TMI Blog2021 (1) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... products supplied by the applicant to railways are under investigations and the investigations have been initiated through the summon dated 10.10.2018. It is the submission of DGGSTI, HRU Hosur that the question raised before this authority is part of the investigation and therefore the application do not merit admission. The first proviso to Section 98(2) makes an application ineligible for admission if the Authority finds that the question raised in the application is already pending or decided in any proceedings in the case of the applicant under any provisions of this Act. Issuance of summon under Section 70 of the CGST Act 2017 and calling for definite particulars happens in the course of investigation. We find that the only contention of the applicant is the summon is generic in nature and the subject goods whose classification is sought before us was never part of the proceedings. The applicant has classified `Pantograph under CTH 8607 and continues to do so while in respect of certain other products, they have re-classified and paid the differential taxes. The month-wise value in respect of Pantograph has been furnished by the applicant to DGGSTI Hosur. Show Cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AND THIRU KURINJISELVAAN V.S., M.SC. (AGRI.), M.B.A., MEMBER Note: Any appeal against this Advance Ruling order shall lie before the Tamil Nadu State Appellate Authority for Advance Rulings, Chennai as under Sub Section (1) of CGST Act / TNGST Act 2017, within 30 days from the date on the ruling sought to be appealed is communicated. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. M/s Faiveley Transport Rail Technologies India Limited (hereinafter referred as Applicant ), Post Box No.39, Haritha, Hosur, Tamilnadu-635109 is registered under the GST Act 2017 vide GSTIN No. 33AAGCS8525B lZKL. The applicant has sought Advance Ruling on the following question: Whether Wheel Side Protection Control Unit (WSP) and Pantograph supplied by the applicant, should be classified as parts of railway ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The major constituents of the WSP are Speed sensors; Phonic Wheel; Micro-processor; Dump Valves (also known as anti-skid values);Pressure Switch; and other switches and connectors. Each of the aforementioned constituents has a specific role to play with respect to prevention of the sliding or skidding of the axles. The following is the process by which the WSP functions: Speed sensors and Phonic wheels (which are a constituent of the WSP - located at the axle ends) detect the speed at which the wheels are moving. The said speed is evaluated/compared with a reference speed which is a calculated value based on the real axle speeds. The comparison between these speed signals whether or not an axle is about to enter in to a slide mode; The speeds are evaluated by the micro-processor enabled unit (viz. micro controller) - which in turn generates signals in order to direct the dump valve (viz. valves which controls the increase/decrease of the air pressure in the brake cylinders) to effectively control the brake cylinder pressure in case of any locking of the axles and to ensure a safe smooth braking without sliding; The instant the wheel to rail adhesion is brough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification which covers parts of railway or tramway locomotives or rolling stock . The said classification had been adopted because:- a. the WSP, by its very nature, cannot be utilized for other than railways, or rolling stock and needs to be utilized in conjunction with the braking system of a railway train coach or a metro bogey. b. the Pantograph, by its very nature, cannot be utilized independently as a separate machine and needs to be mounted on the roof of the train coach so as to ensure uninterrupted power supply to the train at all times. It may be noted that a Pantograph, owing to its specific usage, is designed and structured (viz. from the from the stage of R D to manufacture, till installation) to be fitted as per Railway specifications for train/ Metro coaches/ rolling stock. 2.4 On the interpretation of Law facts, they have stated that Section XVII of the Customs Tariff Act (CTA) deals with Vehicles, Aircraft, Vessels and Associated Transport Equipment. Chapter 86 falls within the ambit of the said Section and deals with railway or tramway locomotives, rolling stock and parts thereof; railway or tramway track fixtures and fittings and parts t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WSP can only function once used in conjunction with the operating system of the train coach and metro bogey. Essentially, it is part of railway break/ air break/ break gear which is specifically covered under Note 2 of Chapter 86. Hence, it becomes evident that the subject goods are utilized exclusively with train bogies/ metro trains/ locomotives and hence, the primary condition for classification under Chapter Heading 8607 is satisfied. They have placed reliance on the case of M/s Knorr Bremse India Ltd. Vs. CCE, New Delhi reported in 2011 (7) TMI 621-CESTAT, Delhi , wherein, it was categorically held that