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TMI Blog2025 (5) TMI 983X X X X Extracts X X X X X X X X Extracts X X X X ..... , 0, Exhibition Road Kumher Gate, BHARATPUR-321001, 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 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 collecting and discharging the burden of GST @ 18%. The precise text of the HSN Heading 8208 40 00 is reproduced as under: 8208 Knives and cutting blades, for machines or for mechanical appliances 8208 10 00 - 8208 20 00 - 8208 30 00 - 8208 40 00 - For agricultural, horticultural or forestry machines 8208 90 - Other (i) That it is pertinent to note at this juncture that our custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3. Rules 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. (b) Mixtures, composite goods consisting of different materials or made u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eiterated herein below: Para 4 is We have considered the submissions of both the sides. The rival Tariff Headings read as under: "82.08 - Knives and cutting blades for machines or for mechanical appliances 8208.40 - For agricultural, horticultural or forestry machines 84.36 - Other agricultural horticultural, forestry, poultry, grain or dried leguminous vegetables; machinery used in the milling industry or for the working of cereals or dried leguminous vegetables; other than farm-type machinery" Para 5 is It is not in dispute that impugned goods Chaff Cutter Blade is a blade for agriculture machine Chaff Cutter. Such a blade is specifically covered by sub-heading 8208.40 of the Central Excise Tariff. According to Rule 1 of the Interpretative Rules "classification shall be determined according to the terms of the heading and any relative Section or Chapter Notes". Thus, applying Rule 1, the impugned goods are classifiable only 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 precedence over the general Headings held by the Appellate Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is by all standards classifiable under a specific item in the Tariff Schedule it would be against the very principle of classification to deny it the parentage and consign its residuary item." (vi) That on the trade / business enquiries undertaken in premise of the objections raised by our valued customers and consumers protesting the discharging tax liability at an higher rate i.e. @ 18% as against 12% in the neighboring states, we came across an Adjudication Order No. AGA-EXCUS-000-COM-12-2023-24 dated 28-07-2023 passed by the Learned Commissioner CGST & Central Excise, Agra vide DIN-20230753ZX000000D6BE wherein the Hon'ble Adjudicating Authority placing reliance the upon the principles of interpretation enumerated by the Hon'ble Supreme Court's in Westinghouse Saxby Farmer Ltd. Versus Commissioner of C. Ex., Calcutta reported in 2021 (376) E.L.T. 14 (S.C.), seeks to classify thoroughly identical goods i.e. "Blades" of "Chaff Cutters Machine" under HSN heading 8436 10 00 consequently attracting levy @ 12% on the same item on which we are discharging burden of GST. @ 18%. Copy of the Order dated 28-07-2023 is enclosed herewith as Annexure-1. Statement containing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which provides the most specific description shall be preferred to headings providing a more general description. This principle was endorsed by the Apex Court in the cases of Speedway Rubber Co. versus CCE Chandigarh reported in 2002 (143) E.L.T 8 (Supreme Court) and Forbes Gokak Ltd versus CCE Aurangabad reported in 2003(153) E.L.T 24 (Supreme Court). C. On bare reading of the description of Tariff Heading No. 8208 40 00, it is apparent that it covers the goods viz., Knives and cutting blades for machines or for mechanical appliances generally for agriculture horticulture or forestry machines purpose. Whereas Tariff Heading No. 8436 10 00 covers the goods viz., other agriculture, horticulture, forestry, poultry-keeping or bee-keeping machinery, including germination plant fitted with mechanical or thermal equipments poultry incubators and brooders for machinery; exclusively for preparing animal feeding stuffs. As submitted forgoing Note 2 of Section XVI covers Chapter 84 as follows: Note 2 is Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 84.84, 85.44, 85.45, 85.46 or 85.47) ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may please appreciate that from the provisions and description of tariff items relevant to the goods in question as discussed here in above there is no denying that in terms will rule 3(a) of the interpretative rules the headings which provide the most specific description shall be preferred to heading providing a more general description. In terms with rule 3(c) when goods cannot be classified by reference to clauses (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, therefore, in premise of Rule 3(a) or Rule 3(c), the goods in question merits classification under Tariff Heading no. 8436 10 00 in preference to Tariff Heading No. 8208 40 00. There is no denying that Tariff Heading No. 8436 10 00 is more specific in comparison to 8208 40 00 which is seemingly general in nature, in premise of the fact that former besides taking into account of description of goods also specifies the end use condition. It is by a very well settled preposition of law that specific are to be prefer over the general. In this connection we seek to place reliance upon the following precedents: (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell 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 1977 SC 597 - at page 607)], in such a situation, wherein it was stated :- ". When an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause." (Emphasis supplied) Para 16 is We concur with the reasoning and conclusion of the High Court. Attention is further invited to the Apex Court judgment in the case of Westinghouse Saxby Farmer Ltd. Versus Commissioner of C. Ex., Calcutta reported in 2021 (376) E.L.T. 14 (S.C.), the relevant 28 to 38 of the same is reproduced as under: Para 28 is Rule 3 deals with cases where goods are classifiable under two or more sub-headings. But Rule 3 begins with a reference to Rule 2(b). Therefore, it is necessary to extract Rule 2(b) and Rule 3 together. They read as follows: "2.