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TMI Blog2025 (5) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... Act". The issue raised by M/s ALLIED CASTALLOYS INDIA PRIVATE LIMITED, AMER KH.NO.200, DESA, NEAR INDUSTRIAL AREA, KALADERA, JAIPUR-303801, Rajasthan (hereinafter "the applicant") is fit to pronounce advance ruling as they have deposited prescribed Fee under CGST Act and it falls under the ambit of the Section 97 (2) given as under: A. SUBMISSION OF THE APPLICANT(in brief) :- Brief facts of the case : * That the Applicant is working under the name and style of M/s ALLIED CASTALLOYS INDIA PRIVATE Limited which as is apparent is a Private limited Company registered under Companies Act, 1956 having its agriculture manufacturing unit in operation at Amer Kh. No 200., Desa, Near Industrial Area Kaladera, Jaipur. * That the Applicant is the holder of GST Registration and is inter-alia engaged in manufacturing of "Blades" cleared as "Spare Parts" for being used in Agricultural Machines, viz., Chaff Cutters Machine which is used for Cutting Straw used for Feeding Animals. B. INTERPRETATION AND UNDERSTANDING OF APPLICANT ON QUESTION RAISED (IN BRIEF) That from the very onset the bona fide, the Applicant is clearing the "Blades" as aforementioned under HSN Heading 8208 40 00 thereby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 Germination plant fitted with mechanical and thermal equipment 8436 80 90 Other . Parts: 8436 91 00 Of poultry keeping machinery or poultry incubators and brooders 8436 99 00 Other 2 and 3 of the Rules for Interpretation of Customs Tariff as applicable to GST Tariff reads as under: Rule 2 (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented; the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this Rule), presented unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nice Steel Industries reported in 2004 (163) E.L.T. 433 (Tri .- Del) placing reliance upon the Hon'ble Supreme Court's directions on the tariff classification of goods in the case of DUNLOP INDIA LTD. & MADRAS RUBBER FACTORY LTD. Versus UNION OF INDIA AND OTHERS reported in 1983 (13) E.L.T. 1566 (S.C.), observed that: The impugned goods Chaff Cutter Blade is a blade for agricultural machine Chaff Cutter. Such a blade is specifically covered by sub-heading 8208.40. Applying Rule 1 of the Interpretative Rules, the impugned goods are classifiable exclusively under Heading 82.08 which covers within its ambit cutting blades for agricultural, horticultural or forestry machines. It is also settled law that a specific Heading must be given preference over the general Heading. Once the Chaff Cutter Blades are specifically covered by Chapter 82, Note 2 to Section XVI cannot be invoked for classification in terms of Note 1(k) to Section XVI. The Explanatory Notes of HSN also support the classification of blades under Heading 82.08. The relevant Para-4, 5, 6 and 7 of the judgment are reiterated herein below: Para 4 is We have considered the submissions of both the sides. The rival ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ........... (4) For Agricultural, horticultural or forestry machines, for example, blades and knives for root cutters, straw cutter, etc. or for lawn movers, blades and segments of blades for harvesting or reaping machines." Para 7 is The Chandigarh Commissionerate Trade Notice No. 27/98, relied upon by the learned Advocate, nowhere mentions that Chaff Cutter Blades fall under Heading 84.36 as it refers only to Chaff Cutter and parts thereof. In absence of Trade Notice specifically referring to the impugned goods, it cannot be claimed by the Respondents that Trade Notice classifies the Chaff Cutter Blade is classifiable under Heading 84.36 of the Tariff. Accordingly, we allow the appeal filed by Revenue. As submitted foregoing, the judgment with utmost precision has been pronounced by the Hon'ble CESTAT very categorically, in line withthe Explanatory Notes of HSN and the Hon'ble Supreme Court's directions on the tariff classification of goods in the case of DUNLOP INDIA LTD. &MADRAS RUBBER FACTORY LTD (Supra) that, "When an article is by all standards classifiable under a specific item in the Tariff Schedule it would be against the very principle of classificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered independently as a complete machinery or as a tool. The knives are essential parts of chipper and are specially made for the purpose of machinery for chipper and it is not an independent tool for general purpose. Note 1 of Chapter 98 states that the chapter is to be taken to apply to all goods which satisfy the conditions prescribed therein, even though they may be covered by a more specific heading elsewhere in the Schedule of the Tariff. The chipper knives are, therefore, classifiable under Heading 98.06." B. Whenever the intention of the Legislature is to classify an article under a particular heading and not as a part as per the "principle use test" or "suitability of use test", a specific exclusion is put in clear terms, as has been done vide Note 2 of Section XVII. Therefore, parts of Chaff Cutter Machine are not excluded from Section XVI and are correctly classifiable and the Chapter 84 of Central Excise Act, 1985. it may please be noted that Rule 3 (a) of the General Rules of Interpretation of the tariff also provide that the heading which provides the most specific description shall be preferred to headings providing a more general description. This principle was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re to be classified with such machine. Thus, the 'Blades" manufactured and cleared by the applicant with holes at the blunt edge for being fitted with Chaff Cutter Machine with screw and bolts, squarely fall in the category of "Other Parts", as being pointed out in the Note 2 (b). It would not be out of place to mention here that the items in questions are the primary cutting part of a Chaff Cutter Machine to render the same operational for its fundamental usage of cutting the straw for preparing animal stuff. Thus, in terms of Note 2 (b), the goods and question being part of Chaff Cutter Machine which is suitable solely and principally for being used in Chaff Cutter Machine, are required to be classified along with the Chaff Cutter Machine only. D. It may further be noticed that Rule 3(c) of interpretive Rules provides that when good cannot be classified