TMI Blog2019 (7) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... tic purposes under which coffee makers are classified under 85167100. This means that coffee makers used for domestic purposes are classified under chapter 8516. This is also stated in the explanatory notes that only electro-thermic machines, including coffee makers, normally used in the household are covered under this heading. The notes also specifically excludes thermo-electric appliances which are not normally used in the household which are to be classified under heading 8419 - Therefore, Gemini Modern Auto Coffee Filter and Gemini Modern Traditional Coffee Filter are specifically excluded from heading 8516 and should be classified under chapter 8419 and specifically under 84198190. Whether Sl.No. 320 of Schedule III to Notification no. 41/17 C.T.(Rate) dated 14.11.2017 is applicable and the products are liable to tax at the rate of 18% GST? - HELD THAT:- Prior to the amendment vide Notification no. 41/17 C.T.(Rate) dated 14.11.2017, CTH 8419 is mention only in Sl.no. 320 of Schedule III and Sl. No 121 of Schedule IV. However, only specific machinery were covered under these Sl.Nos which do not include Coffee makers for non domestic use. Therefore, for the period 01.07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also involved in the activity of manufacture of various products namely Beverages, Vending Machines and Components, Magnetic Float Switches etc. The Applicant has sought Advance Ruling in respect of their two manufacturing products namely, Automatic Electric Filter Coffee Maker and Manual, Electrically Warmed Filter Coffee Maker as below: 1. Whether in the facts and circumstances of the case and in view of the fact that Automatic Electric Filter Coffee Maker fell under Chapter Heading No. 8419 of the GST Tariff and therefore SI No. 320 of Schedule III to Notification No. 41/17 CTR dated 14.11.2017 and corresponding Sl.No. 320 of Schedule III to G.O. M.s. No. 157 dated 14.11.2017 to be taxed at the rate of 18% ? 2. Whether in the facts and circumstances of the case and in view of the fact that Automatic Electric Filter Coffee Maker is machinery not meant for domestic use and will therefore be classified under Chapter Heading No. 8419 of GST tariff to be charged at the rate of 18%? 3. Whether in the facts and circumstances of the case and in view of the fact that, Manual/ Traditional Filter Coffee Maker, being not meant for domestic used and falli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng this product to Hotels and Restaurants such as Hot Chips Restaurants, Hotel Surguru, Hotel Arya Nivas, Adyar Ananda Bhavan, etc. In view of the above, the product in question, Automatic Electric Filter Coffee Maker, will be a Machine which falls squarely under Chapter 8419 of the GST tariff contemplated by Schedule III of Notification No. 41/17-CTR dated 14.11.2017 read with schedule III of G.O. Ms.No. 157 of 2017 dated 14.11.2017 to be taxed at an aggregated GST rate of 18%. 2.2 Regarding Manual / traditional filter coffee maker Machine, the same is meant only for commercial use. The Applicant stated that this product is designed to handle 250 to 500 grams of coffee powder in one cycle. In this instance, the hot water itself is poured into the Machine. There is a filter inside the Machine, through which the hot water passes and drips into coffee powder resulting in the cooking of Coffee powder and extraction of decoction. The decoction is kept warm in a warmer heater which is controlled by a thermostat. Unlike the first Machine, namely, Automatic Electric Filter Coffee Maker, this Machine is not controlled by the Printed Circuit Board (PCB). This Machine is operated el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not under Chapter Heading 8516. 