv. Ruling Authority ? (ii) Whether the goods viz., Refill Reagents merit classification under Heading 8201 of the Tariff as claimed by the appellant; or they are classifiable under Heading 9027 ibid as held by the Adv. Ruling Authority ? (iii) Whether the goods i.e, Mridaparikshak-Minilab as also the Refill Reagents are covered by the entry at Sl.No. 137 of Notification No. 2/201 7-Central Tax (Rate) dated 28-6-2017 with NIL rate of tax as claimed by the appellant; or they are chargeable to 9 % CGST + 9 % SGST as per the impugned Order? 9. In order to determine the aforesaid questions, first the nature, usage etc. of the goods involved (hereinafter also referred to as impugned goods ) are to be considered, followed by the relevant Tariff entries and statutory provisions etc.; and thereafter, the applicability or otherwise of the exemption-Notification entry to the impugned goods. [Applicability/otherwise of the case-laws cited by appellant is dealt at appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the same is a secret, however, these are identified with assigned description as Reagent I to Reagent 42 on the labels affixed to the reagent bottles. As further explained during the said hearing, the first supply of the Minilab includes the Reagents, while subsequent refills are supplied depending on requirement. 11.1. Under GST statute, levy / rates of tax in respect of supplies consisting of two or more supplies of goods, is governed by Section 8 of the Act read with the definitions of the terms composite supply , principal supply and mixed supply as given in the Act. In the instant case, admittedly the Soil Testing Minilab consists of the main instrument along with various other accessories etc., as supplied. However, the aforesaid aspect of whether supply of Minilab is a composite supply or mixed supply, does not find any mention / discussion / examination in either the proceedings before the Adv. Ruling Authority or the impugned order nor also put forth before us, by either parties to the appeal. 11.2. As seen, the appellants had, in their initial application sought a single classification under Heading 8201 for the Agriculture Soil Testing Minilab as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries pertaining to the two competing entries in the appeal i.e, Heading 8201 claimed by appellant and Heading 9027 as per the lower Authority s ruling, merit a reference. The same read as follows: SECTION XV BASE METALS AND ARTICLES OF BASE METAL Notes : 1. This Section does not cover : (i) instruments or apparatus of Section XVIII 5 , including clock or watch springs; Chapter 82 Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal Notes : 1. Apart from blow lamps, portable forges, grinding wheels with frameworks, manicure or pedicure sets, and goods of heading 8209, this Chapter covers only articles with a blade, working edge, working surface or other working part of: (a) base metal; (b) metal carbides or cermets; (c) precious or semi-precious stones (natural, synthetic or reconstructed) on a support of base metal, metal carbide or cermet; or (d) abrasive materials on a support of base metal, provided that the articles have cutting teeth, flutes, grooves, or the like, of base metal, which retain their identity and function after the application of the abrasive. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truments or apparatus of the same heading (including a machine, instrument or apparatus of heading 9010, 9013 or 9031) are to be classified with the machines, instruments or apparatus of that kind; (c) all other parts and accessories are to be classified in heading 9033. 9027 Instruments and Apparatus for physical or chemical analysis (for example, polarimeters, refractometers, spectrometers, gas or smoke analysis apparatus); instruments and apparatus for measuring or checking viscosity, porosity, expansion, surface tension or the like; instruments and apparatus for measuring or checking quantities of heat, sound or light (including exposure meters); microtomes 9027 10 00 - Gas or smoke analysis apparatus u 9027 20 00 - Chromatographs and electrophoresis instruments u 9027 30 - Spectrometers, spectrophotometers and spectrographs using optical radiations (UV, visible, IR) : 9027 30 10 --- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence only; for legal purposes, 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: 2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished articles has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by viltue of this rule), presented unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include 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 principles of rule 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation of the phrase other tools of a kind used in agriculture, . . The said principle specifies that general terms following particular expressions take their colour and meaning as that of the preceding expressions . Application of the said principle is reflected / explained in the decisions of Hon ble Supreme Court in Collector of C.Ex., Bombay vs Maharashtra Fur Fabrics Ltd. 2002 (145) E.L.T. 287 (S.C.) = 2002 (9) TMI 108 - SUPREME COURT OF INDIA , CCE, Chandigarh vs Shital International 2010 (259) E.L.T. 165 (S.C.) = 2010 (10) TMI 19 - SUPREME COURT OF INDIA and Grasim Industries Ltd., vs