In re Parker Hannifin India Private Limited (GST AAAR Maharashtra)
CNG Dispenser does not have a pump or a pumping function. Rather, it has simpliciter inlets and outlets which allows for movement of the CNG from the storage tank to the vehicle via the CNG Dispenser. The reason for movement of the CNG is that the pressure in the tank is low, while that of being dispensed is high. Hence, by principle of simple physics, viz., gas moves from a region of high pressure to low pressure. It is also an undisputed fact that that there is no application of external force for causing movement of CNG into the vehicle.
As per the submissions made by the Appellant regarding components of the impugned device which includes the components like pressure sensor, controller unit, which automatically control and regulate the pressure of CNG being dispensed into the fuel tank, it is observed that the impugned device would merit classification under the Chapter Heading 90.32 placed at SI. No. 422 of the Schedule III to the Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 .
Read AAR Order : CNG Dispenser falls under Chapter Heading 841311 of GST Tariff
FULL TEXT OF THE ORDER OF APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASHTRA
(Proceedings under Section 101 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
1. At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST 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 would also mean a reference to the same provisions under the MGST Act.
2. The present appeal has been fiied under Section 100 of the Central Goods and Services Tax Act. 2017 and the Maharashtra Goods and Services fax Act. 2017 [hereinafter referred to as “CGST Act” and “MGST Act”] by M/s. Parker Hannifin India Private Limited. Plot EL- 26, MIDC TTC Industrial Area, Mahape, Navi Mumbai- 400709, (“hereinafter referred to as “Appellant“) against the Advance Ruling No. GST-ARA-120/2018-19/B-90 dated 10.11.2021., pronounced by the Maharashtra Authority for Advance Ruling (hereinafter referred to as “MAAR“).
BRIEF FACTS OF THE CASE
3. Parker Hannifin India Pvt. Ltd. is a company incorporated under the Companies Act, 1956. and is, inter alien engaged in the manufacture and trading of various industrial goods such as filters, actuators, nozzles, valves, lubricators, heat shielding, purifiers, hoses and the like which find place in a lot of varied industries. The Appellant was duly registered under the erstwhile Central Excise Act, 1944 and is also registered under Goods and Services Tax (hereinafter referred to as “GST“) laws with GST Identification Number 27AAACP6820G1ZJ issued under the Central Goods and Services Tax Act. 2017. Maharashtra Goods and Services Tax Act. 2017 and equally applicable to the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the “IGST Act“).
4. So far as relevant to the present appeal, the Appellant is engaged in the manufacture and sale of “Compressed Natural Gas Dispenser” (hereinafter referred to as “CNG Dispenser“) which is supplied for use at Compressed Natural Gas (hereinafter referred to as “CNG“) dispensing stations for vehicles and automobiles, which are operated by city gas distribution Companies like Mahanagar Gas Ltd, Gujarat Gas Ltd etc.
5. The CNG Dispenser supra is installed at consumer CNG fuel dispensing station’s premises. This CNG Dispenser has an inbuilt mechanism to constantly measure and regulate the mass of natural gas being transferred to the vehicle as also the pressure of the natural gas so as to ensure that the rated pressure capacity of the CNG tank in the vehicle is not exceeded, for reasons of safety. Upon the pre-set values being reached, the CNG Dispenser, automatically, by way of a control unit and actuator, cuts the supply of CNG to the CNG tank in the vehicle.
6. To commence refueling of CNG vehicles, the drivers / operators need to unhook the nozzle from the CNG Dispenser and hook-up to the receptacle of the CNG tank in the vehicle. Thereafter, the dispensing of CNG would commence upon activation. Throughout the process of dispensing, the CNG Dispenser measures and regulates the pressure. If the pressure reaches 200 kg/cm2 (196 Bar), the CNG Dispenser will automatically and without any human intervention, stop the dispensing and cut-off supply. Further, all such refueling transaction data would be stored and subsequently downloaded into a computer or forecourt management system.
7. For ease of reference, the main parts and components of a CNG Dispenser and their function are noted infra:-
a. Mass Flow Meter: Measures the mass of CNG being dispensed into the vehicle;
b. Pressure Sensor: Measures the pressure of the CNG in the storage tank of the vehicle to ensure that it remains within the safe and recommended range;
c. Inlet banks: Allows the connection of the cascade bank at the fuel station to the CNG Dispenser;
d. Actuators, ball valves: These are the parts of CNG dispenser to ensure start and stop of the flow based on signals received from controller.
e. Tubes and hoses: These are used to route CNG from storage tank to vehicle cylinder.
f. Controller Unit: This is installed and acts as the electronic control unit to send instructions to operate the valves, actuators etc. automatically.
