TMI Blog2020 (9) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... Plastic Items, (stated as Plastic Mechanical Liquid Dispenser ) shall be classified, under Chapter sub-heading 3926.90- Others, as articles, not elsewhere specified or included, of plastics (as defined in Note 1 to the Chapter) or other materials of heading 39.01 to 39.14 . Accordingly, the said product is liable to GST @ 28% (CGST@14% +SGST@14%) till 14.11.2017 and @ 18% (CGST@9% +SGST@9%) w. e. f. 15.11.2017. - GUJ/GAAR/R/34/2020 (IN APPLICATION NO. Advance Ruling/SGST&CGST/2019/AR/14) - - - Dated:- 3-7-2020 - SANJAY SAXENA AND MOHIT AGRAWAL, MEMBER Present for the applicant : Mr. Nishith V. Shah BRIEF FACTS M/s. Pooja Enteroprise, 1st Phase, J-14, Old Type Shed, GIDC Vapi, Gujarat, having a GSTIN No.24AAGPPS6774E1ZV, is a company filed an application for Advance Ruling under Section 97 of CGST Act, 2017 and Section 97 of the GGST Act, 2017 in FORM GST ARA-01 discharging the fee of ₹ 5,000/- each under the CGST Act and the SGST Act. 2. The applicant has submitted that they are engaged in importing Plastic Mechanical Liquid Dispensers from China and sell them in local market since 2011. These dispensers are used as the caps of bottles. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le through actuator by pumping piston up and down, which is mechanical in Nature. This pump cannot be used without bottle and is packaging item. a) Material used: Poly Propylene, LDPE, Glass Ball and SS Spring. b) Usage: On Bottle of Medicated Foam wash Medicated Hand wash Soap. IV. Cream Pump (HS Code 84242000): This type of pump is hand operated mechanical appliances for dispensing liquid or gel lifted through a plastic pipe goes inside the bottle. In this type of Pump, Liquid dispense from Bottle through actuator by pumping piston up and down, which is mechanical in Nature. This pump cannot be used without bottle and is packaging item. a) Material used: Poly Propylene, LDPE, Glass Ball and SS Spring. b) Usage: On Bottle of Hair Serum for hair growth, Hand Disinfectant, Hand Sanitizer Gel etc. This product can be used for multiple usages and is not related to a specific purpose. V. Trigger Sprayer (HS Code 84242000): This type of pump is hand operated mechanical appliances for spraying/streaming liquid lifted through a plastic pipe goes inside the bottle. In this type of Pump, Liquid dispense from Bottle through actuator by pressing by finger backward and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v) Powder puffs and pads for the application of cosmetics or toilet preparation (face powder, rouge, talcum-powder etc.). They may be made of any material (swan s or eider-down, skin, animal hair, pile fabrics, foam rubber, etc.) and they remain in this heading whether or not they have handles or trimmings of ivory, tortoise-shell, bone, plastics, base metal, precious metal or metal class with precious mental. 7. The applicant further submitted that classification aspect of pumps and sprays has been under judicial scrutiny in Courts and Tribunals. The applicant has placed reliance on the following decision which was based on the erstwhile regime of Central Excise Tariff Act, 1985. i) MKP DISTRIBUTORS PVT. LTD. Vs. COMMR. OF CUS., AIRPORT, MUMBAI reported in ELT 2010 (255) E.L.T. 286 (Tri. - Mumbai): Perfumes/scents with spray packs - Classification of - Goods imported in containers with spray mechanism attached thereto - Perfumes and scents imported without spray mechanism covered under Heading 33.03 of Customs Tariff Act, 1975 - Scents sprays with mounts and heads for spray covered under Heading 9616.10 ibid - Factual position admitted by appellant under Section 108 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances, the view taken by the lower authorities on the classification dispute can only be sustained. Accordingly, we uphold the classification of the goods under CTH 9616.10. Accordingly, it was held that the classification of the goods (Mount spray) will be under CTH 9616.10 (ii) COMMISSIONER OF CUSTOMS, MUMBAI Vs. SPECIALITY VALVES reported in ELT 2006 (202) E.L.T. 785 (Tri. - Mumbai) Pump - Part of spray pumps - Head 16 mm, ball sale assembly, accumulators, large piston M08, flange filament M08 - Importer manufacturing spray pumps, admitted that the manufactured items will be sold as sprays that can be used for spraying scents, toiletries or other chemicals - Such admission compel to classify the impugned items under Heading 9616 of Customs Tariff Act, 1975 and not under Heading 8424 ibid . 