TMI Blog2021 (10) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... sification when sold in the domestic market, especially when we are referring to the First Schedule to the Customs Tariff Act, 1975(51 of 1975) for arriving at the classification of the products in the GST regime. The goods are parts of general use as they can be fitted/screwed into bottles/containers of any make i.e. of plastic, glass, metal etc. Also, nowhere is it contended by the appellant, that their product (which are parts) can be used only in bottles of a particular make or type. Hence, it can be construed that these items/products of the appellant can be considered as parts of general use i.e. parts which can be used in any type/make of bottles or containers. It, therefore, becomes apparently clear that items/products made of plastic of the appellant, which are parts of general use , will not be covered under any heading of Chapter 84. Therefore, in view of clause(g) of Note 1 of Section XVI of the Customs Tariff Act, 1975, it can be concluded that the product Plastic mechanical liquid dispenser of the appellant would not be covered under Heading 8424 of the Customs Tariff Act, 1975(51 of 1975). Rate of GST - HELD THAT:- The product Plastic mechanical liqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hanical in nature. This pump cannot be used without bottle and is packaging item. The materials used therein are poly propylene, LDPE, Glass Ball and SS Spring. The usage is on bottle of spraying liquid like operation preparation, glass/spectacle lens cleaner, mouth freshener, hair growth medicine spray, nasal spray, car sanitizer, car freshener etc. This product is used for multiple general usages and is not related to a specific purpose. It cannot be used for multiple general usages and is not related to a specific purpose. This pump cannot be used as a perfume sprayer as it is screw type and cheap packing. C. Foam Pump (HS Code 84242000): This type of pump is hand operated mechanical appliances for dispensing foam from liquid soap lifted through a plastic pipe which goes inside the bottle. In this type of pump, foam is dispensed 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. The materials used are poly propylene, LDPE, Glass Ball and SS Spring. The usage is on bottle of medicated foam wash and medicated hand wash soap. D. Cream Pump (HS Code 84242000): ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same). They have stated that they are preferring this appeal to settle the dust created by this classification confusion as the appellant is in the process of pleading justice at both fronts of GST as well as Customs and their business is being severely affected due to this confusion as no supply deal can be finalized conclusively due to the varying tax rates on the same product. 4. Aggrieved with GAAR s Advance Ruling Order No. No. GUJ/GAAR/R/34/ 2020 dated 03.07.2020, the appellant has filed an appeal against the said order. The grounds of appeal are as under: (i) GAAR has held that Chapter Heading 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 GAAR has grossly erred in holding that 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 it refers to parts . Further, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te complexities of assembly method are not to be taken into account while applying this rule. A copy of the amended explanatory note is enclosed at Annexure B. 2. The HS Committee in its 17th and 18th Sessions had also finalized classification opinion in respect of articles specified in Annexure C D. A copy of the classification opinion is also enclosed for ready reference. 3. It is requested that these decisions/classification opinions may be circulated among the assessing officers for their information and necessary action. (v) As the ITC-HSN of World Customs Organization has been adopted in totality by Indian Tariff of Customs and even the GST tariff so harmonious classification of any product would go a long way in easing business and taxation patterns. Further, the R.K. Jain GST Tariff 12th Education 2020-21 also indicates that such products would fall under Chapter 8424. The technical literature is submitted for ready reference. (vi) The appellant has concluded their appeal by requesting to set aside/modify the impugned advance ruling passed by the Authority for Advance Ruling or pass any such further order as may be deemed fit and proper in the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T regime has to be done in accordance with the Customs Tariff Act, 1975, which is in turn based on Harmonised System of Nomenclature popularly known as HSN . The rules of interpretation, section notes and chapter notes as specified under the Customs Tariff Act, 1975 are also applicable for classification of Goods under GST regime. However, once an item is classified in accordance with the Customs Tariff Act, 1975, the rate of tax applicable would be arrived at on the basis of notifications issued under GST. 10. The appellant in his grounds of appeal, has submitted that the GAAR has grossly erred in holding that 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 it refers to parts and that the GAAR on the basis of holding that 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 