3.2 The applicant was offered an opportunity of final hearing and heard on 12.03.2019. The Applicant appeared and stated that they Manufacture Coffee Maker for commercial use either Fully-Automatic or/ and Semi-Automatic. They have a minimum capacity of 250 gram (75 cup), 500 gram (150 cups) only, whereas domestic has 4-5 cups capacity. The Chapter Heading 8516 is for Coffee Maker/ Electro Thermic Appliances of domestic use. Whereas, Chapter Heading 8419 is the correct classification as Electrical Machinery involving change of temperature. They were earlier classifying these products under the Chapter Heading 8516, but the Central Excise Duty was the same for all the above products. They submitted various case laws to state that principle of estoppel cannot stand in the way of law. They also stated that up to 13.11.2017, both the Chapter Heading 8419 8516 were attracting 28%, later tax rate of Chapter Heading 8419 became 18%. From 27.072018, the tax rate for Chapter Heading 8516 also became 18%. They submitted invoices of sale during pre-GST Post - GST period. 4. The jurisdictional authority, Chennai (south) Commissionerate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely covered under 85167100. The other classification sought by the Applicant Viz. 8419 8120 corresponds to Other Kitchen Machines , which is a more general description. Hence, in line with the General Rules of the Interpretation of the Harmonised System of Nomenclature, the said product is classifiable under Chapter heading 85167100 only the taxpayer has claimed that the said products viz. Automatic Electric Filter Coffee Maker and Manual/ traditional Filter Coffee Maker is a Machinery. But, the description of the goods mentioned in the copy of bills as Filter Cofffee Maker by the taxpayer himself, which squarely fits in Chapter Heading 85167100. The functions elucidated by the taxpayer are only the working of Coffee-Maker . Hence, the said goods are only Coffee-Makers . Moreover, the end use of the said products i.e. Coffee Maker is for domestic purpose. The Applicant viz., M/s. V.V. Enterprises has been initially classifying the impugned product only under the chapter heading 8516 71 00. It is evident that in as much as the rate of GST Chapter Heading 8419 81 20 has been reduced to 18% from 28% with effect from 14.11.2017, whereas the GST rate for 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of the ground coffee. It involves brewing of coffee decoction by pouring or dripping water brought to a boil in the appliance. There is no treatment of coffee powder but a processing of the coffee powder by using hot water. The coffee powder is used up in the process and the filtrate (a colloidal solution) does not have the same physical or chemical nature as the raw material (dry ground coffee powder) thus, it is a process amounting to manufacture of coffee decoction using the electro-thermic device and such device would not be covered by Chapter 84 for the reasons given below. Since the goods dealt with by the applicant is an electro-thermic device, it is covered by Chapter 85 only. Chapter 84 does not cover electrical equipment and there is no entry for electro-thermic devices anywhere under that chapter. All electro-thermic devices are covered by Chapter 85 only. More specifically, there is an entry 8516 7100 which covers coffee or tea makers . No reasons are adduced by the applicant as to why the goods dealt with by him would not fall within this specific entry except to contend that the scale of operation of the appliance manufactured by him is greater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 7.1 We have carefully examined the statement of facts, supporting documents filed by the Applicant such as Brochures, copies of Invoices and the case laws and also comments furnished by the Additional Commissioner, Chennai (South) Commissionerate, Office of the commissioner of GST Central Excise, Government of India and the remarks submitted by the Assistant commissioner(ST), Sholinganallur Assessment Circle, Commercial Taxes Department, Tamil Nadu and heard the arguments made by the Applicant at the time of hearing on 19.11.2018 12.03.2019. The issue to be decided is 1. whether the Automatic Electric Filter Coffee Maker is a machinery not meant for domestic use and will therefore be classified under CTH 8419 and charged to GST at the rate of 18% effective from 14.11.2017 as per Notification No. 41/ 17 CTR dated 14.11.2017 with corresponding SI.No.220 of G.O. Ms. No. 157 dated 14.11.2017, issued under provisions of TNGST Act 2. Whether the Manual/ Traditional Filter Coffee Maker, being not meant for domestic use and falling under CTH 8419 and charged to GST at the rate of 18% effective from 14.11.2017 as per Notification No. 41/17 CTR dated 14.