(a) xxxx (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 ..... o play, as mandated in Rule 1 itself, only when no clear picture emerges from the terms of the Headings and the relevant section or chapter notes; and (ii) that in any case, Rule 3 of the General Rules can be invoked only when a particular goods is classifiable under two or more Headings, either by application of Rule 2(b) or for any other reason. Once the authorities have concluded that by virtue of Note 2 (f) of Section XVII, 'relays' manufactured by the appellant are not even classifiable under Chapter Heading 8608, we do not know how the Authorities could fall back upon Rule 3(a) of the General Rules. There is a fundamental fallacy in the reasoning of the Authorities, that Rule 3(a) of the General Rules will apply, especially after they had found that 'relays' are not classifiable under Chapter Heading 8608, on account of Note 2 (f) of Section XVII. Para 32 is Coming to Section XVII, which precedes Chapter 86, the same contains a few notes, one of which is Note 2, which lists out certain articles to which the expressions "parts" and "parts and accessories" mentioned in Chapter 86 do not apply. Note 2 (f) reads as follows: - "(1) xxxx (2) xxx (a) xxx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngle universal test in these matters. The several decided cases drive home this truth quite eloquently. It is for this reason probably that the common parlance test or commercial usage test, as it is called, is treated as the more appropriate test, though not the only one. There may be cases, particularly in the case of new products, where this test may not be appropriate. In such cases, other tests like the test of predominance, either by weight of value or on some other basis may have to be applied. It is indeed not possible, nor desirable, to lay down any hard and fast rules of universal application." Therefore, the respondents ought not to have overlooked the 'predominant use' or 'sole/principal use' test acknowledged by the General Rules for the Interpretation of the Schedule. C. QUESTIONS ON WHICH THE ADVANCE RULING IS SOUGHT: Q: HSN Classification of "Blades" cleared as "Spare Parts" for being used in Agricultural Machines, viz., Chaff Cutters which is meant and used for Cutting Straw for preparing Animal Feed? D. COMMENTS OF THE JURISDICTIONAL OFFICER: - Comments received from the Office of the Assistant Commissioner, State Tax, Ward-II, Circle-B, Zone- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent application has been filed by the applicant seeking HSN Classification of "Blades" cleared as "Spare Parts" for being used in Agricultural Machines, viz., Chaff Cutters which is meant and used for Cutting Straw for preparing Animal Feed. 4) We also found that the taxpayer has submitted that many manufacturers in the other states are clearing these "Blades" (thoroughly identical in all respect) as spares of Agricultural Machines, i.e., Chaff Cutters Machine under HSN Headings 8436 10 00 or 8436 80 90 and discharging the GST @ 12%. 5) Ongoing through the description of the goods manufactured by the applicant, we found that the goods manufactured by the applicant is cutting blades made of metal which is normally used in chaff cutter. 6) The issue to be decided in the impugned application is whether the goods manufactured by the applicant should be classified under CTH 8436100 as claimed by the applicant or be classified under CTH 82084000, in which he is clearing the goods now. 7) For brevity of the case, the description mentioned in tariff item no. 82084000 and 84361000 of the GST Tariff are as under: - Chapter -82 8208 Knives and cutting blades, for machines or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blades and knives for root cutters, straw cutter, etc. or for lawn movers, blades and segments of blades for harvesting or reaping machines." 10) Further, the Explanatory Notes of HSN relate to Chapter heading 84.36 includes machinery for: (A) to (D). ........ (E) Machines and appliances for preparing fodder, etc. such as (1) to (3) ......... (4) Straw, hay or silage cutter (5) to (8) ...... (F) to (H) ...... The Heading does not cover: (a) Cutting blades and knife for root slicers, straw cutters etc. (82.08). (b) to (m) ..... 11) From the combined reading of above paragraphs, it is established that the Chaff Cutter Blades cleared as spare parts merit classification under Chapter 82.08 attracting GST at the rate of 18% and not under Chapter heading 84.36 as discussed above. 12) In view of the foregoing facts, circumstances and provisions of the GST law, we pass the following ruling: RULING Q: HSN Classification of "Blades" cleared as "Spare Parts" for being used in Agricultural Machines, viz., Chaff Cutters which is meant and used for Cutting Straw for preparing Animal Feed? Ans:- As discussed above, the blades are classifiable under Chapter Heading 8208 4000 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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