5. After reading the explanatory note under the two competing headings, we find that heading 9616 would be more appropriate to cover the impugned inputs. The grounds taken by the Revenue as regards to the admission of the importer about the use of these goods would compel us to classify them under chapter heading 9616. The finding of the Commissioner that the goods are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y note to Chapter Heading 84.34, that machines for processing milk depend on the principle of heat exchange and they are excluded from coverage under Chapter Heading 84.34 and the heading also excludes refrigerating appliance (whether or not specially designed for cooling or keeping milk and milk cooling vats incorporating evaporator of a refrigerating unit) from Chapter Heading 84.34. HSN Explanatory note also excludes machines for wrapping or weighing a product from Chapter Heading 84.34. 5. Further in the case of Diary Development Corporation v. Collector of Customs, Bombay - 2000 (119) E.L.T. 629, the Tribunal held that butter packing machine is classifiable under Heading 84.22 of the Customs Tariff Act, 1975 and not under Heading 84.34. 6. In the light of the Note No. 2 to Chapter Heading 84.34 and HSN explanatory notes to Chapter 84.34 and the Tribunal s decision cited supra, we reject the contentions of the appellants that pasteurizing machines in question are dairy machines for classification under Chapter Heading 84.34 (although they are dairy machines) and uphold the findings of the authorities below, as regards classification under different headings of Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities themselves under 8413.20 which was a classification claimed by the appellants. Thus, the present order confines only to the present consignments as already pointed out by the ld. Consultant. Classification of the goods under 8424 has been canvassed by the ld. Consultant for various reasons. These have not been correctly considered by the lower authorities. We, therefore, consider it appropriate that the lower authorities consider the classification issue afresh in order to consider whether sub-heading 8413 or 8424 would be more appropriate. For this purpose, the matter is remanded to the original authority and the appeal is disposed of on the above terms. 8. The applicant further submitted that in the above background, the appropriate classification of the subject goods appears to be as follows: I. Lotion Pump- (Screw type): It is plastic device intended to be screwed on the bottle. The function and use of the above pump is for pumping/ dispensing liquid or lotion from a bottle and serves for the depletion of the contents, viz. liquid, gel, cream etc. The tariff item No. 8413 though covers pumps, the HSN, has provided that This heading covers most machines an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an to import 20mm, 24mm 26mm. The applicant has submitted that the meaning of toilet spray is liquid contains alcohol with variable percentage of perfume. So, trigger sprayer which is used on Glass Cleaner and Fine Mist Sprayer with neck size 20mm and above which are used for various purpose does not fall in Chapter 96. Similarly, Mini Trigger Sprayer generally used for Room Freshener does not fall under this HS code. As Room Freshener with trigger Sprayer though contains Perfume but it generally water based. Hence, as per their contention, it cannot be terms as Perfume Sprayer and it cannot be classified under CTH No. 9616, rather it is appropriately classifiable under CTH 8424. III. Foam Pump: As stated above at Sr. No. I, the function and use of the above pump is for pumping/ dispensing liquid or lotion from, as such, in terms of the above provisions of the HSN and Customs Tariff, the appropriate classification appears to be 8424 as heading No. 8424 covers machine and appliances for projecting, dispersing or spraying steam, liquids or solid materials (e.g. sand, powder, granules, grit or metallic abrasive) in the form of a jet, a dispersion (whether or not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and powder bellows. Further, Sr. No. B specifically covers Spray guns and similar appliances. Therefore, the applicable subheading for the plastic Trigger Sprayer will be 8424. The other contentious tariff item relating to this product could be 9616. However, the said heading viz. 9616 has specifically provided some exclusion as per the HSN. The said heading does not apply to dispersing or spraying appliances of heading 8424 {Clause (C)}. Besides, the exclusion pertaining to heading 8424 is scent sprays and similar toilet sprays and similar toilet sprays which would merit classification under heading 9616. In this backdoor, the appropriate classification of this item seems to be under heading 8424. 