Collector, Customs, Bombay 2002 (141) E.L.T. 593 (S.C.) = 2002 (4) TMI 52 - SUPREME COURT OF INDIA . Relevant extracts from the said decisions are reproduced, as follows: Maharashtra Fur Fabrics Ltd. 6. A careful reading of the proviso to the notification would show that by resorting not only to the process of bleaching, dyeing, printing, shrink proofing, tentering, heat-setting, crease-resistant processing, but also to any other process or any two or more of these processes , the respondent would lose the benefit of the exemption. It is a well established pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds in a statute are presumed to be superfluous. The rule applies only when (1) the statute enumerates the specific words, (2) the subjects of enumeration constitute a class or category, (3) that class or category is not exhausted by the enumeration, (4) the general terms follow the enumeration and (5) there is no indication of a different legislative intent . (ii) The guidelines in Grasim Industries supra, are found to be squarely fulfilled by the description against Heading 8201 . The opening phrase Hand tools i.e, primarily specifies the class/category/genus of goods falling therein as Hand Tools and none else. The items specifically enumerated thereafter i.e, Spades.. onwards to timber-wedges all belong to the category of handtools. The said enumeration is not exhaustive in itself. The subsequent phrase and other tools of a kind... is a general expression following the specific enumeration. The Heading-description nowhere indicates a different legislative intent that goods other than hand tools, can fall under the said Heading. In fact though the Heading-description uses the words other tools , the description against the Tariff-item No. 8201 90 00 Uses the wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstrument / the Minilab are not classifiable under Heading 8201 as claimed by the appellants. 16.1. Coming to the question of classification of the Minilab under Heading 9027 as held by the Adv. Ruling Authority, we find as follows: (i) Description against Heading 9027 reads as follows: Instruments and apparatus for physical or chemical analysis (for example, polarimeters, refractometers, spectrometers, gas or smoke analysis apparatus); instruments and apparatus for measuring or checking viscosity, porosity, expansion, surface tension or the like; instruments and apparatus for measuring or checking quantities of heat, sound or light (including exposure meters); microtomes . (ii) The instruments / apparatus mentioned in the above description do not specifically include those used for either soil testing or for determination of the parameters viz., soil pH, Electrical Conductivity, Organic Carbon or Available Nitrogen etc., which is the admitted function of the impugned Mridaparikshak instrument / Minilab. However, the said Heading-description is not exhaustive as seen from the words / phrases used therein i.e., for example , or the like . (iii) In the Op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w.r.t. the method/manner of usage of the Mridaparikshak instrument / Minilab during the hearing before us, we conclude that the said goods are designed, intended and used for conducting chemical analysis . As such, the same would rightly fall within the description Instruments for physical or chemical analysis and hence rightly classifiable under Heading 9027. 17.1. The appellant s contentions against the classification of the Minilab under Heading 9027 as stated in their grounds of appeal, are that these are not instruments for checking quantities of heat, sound or light as treated by the Adv. Ruling authority and further that it is neither a chemical or measuring equipment . And during the hearing before us, it was contended that Heading 9027 is not applicable since it does not contain the phrase soil-testing . 17.2. We do not find merit in the above contentions. The mere non-appearance of phrase soil testing in Heading 9027 is of no relevance. As per the clearly evident elements detailed above, the impugned Minilab is admittedly an instrument for scientific (physical / chemical) analysis of the soil. As such, it remains specifically covered in the Heading 902 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MI 93 - SUPREME COURT OF INDIA , CCE, Hyderabad vs. Bakelite Hylam Ltd., 1997 (091) ELT 0013 (SC) = 1997 (3) TMI 598 - SUPREME COURT Commissioner of C.Ex., Goa vs Phil Corporation Ltd. 2008 (223) ELT 9 (SC) = 2008 (2) TMI 3 - SUPREME COURT OF INDIA etc. [Though these decisions are rendered in the context of Central Excise Tariff, it is the substantive principle of law laid down therein which is applicable to the instant case, since there can be no dispute that the Customs Tariff (which is made applicable by the GST-rate Notification) is based upon and aligned with HSN]. Hence, we find that reference to HSN Notes by the Adv. Ruling Authority for deciding the classification of the Mridaparikshak / Minilab, is legally correct and tenable. 19. Inasmuch as the Mridaparikshak / Minilab is found to be classifiable under Heading 9027, the plea of appellants for classifying them under Heading 8201 remains further negated by Note I (h) to Section XV which precludes instruments/apparatus of Section XVIII (under which Chapter 90 falls) from being classified under Section XV, which includes Chapter 82. 