held that 84 chapter does not cover parts of general use as defined in Note 2 to Section XV of base metal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VI i.e. under Chapters 84 and 85. Clause(g) of the Note 1 of Section XVI mentions parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39). It therefore becomes apparently clear from the above, that similar goods of plastic which are parts of general use will also not be covered under Chapter 84 or Chapter 85. As per the submission of the appellant, their products are made of plastic i.e. they are plastic devices intended to be screwed/fitted on the bottle/containers which are used for pumping/ dispensing liquid or lotion from a bottle and serves for the depletion of the contents, viz. liquid, gel, cream etc. i.e. these plastic devices of the appellant actually form parts of the bottle or container into which they are fitted in. In view of the facts mentioned above, the aforementioned products of the appellant cannot be covered under Chapter 84 of the Customs Tariff Act, 1975. We, therefore, find that the GAAR has only quoted the wordings contained in clause(g) of Note 1 of Section XVI and has not made any reference to Section XV as mentioned by the appellant. We therefore, find that the GAAR has rightly s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed pictures/images of their product. Also, as per the submission of the appellant, the materials used in the said product are Poly propylene, LDPE, glass ball and SS Spring. It can therefore be seen that the major materials used therein are of plastic. Further, these items/products are plastic devices intended to be screwed/fitted on to the bottle/containers which are solely used for pumping/ dispensing liquid or lotion from a bottle and serves for the depletion of the contents, viz. liquid, gel, cream etc. i.e. these plastic devices of the appellant actually form parts of the bottle or container into which they are fitted in. Chapter 39 of the Customs Tariff Act, 1975 covers Plastic and articles thereof . Therefore, these products appear to be ideally classifiable under Chapter 39 only. 12.1 Further, the GAAR has classified the product of the appellant Plastic mechanical liquid dispenser under Heading 3926.90 as Other articles of plastics . However, we find that Heading 3926 of Chapter 39 is a residual entry and would therefore, cover only those plastic articles not classified anywhere else in Chapter 39 (Plastics and articles thereof) of the Customs Tariff Act, 1975. We, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the products in the GST regime. Further, as regards the GAAR classifying the product of the appellant under Heading 3926.90, we find that it is a residual entry and would therefore, cover only those plastic articles not classified anywhere else in any other heading in Chapter 39. For the purpose, a reference is required to be made to Rule 3(a) of the General Rules for the interpretation of the Customs Tariff. Rule 3(a) reads as under: 3. When by application of Rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. 12.3 We find that Heading 3926.90 is a residual entry and provides a more general de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8424 90 00 - Parts 13.1 Relevant Chapter notes to Chapter 84 reads as under: Heading 8424 does not cover : (a) Ink-jet printing machines (heading 8443); or (b) Water-jet cutting machines (heading 8456). ; 13.2 We 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. On going through the submissions as well as the images of their products given by the appellant, it appears that these items/products in question are plastic devices intended to be screwed/fitted on to the bottle/containers which are solely used for pumping/ dispensing liquid or lotion from a bottle and serves for the depletion of the contents, viz. liquid, gel, cream etc. i.e. these plastic devices of the appellant merely form parts of the bottle or container into which they are fitted in. Therefore, these items /products cannot be considered as a mechanical appliance for projecting, dispersing or spraying liquids ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v) 14 per cent in respect of goods specified in Schedule IV, (v) 1.5 per cent in respect of goods specified in Schedule V, and (vi) 0.125 per cent in respect of goods specified in Schedule VI. On going through the various schedules of the aforementioned notification, we find that the entry of the product Plastic Mechanical Liquid Dispenser (which are covered under the heading 3923.50 as caps, lids and other closures as discussed in para 12.2. above) of the appellant is found at Sr.No.108 of Schedule-III of the said notification (on which GST payable is 18% (9% CGST + 9% SGST). It reads as under: S.No. Chapter/Heading/sub-Heading/Tariff item Description of goods 108. 3923 Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics. Notification No.1/2017-Central Tax(Rate) dated 28.06.2017 has been amended by Notification No.14/2019-Central Tax(Rate) dated 30.09.2019 vide which entry No.80AA has been inserted in Schedule-II of the said notification and reads as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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