the items under dispute (which included Wheel Slide Protection) are parts of railway breaks imported in unassembled conditions and such parts were specifically held to be covered under Heading 8607 of the Customs Tariff. The basic utilization of the Pantographs is to store electric current within itself and provide uninterrupted power supply to the train coach by acting as a linkage between the overhead power cables (which carry electricity) and the train coaches/ Metro trains (which use the said electricity to propel forward). Pantographs, right from the structure on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Stock as it complies with the specified conditions i.e. (a) WSP (being part of Railway Air brake/ gear) and Pantograph (viz. installed on top of locomotive coaches specifically to draw and collect power from overhead wires) are suitable for usage solely or principally with the articles of Chapters 86 (i.e. Railway or Rolling stock); and (b) WSP and Pantograph are not covered in goods mentioned in Note 2 to Section XVII. In light of the aforementioned submissions, having elaborated upon the constitution and working of the WSP and the Pantograph as well as the legal framework in place with respect to the classification of the subject goods, they are of the view that the subject goods are appropriately classifiable under Heading 8607. 3.1 The applicant was extended an opportunity to appear for personal hearing on 11.02.2020. The applicant vide their letter dated 04.02.2020 sought adjournment and requested to reschedule the hearing. The hearing was scheduled to be held on 26.03.2020 but the same was cancelled due to Covid-19 Pandemic. In view of the prevailing pandemic, the applicant was offered to be heard through digital media and the applicant accepted the same. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lassification and discharged differential GST for the period July 2017 to March 2019 in respect of such goods and W.E.F 1st April 2019 they are classifying the said goods under the revised HSN They received a Show Cause Notice(SCN) dated 18th June 2020 from DGGSTI Coimbatore demanding the differential excise duty in respect of goods re-classified by them. In the said notice, the authorities did not contest on the classification of WSP and Pantograph The products in question(i.e., WSP and Pantograph were neither specifically enquired in any proceedings nor contested in the eventual SCN issued under Excise Law. Therefore, in their view, it is appropriate to say that there has been no proceedings pending under GST Law with respect to WSP and Pantograph. The applicant has further stated that they received notices/summons from DGGSTI Chandigarh and Custom Authorities on classification of certain goods. They have identified the products (other than WSP and Pantograph) which merited re-classification under different CTH and paid differential duty thereon (viz. GST on outward supplies and Customs Duty on imports). The details of Inquiry/Investigations along with the copies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not specifically a part of the investigations by DGGSTI. They undertook to furnish submissions shared during the hearing and requested to consider their contention that their application is admissible. 5.2 The applicant vide their letter dated 29.10.2020 stated that the proceedings initiated by issue of the summons on them are general in nature and not specific to the question raised in relation to the classification of the subject goods and have submitted the following flow of key events along with the relevant documents. i. Summons issued by DGGSTI, Hosur dated 10.10.2018 ii. Recording of statement of authorized person dated 25.10.2018 iii. Details of payment of differential duty iv. Letter dated 07.01.2020 of the applicant addressed to the DGGSTI, Hosur regarding the details required for supplied made to Railways and others for the period March2016 to June 2017 v. Recording of statement of the authorized person dated 10.01.2020 vi. Show Cause Notice issued by DGGSTI, Coimbatore dated 18.06.2020 vii. DGGSTI, Hosur letter dated 09.09.2020 calling for details of supplies made to Railways and others The applicant has submitted copies of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant by them by issuing summon dated 10.10.2018 asking them to furnish the description, classification, GST rate adopted by them on products supplied to Railways along with details for clearances to others. The applicant has furnished the details and given voluntary statement. Also based on the investigations initiated, the applicant re-classified some goods supplied to railways and others as railway parts and classified under Chapter Heading 8607 at the time of clearance. Based on the reclassification, they have paid differential duty of ₹ 34,29,67,409/-along with interest of ₹ 6,60,86,739/- during the period 30.12.2018 to 19.10.2019. the investigation is specific- for classification of goods for railways and covers all goods supplied by the applicant to railways under Chapter 8607 and has been initiated prior to their filing of Application for Advance Ruling. Further, with respect to the products for which the applicant has