20. In view of the above discussion, the first question for our determination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. As such and on this count alone, the decision in the impugned Order classifying the Refill Reagents under Heading 9027 merits to be upheld. 23.3. Notwithstanding the same, on our independent examination, we find ourselves in agreement with the decision of the lower Authority in this regard, in view of the following: (i) The Refill Reagents, said to be chemicals/chemical substances, however, as supplied to the customers, have no identity whatsoever by any specific name, description or contents etc., so as to show their actual nature / composition. Their only identity is in terms of the Sl. No.s assigned i.e, Reagent No. I to Reagent No. 42; and as mentioned above, the Mridaparikshak Minilab Operations Manual specifies their usage by a reference to these assigned Sl.Nos. only. (ii) Thus, the Refill Reagents have the only identity as items/accessories to be used with the Mridaparikshak instrument / Minilab and none else; for the customers/recipients who use them. Evidently, in the absence of the actual name/composition etc. , the Refill Reagents cannot be put to any other use. (iii) Note 2 to Chapter 90 specifies criteria, under three clauses (a) to (c), for clas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case that the Refill Reagents are suitable for use solely and principally with the Mridaparikshak Minilab, rather it is the only use and none otherwise. Hence, classification of Refill Reagents would be squarely covered in terms of Note 2(b) to Chapter 90. The residuary clause (c) of Note 2 is therefore not relevant. 24. In view of the above, with regard to the second question for our determination, we hold that the Adv. Ruling Authority s decision of classifying Refill Reagents under Heading 9027 is correct and merits to be upheld. 25.1. The next question for determination is whether the exemption entry Sl.No. 137 of Notification No. 2/2017-Central Tax (Rate) dated 28-6-201 7 is applicable to the impugned goods. The said entry contains the relevant Heading as 8201 ; while corresponding description of goods is given with the phrase Agricultural implements manually operated or animal driven i.e. preceding the same wording as per the Tariff heading 8201 i.e, Hand tools, such as ... or forestry . 25.2. By considering the Heading 8201 specified in the entry alone, the impugned goods would not get covered therein for exemption, in view of our discussion and fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Indo National Ltd vs. State of Andhra Pradesh 1987 64 STC 382 AP Hon ble High Court of Andhra Pradesh Classification of Dry Cells under First Schedule to the Andhra Pradesh General Sales Tax Act. 4. State of Andhra Pradesh vs. Karnatakam Govindayya Setty And Sons Hon ble High Court of Andhra Pradesh Whether vermicelli popularly called shevaya is maida falling within entry 60 of First Schedule to the Andhra Pradesh General Sales Tax Act, 1957. 5. Jaya Food Industries Pvt Ltd vs Commercial Tax Officer, Nampally Circle, Hyderabad = 1987 (8) TMI 439 - ANDHRA PRADESH HIGH COURT Hon ble High Court of Andhra Pradesh Whether vermicelli manufactured and sold under the trade name Bambino vermicelli falls under entry 129A of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957. 6. Godrej Agrovet Ltd vs Addl. Commissioner of Commercial Taxes, Bangalore 2011 (39) VST 20 Karn. = 2010 (8) TMI 852 - KARNATAKA HIGH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tical (and not merely similar) set of facts and circumstances. Hon ble Supreme Court in Collector of C.Ex., Calcutta vs Alnoori Tobacco Products 2004 (170) ELT.135 (SC) = 2004 (7) TMI 91 - SUPREME COURT OF INDIA had held as follows: 11. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid s theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. In London Graving Dock co. Ltd. v. Horton (1951 AC 737 at p. 761), Lord Mac Dermot observed : The matter cannot, of course, be settled merely by treating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not eligible for the exemption vide entry Sl.No. 137 of the Notification No. 2/2017- Central Tax (Rate) dated 28-6-201 7. The appellants have not made out any case for interference with the Adv. Ruling Authority s ruling as above, which therefore merits to be upheld. 30. Accordingly, we pass the following ORDER The Advance Ruling pronounced vide TSAAR Order No. 02/2018 dated 30-052018 = 2018 (6) TMI 465 - AUTHORITY FOR ADVANCE RULING HYDERABAD TELANGANA passed by the Telangana State Authority for Advance Ruling in re: appellant M/s. Nagarjuna Agro Chemicals Pvt. Ltd., Hyderabad is confirmed. The subject appeal is disposed of accordingly. ---------------------- Notes: 1. Under the scheme of GST-taxation, for every Central Tax (Rate) Notification issued, a corresponding Notification is issued by State under respective state GST Act. As such, for ease of reference and appreciation of the discussion, the references hereinafter are made by citing the relevant Central Tax Rate Notification(s)/entries therein; which would also constitute a reference to the corresponding Notification issued under TGST Act, 2017. 2. Levy of GST on sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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