In re Prag Polymers (GST AAAR Uttar Pradesh)
The classification of the ‘Switch Board Cabinet’, manufactured as per the specific design and layout provided by the Railways and supplied to the Indian Railways only and no- Where else, falls under Chapter Heading 8607 of the Customs Tariff Act, 1975.
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, UTTAR PRADESH
The present appeal has been filed under Section 100 of the Central Goods and Service Tax Act, 2017 and Uttar Pradesh Goods and Service Tax Act, 2017 (hereinafter referred to as “the CGST Act and UPGST Act”) by M/s. Prag Polymers, B-l & A-40/41, Talkatora Industrial Estate, Lucknow 226011, Uttar Pradesh (hereinafter referred to as the “appellant”) against the Advance Ruling Order No. UP ADRG 75/2021 dated 19.03.2021 issued by the Authority for Advance Ruling, Uttar Pradesh.
At the outset, we would like to make it clear that the provisions of both the CGST Act and the UPGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act, 2017 would also mean a reference to the same provisions under the UPGST Act, 2017 and vice versa .
Brief Facts of the Case
1) The appellant is a partnership firm operating as M/S Prag Polymers, B-l & A-40/41, Talkatora Industrial Estate, Lucknow and registered with GST department under GSTIN: 09AAVFP5915G1ZO.
2) As per the appellant, they are manufacturer and supplier of locomotive parts and coach (coach work/Rolling stock) parts, as per drawings and specifications approved/ provided by RDSO.
3). As per appellant, they are licensed & approved by Indian Railways for manufacturing of parts of Rolling Stock and Coach work as per design & drawings developed by RDSO. They have also been approved by RDSO for their Capacity-cum capability Assessment in order to manufacture & supply of Switch Board Cabinet for LHB Type AC EOG Coach consisting of all the power/control switchgear for coach lighting, Air Conditioning, Pantry, Pump Control, Sanitary system and public address system etc of Railways (Coach Work) to their RDSO Specification No. RDSO/ PE/SPEC/AC/0184-2015. This product is to be manufactured strictly as mandated by Railways (RDSO) specification, according to the approved QAP and drawings of Indian Railways.
4). Accordingly, the appellant has submitted an application dated 22.12.2020, before the Authority for Advance Ruling Uttar Pradesh and sought Advance Ruling as follows : –
(i) What will be the classification of coach work like switch board cabinet for railway coaches and locomotives. “
5). The Authority for Advance Ruling, vide Order No. 75/2021 dated 19.03.2021, ruled that:
i. “Switch Board Cabinet” merits classification under HSN 8537″.
6) Being aggrieved with the Order No. 75/2021 dated 19.03.2021, the appellant filed this appeal application before us.
Grounds of appeal submitted by the appellant:-
7) The appellant made the following grounds for filing of appeal:
7.1) As per tariff interpretation product ought to be classified under tariff HSN 86 as it is exclusively made as per specification provided by RDSO and other than the Indian Railways.
7.2) In order to justify the classification of the product under HSN 8537, the Advance Ruling Authority has wrongly applied and understood the circular No. 30/04/2018-GST dated 25/01/2018 issued by the Government of India, Ministry of Finance for the purposes of classification of goods specially when the circular does not make any specification/description with regard to the classification of goods but it only specifies the rate of tax on the goods supplied to the Indian Railways for its use in the coach termed as coach work.
7.3) Even as per the maintenance Manual for LHB Coach it has defined & clarified that the parts and spares used in Coaches shall be defined as Parts of Coach Work. Accordingly, the best suitable classification for Switch Board Cabinet for LHB Type AC EOG Coach consisting of all the power/control switchgear for coach lighting, Air Conditioning, Pantry, Pump Control, Sanitary system and public address system etc would be of Tariff heading 8607. Further, the appellant also paid reliance on several case laws to bolster their claim.
8) Following the principle of natural Justice, the appellant was granted personal hearing on 14th June 2021. Sh. T.K. Srivastava, Advocate/Authorised representative of the appellant appeared in personal hearing.
During the course of personal hearing, he reiterated the submissions already made vide appeal application dated 26.04.2021. He had nothing more to add.
DISCUSSION AND FINDING
9) We have gone through the submissions made by the appellant and examined the detailed explanation submitted by them. We observe that the question before us to decide is whether the product i.e. “Switch Board Cabinet” would fall under the Chapter Heading 8537 or under Chapter Heading 8607. In this regard, we observe that the Advance Ruling Authority has classified the impugned product under HSN 8537 whereas as per the appellant the said product merits classification under Chapter Heading 8607 of the Customs Tariff Act, 1975, as parts of railways.
10) As regard to the classification under Chapter 86, we observe that the Chapter 86 covers “Railway or Tramway Locomotive, Rolling- Stock and Parts thereof; Railway or Tramway Track Fixtures and Fittings and Parts thereof;
Mechanical (Including Electro-Mechanical) Traffic Signalling Equipment of all kinds”. Further, as per Chapter Note 2 of Chapter 86;
“2. Heading 8607 applies, inter alia, to:
(a) axles, wheels, wheel set (running gear), metal tyres, hoops and hubs and other parts of wheel;
(b) frames, under frames, bogies and bissel-bogies;
(c) axle boxes, brake gear;
(d) buffers for rolling-stock; hooks and other coupling gear and corridor connections;
(e) coachwork.”
11). Further, the exclusion clause under the Chapter 86 of the GST Tariff, is as follows:
“1. This chapter does not Cover:
(a) railway or tramway sleepers of wood or of concrete, or concrete guide-track sections for hovertrains (heading 4406 or 6810);
(b) railway or tramway track construction material of iron or steel of heading 7302; or
(c) electrical signaling, safety or traffic control equipment of heading 8503.”
12). Accordingly, Chapter Heading 8607 reads as under:-