sought ruling on the classification viz., Wheel Side Protection Control Unit and Pantograph, they have stated that: i. In respect of Wheel side protection control unit, the same was not in their list of products prior t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apparent on record (for e.g,. any clerical or arithmetic mistake) but to change the position which was originally adopted by the DGGSTI post analyzing the facts of the case. Further, the Applicant has reiterated that two hearings have already taken place with respect to their Advance Ruling Application and the said Corrigendum has only been issued subsequent to the conclusion of the hearing on admissibility dated is 15th October 2020. Thus, the applicant has submitted that the said Corrigendum cannot be termed as pending proceeding for the purposes of the their Application. Also, they have submitted that the corrigendum is issued in respect of proceeding under the Central Excise Law and not under GST law. Therefore, the corrigendum would have no consequence or bearing on the admissibility of their Application. Thus, the question of classification of Pantograph and parts or the WSP was never part of pending proceedings before the DGGSTI at the time of filing the Advance Ruling Application. The issuance of the Corrigendum at this stage fortifies the said fact. 8.1 We have carefully examined the statement of facts, supporting documents filed by the Applicant along with applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n applicant under any of the provisions of this Act: 8.3 In the case at hand, we find that DGGSTI has submitted that the classification of the products supplied by the applicant to railways are under investigations and the investigations have been initiated through the summon dated 10.10.2018. It is the submission of DGGSTI, HRU Hosur that the question raised before this authority is part of the investigation and therefore the application do not merit admission as per the proviso supra 8.4 The applicant while acknowledging the investigations initiated by DGGSTI, HRU Hosur, has contended that the summon dated 10.10.2018 issued to them and the investigations are generic in nature and the classification of WSP and Pantograph were never contended by DGGSTI and therefore the classification of the subject goods were never part of Pending proceedings before the DGGSTI at the time of filing the application before this authority. 9.1 The first proviso to Section 98(2) makes an application ineligible for admission if the Authority finds that the question raised in the application is already pending or decided in any proceedings in the case of the applicant under any provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of goods misclassified under 8607 for the period from 01.10.2018 to 31.03.2019 and the workings for differential duty along with HSN for correct classification The list of vendors, who are all supplying the goods with 5% GST with details Details of items cleared under the Chapter Heading 8607 and 8608, claiming exemption under Notification No. 12/2016-CE dated 01.03.2016 whose correct/actual classification falls under chapter heading other than the above The SCN No. 02/2020 dated 18.06.2020 and the corrigendum dated 27.10.2020 has been issued to demand the differential excise duty payable for the period upto 30.06.2017 9.3 It is evident from the documents called for in Summon No.33/2018 dated 10.10.2018 that the investigation initiated against the applicant is on the classification adopted by them on the products supplied to Railways and classified by them under Chapter Heading 8607 for the period from 01.07.2017 to 30.09.2018 and the applicable rate of GST adopted by them. The applicant has classified `Pantograph under CTH 8607 and continues to do so while in respect of certain other products, they have re-classified and paid the differentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has relied upon the rulings pronounced by GST Advance Ruling Appellate Authority/ Advance Ruling Authority of different states wherein the said authorities have rejected the applications when the Investigations pertained to specific goods. The applicant has contended that in their case the investigation was generic and the subject goods were not part of the proceedings and therefore the application is to be admitted. As brought out in para supra, the investigation initiated by DGGSTI in the case of applicant is on the classification and rate of GST adopted by the applicant on the supplies to Indian Railways, classifying under CTH 8607. It is without doubt that the applicant has been classifying the subject goods under CTH 8607 and the supplies are made to Indian Railways and therefore we are unable to agree the contention that the investigation is generic , while we find the investigation is on the class of products classified under CTH 8607 and supplied to Indian Railways . 10. In View of the above, we rule as under RULING The application is not admitted under first proviso to Section 98 (2) of the CGST/TNGST Act 2017 for the reasons mentioned in para 9 above. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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