Aluminium Foil Container Falls under CTH 7615; GST at 12%: Madras HC

Veeram Natural Products Vs Commissioner of GST & Central Excise (Madras High Court)

Summary: In the case of Veeram Natural Products v. Commissioner of GST & Central Excise (Madurai), the Madras High Court ruled on the classification of aluminium foil containers under the Customs Tariff Act, 1975. The petitioner, M/s Veeram Natural Products, had classified their aluminium foil containers under Chapter 7615, which applies a 12% GST rate, while the Department argued for classification under Chapter 7607, which carries an 18% GST rate. The dispute arose over whether aluminium foil containers should be categorized as “table, kitchen, or other household articles of aluminium” under Chapter 7615 or as “aluminium foil” under Chapter 7607.The Madras High Court referred to a prior ruling by the Supreme Court in Commissioner of Central Excise v. Hindalco Industries Limited, which had settled a similar dispute in favor of the petitioner. Based on this precedent, the Court upheld the classification of aluminium foil containers under Chapter 7615 with a 12% GST rate. Consequently, the demand for higher GST at 18% was dropped, and the pre-deposited tax was ordered to be refunded to the petitioner within 30 days. The decision reinforces the principle of relying on established legal precedents for consistent tax classifications.

The Hon’ble Madras High Court in the case of M/s Veeram Natural Products v. Commissioner of GST & Central Excise, Madurai [Writ Petition (MD) Nos. 9446 to 9452 of 2024 dated July 03, 2024] held that the aluminium foil container is classifiable under Chapter Heading 7615 of the Customs Tariff Act, 1975 with 12% of GST based on Apex Court Judgment.

Facts:

M/s Veeram Natural Products (“the Petitioner”), classified their products under the heading 7615 of Customs Tariff Act, 1975 as ‘Table, kitchen or other household articles of aluminium’.

The Department contended that products are liable to be classified under the heading of 7607 as ‘Aluminium foil container’ which attracts 18% of GST.

However, the Commissioner of CGST & Central Excise (“the Respondent”) is claiming the product would come under the Chapter heading 7607 with 18% of GST.

The Respondent has passed the Order-in-Original dated June 21, 2022 (“the Impugned Order-1”) and thereafter, passed the Common Order- in- Appeal July 04, 2023 (“the Impugned Order-2”) against the Petitioner.

Hence, aggrieved by the Impugned Orders, the Petitioner has filed the present writ petition before the Hon’ble Madras High Court for the assessment period from June 2018 to June 2021.

Issue:

Whether product Aluminium Foil Container is classifiable under 7615 with GST 12%?

Held:

The Hon’ble Madras High Court in Writ Petition (MD) Nos. 9446 to 9452 of 2024 held as under:

• Relied on, M/s Veeram Natural Products Commissioner of GST & Central Excise, Madurai [Writ Petition (MD) Nos. 6485 to 6492 of 2023 dated September 13, 2023] against the order dated October 28, 2020, where the Court had disposed the writ petition by following the order of the Hon’ble Supreme Court in the case of Commissioner of Central Excise v. Hindalco Industries Limited [Civil Appeal No. 7561 of 2009 dated February 08, 2023] held that the product Aluminium Foil Container is classifiable under 7615 with GST 12%.
• Held that, while dropping the demand in the aforesaid proceedings for the period commenced from July 2022- December 2022. Hence, the writ petition was allowed  and consequently, the amount, that was pre-deposited by the petitioner, was directed to be refunded in accordance with law within 30 days.

Our Comments:

The Entry for classification is provided by Ministry of Finance vide Notification No. 01/2017- Central Tax (Rate) dated June 28, 2017:

S. No. 275A was inserted vide Notification No. 41/2017 dated November 14, 2017. It was applicable from November 15, 2017. Further, milk cans made of aluminium were inserted in the description vide Notification No. 02/2024-Central Tax (Rate) dated July 12, 2024. It was applicable with effect from July 15, 2024.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

By this common order, all these Writ Petitions have been disposed of.

2. In these Writ Petitions, the petitioner has challenged the impugned common Order-in-Appeal No.MAD-CGST-ADC-APP-18 to 24/2023 dated 04.07.2023.

3. By the impugned order, the second respondent had rejected the appeals in A.Nos.97-103/2022-GST (MDU) filed by the petitioner against the Order-in-Original No.1-07/AC/GST/2022 in DRC 07, dated 21.06.2022.