9. The applicant, vide their letter dated 24.04.2019, made further submission, wherein they stated that HS Code 9616 is related to Scent Sprayers and similar Toilet Sprayers and Mount and Heads therefore-----. Explanatory notes on HS code states that this heading covers: I. Scent, Brilliantine and similar toilet sprays, whether of the table of pocket type, whether for personal or professional use. They consist of a reservoir, generally in the form of a bottle, to which is fix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p Cream Pump consist of parts, viz. (a) Dip tube to lift the liquid; (b) Spring Loaded Piston Pump; (c) Actuator to dispense liquid. Lotion Pump Cream Pump brings gel or emulsion up and out from the inside of the container. The pumps thrust the gel or emulsion outward or forward. Thus, Lotion Pump and Cream Pump project the Gel or Emulsion. Lotion/ Cream pump do not breakup and scatter the gel or emulsion in various direction by the Dictionary meaning of Spray. VII. For HS Code 9616, they made references of following Rulings of American Customs: (i) American Customs Ruing No. HQ088982 dated 17th May, 1991; (ii) American Customs Ruing No. NY G86184 dated 24th January, 2001; (iii) American Customs Ruing No. NY N059597 dated 29th May, 2009. In all above ruling, Dispenser Pumps and Bottles, both are imported together and, hence, it has been classified under 9616. VIII. For HS Code 8424, they made references of following: (i) American Customs Ruing No. NY N284981 dated 2nd May, 2017 for Sprayer Components; (ii) American Customs Ruing No. NY N047916 dated 22nd June, 2009 for Lotion or Soap Dispensers from China; (iii) American Customs Ruing No. NY N003133 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act. 12. In this case, the moot point is to be decided is that: What is the HSN Code and rate of tax for Plastic Mechanical Liquid Dispenser? 13. The applicant is engaged in importing various types of plastic devices intended to be screwed/fitted on the bottle/containers. These plastic devices are used for pumping/ dispensing liquid or lotion from a bottle and serves for the depletion of the contents, viz. liquid, gel, cream etc.. 14. The applicant further submitted that till 30.06.2017, they were importing this material under HS Code 3923 (Caps closure). But after implementation of GST, they were asked to clear the goods under HSN 3926 (Other articles of Plastics) bearing GST of 28%. The applicant further submitted that they were not certain about HSN of the said imported goods and other competitors were supplying same product under HSN 8424 and 9616. So, it leads to confusion and, hence, they applied for Advance Ruling on the classification of the imported goods. 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under Chapter Heading 9616 would not be appropriate. CHAPTER HEADING NO. 8424: 18. We further find that Chapter Heading No. 8424 deals with mechanical appliances (whether or not hand-operated) for projecting, dispersing or spraying liquids or powders; Fire extinguishers, whether or not charged; Spray guns and similar appliances; Steam or sand blasting machines and similar jet projecting machines. The items in question are neither a mechanical appliance, Fire extinguisher, Spray guns and similar appliances, Steam or sand blasting machines and similar jet projecting machines nor it can be classified under CTH 8424.89 because CTH 8424.89 refers to other than agricultural or horticultural appliances, industrial bellows and similar other products having same type of functioning are covered. Further, Chapter Heading 8424.90 refers to Parts . As per explanatory Note to HSN of this chapter heading, the heading (8424.90) includes parts for the appliances and machineries of this heading (8424) only. Further, this chapter does not cover parts of general use as defined in Note 2 to Section XV of base metal or similar goods of plastics (Chapter 39). Imported items in question a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w: SCHEDUE IV Sl. No. Chapter/Heading/Sub-heading/Tariff heading Description of services Applicable tax rate of CGST 45 3926 [Other than 3926 40 11, 3926 90 10] Other articles of plastics and articles of other materials of headings 3901 to 3914 [other than bangles of plastics, PVC Belt Conveyer, plastic beads and plastic tarpaulins] 14% Thus, till 14.11.2017, items in question were levied GST @ 28% (CGST @14%+SGST@14%). II. During the period from 15.11.2017 and onwards 20.2 Further, vide Notification No.41/2017-Central Tax (Rate) dated 14.11.2017, the following amendments were made in the Notification No.1/2017-Central Tax (Rate) dated 28.06.2017: (C) in Schedule III- 9%,- (xxxvi) in S. No. 111, for the entry in column (3), the entry Other articles of plastics and articles of other materials of headings 3901 to 3914 [other than bangles of plastics, plastic beads and feeding bottles] shall be substituted. (D) in Schedule-IV-14%,- (i) S. No. 45 and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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