by reference of Clause (a) and (b) of Rule 3 the good shall be classified under the heading which occurs last in the numerical order among those which equally merits consideration. Your good self may please appreciate that from the provisions and description of tariff items relevant to the goods in question as discussed here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticular case or item in question, is taxable in the manner claimed by them. Mare assertion in that regard is of no avail. It has been held by this Court that there should be material to enter appropriate finding in that regard and the material may be either oral or documentary. It is for the taxing authority to lay evidence in that behalf even before the first adjudicating authority. Especially in a case as this, where the claim of the assessee is borne out by the trade inquiries received by them and also the affidavits filed by persons dealing with the subject matter, a heavy burden lay upon the revenue to disprove the said materials by adducing proper evidence. Unfortunately, no such attempt was made. As stated, the evidence led in this case conclusively goes to show that Nylon Twine manufactured by the assessees has been treated as a kind of Nylon Yarn by the people conversant with the trade. It is commonly considered as Nylon Yarn. Hence, it is to be classified under Item 18 of the Act. The Revenue has failed to establish the contrary. We would do well to remember the guidelines laid down by this Court in Dunlop India Ltd. v. Union of India [1983 (13) E.L.T. 1566 (SC) = (AIR 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this criterion is applicable. (c) when goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration." Para 29 is Interestingly Rule 2 (a) speaks about "Article", Rule 2 (b) speaks about "material or substance" as well as "goods of a given material or substance" and Rule 3 speaks about "goods". Para 30 is In the case on hand, the claim of the assessee was that the relays manufactured by them were part of the railway signaling equipment. But all the Authorities were of the unanimous view that this product is referable to goods of a specific description in Chapter sub-heading 8536.90 and that, therefore, General Rule 3 (a) will apply. Para 31 is But in invoking General Rule 3 (a), the Authorities have omitted to take note of 2 things. They are : (i) that as laid down by this Court in Commissioner of Central Excise v. Simplex Mills Co. Ltd. [(2005) 3 SCC 51 = 2005 (181) E.L.T. 345 (S.C.)] the General Rules of Interpretation will come into play, as mandated in Rule 1 itself, only when no clear picture emerges from the terms of the Headings and the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Para 36 is What is recognized in Note 3 can be called the "suitability for use test" or 'the user test'. While the exclusion under Note 2 (f) may be of goods which are capable of being marketed independently as electrical machinery or equipment, for use otherwise than in or as Railway signaling equipment, those parts which are suitable for use solely or principally with an article in Chapter 86 cannot be taken to a different Chapter as the same would negate the very object of group classification. This is made clear by Note 3. Para 37 is It is conceded by the Revenue that the relays manufactured by the appellant are used solely as part of the railway signaling/traffic control equipment. Therefore, the invocation of Note 2 (f) in Section XVII, overlooking the "sole or principal user test" indicated in Note 3, is not justified. Para 38 is On the question as to what test would be appropriate in a given case, this court pointed out in A. Nagaraju Bros. v. State of A.P. [1994 Supp (3) SCC 122 = 1994 (72) E.L.T. 801 (S.C.)], as follows : "......there is no one single universal test in these matters. The several decided cases drive home this truth quite eloquently. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 367;यमानुसार है। E. PERSONAL HEARING : In the matter, personal hearing was granted to the applicant on 06.03.2025. Mr. Rajeev Mathur (C.A.), Mr. Sanjay Khatri (Adv.) and Mr. Manoj Kedia Authorized Representative appeared for personal hearing. They' reiterated the submission already made by them. F. DISCUSSIONS AND FINDINGS 1) We have carefully examined the statement of facts, contents of the application filed by. the applicant, submissions made at the time of hearing and the comments of the jurisdictional Tax Authority. We have also considered the issue involved, on which advance ruling is sought by the applicant and other relevant facts. 2) The applicant M/s ALLIED CASTALLOYS INDIA PRIVATE LIMITED, AMER KH.NO.200, DESA, NEAR INDUSTRIAL AREA, KALADERA, JAIPUR-303801, Rajasthan is registered, with the GST department and is inter-alia engaged in manufacturing of "Blades" cleared as "Spare Parts" for being used in Agricultural Machines, viz., Chaff Cutters Machine which is used for Cutting Straw used for Feeding Animal sand clearing the same under CTH 82084000 of the Tariff Act ibid with GST @18%. 3) The prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural, horticultural or forestry machines instead of Heading 84.36 as note 1(k) of Section XVI specifically excludes articles of Chapter 82 or 83. It is also settled law that a specific heading must be given precedence over the general Heading. Note 2 to Section XVI, which govern classification of parts of machines has been applied by the applicant to classify the impugned product under Heading 84.36 is subject to Note 1 to Section XVI. Since, note 1(k) to Section XVI clearly stipulates that "This section does not cover (k) Articles of Chapter 82 or 83". Once, the Chaff Cutter Blades cleared as "Spare Parts" are specifically covered by Chapter 82, Note 2 to Section XVI cannot be inyoked for classification in terms of Note 1 (k) to Section XVI. 9) The Explanatory Notes of HSN related to chapter 82 also supports the classification of blades under Heading 82.08 as it is mentioned therein as under: "This Heading applies to unmounted knives or cutting blades .... for machines or for mechanical appliance. The Heading includes knives or cutting blades: (1)....................... (2) ....................... (3) ....................... (4) For Agricultural, horticultural or fore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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