8. As can be seen from supra, the CNG Dispenser manufactured and supplied by the Appellant does not have any pump and neither does it perform any function of pumping. In such background, the Appellant approached the MAAR for determination of the classification of the same. Per the Appellant, as there is no pump, Heading 84.13 (pumps) is inapplicable. Further, since the CNG Dispenser can automatically control and regulate the pressure and/ or value of the CNG dispensed, it will qualify to be classified under Heading 90.32 as automatically controlling or regulating apparatus. Annexed hereto Appeal Memorandum, is a copy of the application preferred by the Appellant along with annexures including catalogues and technical drawings.
9. From a bare perusal of the same, it can be said that the CNG Dispenser does not have a pump or a pumping function. Rather, it has simpliciter inlets and outlets which allows for movement of the CNG from the storage tank to the vehicle via the CNG Dispenser. The reason for movement of the CNG is that the pressure in the tank is low, while that of being dispensed is high. Hence, by principle of simple physics, viz., gas moves from a region of high pressure to low pressure. It is also an undisputed fact that that there is no application of external force for causing movement of CNG into the vehicle.
10. In such background, the department submitted a reply to the application of the Appellant supra submitting that the CNG Dispenser is correctly classifiable under Heading 84.13 only as it is used to transmit fuel which is covered in the entry.
11. The Appellant submitted a rejoinder to the submissions of the department stating that Heading 84.13 should be read completely and it includes within its fold pumps which are used to dispense fuel and therefore, in the undisputed absence of the pump, there arises no question of application of Heading 84.13.
12. Subsequent to supra, the MAAR passed the Impugned Order No. GST-ARA- 109/2019-20/B-112 dated 15.12.2021 (hereinafter referred to as the “Impugned Advance Ruling”) vide which it has been held that the CNG Dispenser is correctly classifiable under Heading 84.13. The Impugned Advance Ruling has held that the CNG Dispensers, being correctly classifiable under Heading 84.13 are covered vide SI. No. 117, Schedule IV of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and the corresponding notifications issued under the Maharashtra Goods and Services Tax Act, 2017 and the Integrated Goods and Services Tax Act, 2017.
13. Being aggrieved by the “Impugned Advance Ruling”, the Appellant is preferring the present appeal before the Maharashtra Appellate Authority for Advance Ruling (hereinafter referred to as the “MAAAR”) on various grounds, which are without prejudice to each other.
APPLICATION FOR CONDONATION OF DELAY
14. The “Impugned Advance Ruling” dated 15.12.2021 was received by the Appellant on 16.12.2021. The present Appeal was filed by the Appellant on 09.02.2022. The Appellant submits that the accompanying appeal is within the statutory period of limitation of thirty days prescribed under Section 100(2) of the CGST Act and MGST Act, in view of the order dated 10.01.2022 of the Hon’ble Supreme Court in Re: Cognizance for Extension of Limitation [Suo Motu Writ Petition (Civil) No. 3 of 2020], in terms of which the period from 15 March 2020 to 28 February 2022 is required to be excluded for the purposes of calculating limitation. Read with the above order, it is evident that the Appellant has filed the accompanying appeal within the statutory period of limitation.
15. Without prejudice to the above and assuming that, in the opinion of the MAAAR, the above referred orders passed by the Hon’ble Supreme Court do not apply to the present case, the Appellant humbly requests the MAAAR to condone the delay in filing the accompanying appeal in exercise of powers conferred under the proviso to Section 100(2) of the CGST Act and MGST Act, for the following reasons:-
a) The drastic surge in the number of COVID-I9 cases in the country due to the spread of the new Omicron variant during late December 2021 up to late-January 2022. Several employees of the Petitioner were diagnosed with COVID-19 during this period, which adversely affected the day-to-day operations of the Petitioner; and
b) The bona fide belief of the Petitioner that the above referred orders passed by the Hon’ble Supreme Court applied to the present case, in terms of Articles 141 and 142 of the Constitution of India.
GROUNDS OF APPEAL
A. The Impugned Advance Ruling has completely ignored the scope of Heading 84.13 and incorrectly interpreted the same
16. The relevant part of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 is reproduced infra’.