4. The dispute between the petitioner and respondents on the account of clarification of Aluminium foil container.

5. The case of the petitioner is that the products of the petitioner are classifiable under the heading 7615 of Customs Tariff Act, 1975, wherein, a contention of the Department so that the some products are liable to be classified under the heading of 7607, which attracts 18% of GST.

6. The specific case of the petitioner is that the item, in question, was to be treated as ‘Table, kitchen or other household articles of aluminium’, whereas, as per the Department, the product, in question, would be classifiable as 7607 (Aluminium foil container).

7. In these Writ Petitions, the petitioner has challenged the impugned orders, that have been passed for the assessment period from June 2018 to June 2021.

8. Earlier, the petitioner had suffered similar orders in the hands of the second respondent herein vide order No.13/2020, dated 28.10.2020, in respect of which, the second respondent had passed a Common Order No.13-19/2020 on 28.10.2020. The petitioner filed W.P.(MD)Nos.6485 to 6492 of 2023 against the said Order dated 28.10.2020. The Court disposed of these Writ Petitions filed by the petitioner in W.P.(MD)Nos.6485 to 6492 of 2023, vide Order dated 13.09.2023, following order of the Hon’ble Supreme Court in Commissioner of Central Excise vs. Hindalco Industries Limited in Civil Appeal No.7561 of 2009, dated 08.02.2022 reported in 2023 centax 132 (S.C.). The Writ Petition was allowed with the following observation:

“ 8. And the issue raised by the petitioner is settled by the Hon-ble Supreme Court in favour of the petitioner and against revenue. Therefore, this Court is of the considered opinion that the product Aluminium Foil Container is classifiable under 7615 with GST 12%. Hence the impugned order is liable to be quashed and accordingly quashed.

9. However, the petitioner has already paid tax for the month of July 2017 to November 2017 at 18%, which is accumulated credit available to the petitioner. However, this Court is not inclined to decide the refund issue, since it has to be considered on various factors. The refund is left open between the parties and the same shall be adjudicated as per Provisions of Law.

10. With these observations and directions, these writ petitions are allowed. No Costs. Consequently, connected miscellaneous petitions are closed.”

9. It appears that for the subsequent period also, the Original Authority viz., Assistant Commissioner of Central GST and Central Excise, Sivakasi Division, vide Order-in-Original No.22/AC/GST/2024, dated 28.05.2024 has dropped the demand proposed in Statement of Demand No.08/AC/GST/2023-24, dated 14.09.2023. While dropping the demand in the aforesaid proceedings for the period commenced from July 2022- December 2022. The Assistant Commissioner of Central GST and Central Excise, Sivakasi took note of the decision of this Court rendered in the petitioner’s case in W.P.(MD)Nos.6485 to 6492 of 2023 vide order dated 13.09.2023 and letter of the Legal Section, Headquarters, Madurai and has observed as under:

“9. From the above, I find that the issue raised by the taxpayer is settled by the Hon’ble High Court, Madurai vide their W.P.Nos.6485 to 6492 of 2023 dated 13.09.2023, based on the Hon’ble Supreme Court in the case of Commissioner of Central Excise vs. Hindalco Industries Limited vide judgement dated 08.02.2023 in Civil Appeal No.7561 of 2009 reported in 2023 Centax 132(SC), has held that the said product is classifiable under 7615. Hence, I concluded that the product Aluminium Foil Container is classifiable under 7615 with GST 12%.

10. Further, this office has sent a letter to the Legal Section, Hqrs., Madurai to know the present status of the Hon’ble High Court of Madurai W.P.Nos.6485 to 6492 of 2023 dated 13.09.2023, vide this office letter even no. dated 01.03.2024. The Legal Section, Hqrs., Madurai informed that the Hon’ble High Court of Madurai W.P.Nos.6485 to 6492 of 2023 dated 13.09.2023, is accepted by the Commissioner of CGST and Central Excise, Madurai vide their letter
GEXCOM/LGL/HC/GST/34/2023-Legal dated 13.05.2024.”

10. Thus, these Writ Petitions have to be allowed as the order of this Court dated 13.09.2023 in W.P.(MD)No.6485 to 6492 of 2023 has been accepted by the Commissioner GST Central Excise, Madurai, vide letter GEXCOM/LGL/HC/GST/34/2023-Legal dated 13.05.2023. Consequently, the amount, that was pre-deposited by the petitioner, was directed to be refunded in accordance with law within 30 days from the date of receipt of a copy of this order.

These Writ Petitions stand allowed, with above directions. No costs. Consequently, connected miscellaneous petitions are closed.

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