TMI Blog2021 (6) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... er 03 of 2021 Order Number 3/WBAAR/2021-22 - - - Dated:- 28-5-2021 - MS SUSMITA BHATTACHARYA, AND MR JOYJIT BANIK, MEMBER Applicant s representative heard : Sri Rajkumar Banerjee, Authorised Representative Smt Payel Agarwal, Authorised Representative Preamble A person within the ambit of Section 100 (1) of the Central Goods and Services Act, 2017 or West Bengal Goods and Services Act, 2017 (hereinafter collectively called the GST Act ), if aggrieved by this Ruling, may appeal against it before the West Bengal Appellate Authority for Advance Ruling, constituted under Section 99 of the West Bengal Goods and Services Act, 2017, within a period of thirty days from the date of communication of this Ruling, or within such further time as mentioned in the proviso to Section 100 (2) of the GST Act. Every such appeal shall be filed in accordance with Section 100 (3) of the GST Act and the Rules prescribed thereunder, and the Regulations prescribed by the West Bengal Authority for Advance Ruling Regulations, 2018. 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty is that this bacterial cell is lysed using sonication machine. The bacterial cell after lysis releases natural crude protein. Silica powder is added to the mix of lysed bacterial cells and released protein to reduce the pungent odour. This final product will be sold and shall be used in the concrete/cementitious mix to make mortar, plaster, bricks, ready mix concrete etc. 2.3 The applicant submits that this bacterial protein works in extracting silica in the form of nano silica from any silica rich substrate. Higher silica leaching activity within the concrete mix leads to higher strength and durability of the concrete. Hence, the cement percentage in the concrete mix can be reduced while increasing the ratio of such cheaper material like fly ash, stone dust etc.in the concrete mix. This will help in reducing the cost without compromising on the quality of concrete mix. It also imparts self -healing properties in mortar, plaster, bricks etc. and increases acid resistance of the same. 2.4 The applicant claims that use of such isolated bacterium and its protein in concrete technology is unique and shall result in reduction in cement consumption and shall also improve the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rophylactic or diagnostic uses; antisera and other blood fractions and modified immunological products, whether or not obtained by means of biotechnological processes; toxins, cultures of micro-organisms (excluding yeasts) and similar products 6 6 12 3.3 In respect of the advance ruling as relied upon by the applicant, the revenue is of the view that both the cases are related to classification of Bio-Fertilizers or Organic Fertilizers or Organic Manure and hence classified under chapter sub heading 3101. 3.4 The applicant, vide his submission through e-mail dated 09.05.2021 has denied to accept the view expressed by the revenue towards classification of the goods manufactured by him. 3.5 It has been submitted by the applicant that the revenue has wrongly classified the goods under HSN code of 3002 90 30 of the Central Excise Tariff Act, 1985 since the applicant is not dealing in the cultured solution of the micro-organism, rather it deals in the microbes itself (similar to the case as referred to in the above AAR pronounced by the authorities of Rajasthan and Uttarakhand). Culturing of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Tariff Act, 1985 described as Cultures of micro-organisms (excluding yeast) , then the AMI would also have been classified by the Hon ble members of the Uttarakhand AAR Bench under the HSN code 3002 90 30 instead of sub-heading 3101.00 of The Central Excise Tariff Act, 1985 by attracting GST rate of 12% as per serial no. 61 of Schedule II in Notification No. 1125-F.T. dated 28.06.2017. But since the chapter 30 of The Central Excise Tariff Act, 1985 deals with Drugs and Pharmaceuticals , therefore the said AMI wasn t held to be classified under the said chapter. Very similarly, the instant goods cannot be said to be a drug or pharmaceutical and therefore should be classified under the residual chapter for microbes i.e under chapter 31. In view of the said submissions, the applicant states that classification under the chapter 30 of The Central Excise Tariff Act, 1985 is not justified. 3.10 Another distinguishable factor between the instant product and the category of Drugs and Pharmaceuticals is that in case of Drugs and Pharmaceutical , the suppliers deals with culture of microbes along with isolation of desired product by various purification steps which ultimately l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds involved in the instant case, by no stretch of imagination can be treated as Bio-fertilizers or organic manure. Hence, the ratio of the said advance rulings, according to us, is not applicable to the instant case. 4.4 Now, we come to the submission made by the concerned officer from the revenue where it has been observed that the main product is cultured solution of microorganism i.e. cultures of micro-organism which falls under HSN Code 3002 90 30 of the Central Excise Tariff Act, 1985. To accept this proposition, it is necessary to see the description of the goods that fall under Chapter 30 with particular reference to the relevant Tariff Items there under. Chapter 30 covers goods, described as Pharmaceutical products . Tariff item under 3002 broadly covers following description of goods: HUMAN BLOOD; ANIMAL BLOOD PREPARED FORTHERAPEUTIC, PROPHYLACTIC OR DIAGNOSTIC USES; ANTISERA, OTHER BLOOD FRACTIONS AND IMMUNOLOGICAL PRODUCTS, WHETHER OR NOT MODIFIED OR OBTAINED BY MEANS OF BIOTECHNOLOGICAL PROCESSES; VACCINES, TOXINS, CULTURES OF MICRO-ORGANISMS (EXCLUDING YEASTS) AND SIMILAR PRODUCTS. In our opinion, the goods manufactured by the applicant does not fall under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g occurs, the bacteria will be activated to precipitate CaCO3 to in‐situ heal concrete cracks. This self‐healing property results in a recovery of water‐tightness, and hence limits the penetration of corrosive substances into concrete structures and improves concrete durability. * [*Source: Application of bacteria in concrete: a critical review___Nele De Belie__N. De Belie, RILEM Technical Letters (2016) 1: 56 61] 4.8 In light of these properties and uses of the goods in concrete technology i.e, it provides higher strength and durability, imparts self-healing, increases resistance, there can be no denying that the item essentially bears the character of an additive. In Merriam-Webster dictionary, additive is defined as a substance added to another in relatively small amounts to effect a desired change in properties . 4.9 When we proceed to find out whether any specific heading in the tariff for classification of the goods describes such type of additives or not, we find that Prepared additives for cements, mortars or concretes is classified under Tariff Item 3824 40 which reads as under: 3824: PREPARED BINDERS FOR FOUNDRY MOULDS OR CORES ..... X X X X Extracts X X X X X X X X Extracts X X X X
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