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) Heading 84.01 covers nuclear reactors, fuel elements (cartridges), non-irradiated, for nuclear reactors and machinery and apparatus for isotopic separation. (2) Headings 84.02 to 84.24 cover the Other machines and apparatus which are classified mainly by reference to their function, and regardless of the field of industry in which they are used. Chapter Heading 8419 states: 8419 MACHINERY, PLANT OR LABORATORY EQUIPMENT, WHETHER OR NOT ELECTRICALLY HEATED (EXCLUDING FURNACES, OVENS AND OTHER EQUIPMENT OF HEADING 8514), FOR THE TREATMENT OF MATERIALS BY A PROCESS INVOLVING A CHANGE OF TEMPERATURE SUCH AS HEATING,COOKING, ROASTING, DISTILLING, RECTIFYING, STERILISING, PASTEURISING, STEAMING, DRYING, EVAPORATING, VAPORISING, CONDENSING OR COOLING, OTHER THAN MACHINERY OR PLANT OF A KIND USED FOR DOMESTIC PURPOSES; INSTANTANEOUS OR STORAGE WATER HEATERS, NON -ELECTRIC . - Other machinery, plant and equipment: 841981 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, concentration, evaporation, vaporisation, cooling, etc. They include : (17) Specialised heating or cooking apparatus which are not normally used in the household (e.g., counter-type coffee percolators, tea or milk urns, steam kettles, etc., used in restaurants, canteens, etc.; steam-heated cookers, hot-plates, warming cupboards, drying cabinets, etc.; deep-fat friers). From the above, it is seen that Machine means any machine means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of Chapter 84 or 85. HSN Explanatory Notes to Chapter 84 states that Chapter 84 covers all machinery and mechanical appliances unless they are more specifically covered in Chapter 85. Though in general machines and machinery are covered in Chapter 84 and electrical goods under Chapter 85, General Notes to Chapter 84 specifically states that machinery and apparatus of Chapter 84, specifically 419 remain covered in Chapter 84 even if electric. In the instant case, both Gemini Modern Auto Coffee Filter and Gemini Modern Traditional Coffee Filter are machinery which are electric as they use electricity, the former for operating the internal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter). In general, however, electrically heated apparatus falls in other Chapters (mainly in Chapter 84 ), for example : steam generating boilers and super-heated water boilers ( heading 84.02 ), air conditioning machines ( heading 84.15 ), roasting, distilling or (idler apparatus of heading 84.19 , calendaring or other rolling machines and cylinders therefor ( heading 84.20 ), poultry incubators and brooders ( heading 84.36 ), general purpose branding machines for wood, cork, leather, etc. ( heading 84.79 ), medical apparatus ( heading 90.18 ). Chapter Heading 8516: 8516 ELECTRIC INSTANTANEOUS OR STORAGE WATER HEATERS AND IMMERSION HEATERS; ELECTRIC SPACE HEATING APPARATUS AND SOIL HEATING APPARATUS; ELECTRO-THERMIC HAIR-DRESSING APPARATUS (FOR EXAMPLE, HAIR DRYERS , HAIR CURLERS, CURLING TONG HEATERS) AND HAND DRYERS; ELECTRIC SMOOTHING IRONS; OTHER ELECTRO-THERMIC APPLIANCES OF A KIND USED FOR DOMESTIC PURPOSES; ELECTRIC HEATING RESISTORS, OTHER THAN THOSE OF HEADING 8545 - Other electro-thermic appliances: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amendment vide Notification no. 41/17 C.T.(Rate) dated 14.11.2017, CTH 8419 is mention only in Sl.no. 320 of Schedule III and Sl. No 121 of Schedule IV. However, only specific machinery were covered under these Sl.Nos which do not include Coffee makers for non domestic use. Therefore, for the period 01.07.2017 to 14.11.2017, the applicable rate on Gemini Modern Auto Coffee Filter and Gemini Modern Traditional Coffee Filter is CGST 9% as per Sl.No. 453 of Schedule-III of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 and SGST 9% as per Sl.No. 453 of Schedule -III of Notification vide G.O. (Ms) No. 62 dated 29.06.2017 S.No. Chapter Heading/ Sub-heading/ Tariff item Description of goods 453 Any Chapter Goods which are not specified in Schedule I, II, IV, V or VI The entry at Sl.No. 320 of Schedule III of Notification no. 01/2017-C.T. (Rate) amended by Notification no. 41/2017 dated 14.11.2017 with effect from 15.11.2017 is as follows: Sl.No. Chap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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