Pooja Enterprise(Nishith Vipinchandra Shah) vs. Na
(AAAR (Appellate Authority For Advance Ruling), Gujrat)
The appellant M/s. Pooja Enterprise, Plot No.2913, Old J Type Shed, 1st Phase, GIDC, Vapi, Gujarat-396191(Proprietor-Vipinchandra Shah) (hereinafter referred to as the appellant) is engaged in importing ‘Plastic Mechanical Liquid Dispensers’ from China and sell them in local market since 2011. The appellant has submitted that these dispensers are used as the caps of bottles and are used for dispensing liquid either through direct discharge or spray type discharge or foam type of discharge.
2. The appellant further submitted that till 30.06.2017, they were importing this material under HSN code 3923(caps and closures), but after the implementation of GST, they were asked to clear the goods under HSN 3926(other articles of plastics) bearing GST of 28%; that they were uncertain about the HSN of these imported goods as other competitors were supplying the same product under HSN 8424 and 9616, therefore they filed the application for Advance Ruling. The appellant has submitted the details of the items that they are dealing with and their utility as under:
A. Lotion Pump (HS Code 84242000): This type of pump is hand operated mechanical appliance for dispensing liquid or gel lifted through a plastic pipe which goes inside the bottle. In this type of pump, liquid is dispensed from Bottle through actuator by pressing piston by finger up and down, is mechanical in nature. This pump cannot be used without bottle and is packaging item. The materials used therein are poly propylene, LDPE, Glass Ball and SS Spring. The usage is on bottle of Hand Disinfectant, Hand Sanitizer Gel and Hand Wash Soap (Dettol Hand Wash), Tomato Soap Dispenser etc. This product can be used for multiple usages and is not related to a specific purpose.
B. Fine Mist Sprayers (HS Code 84242000): This type of pump is hand operated mechanical appliance for spraying liquid or gel lifted through a plastic pipe which goes inside the bottle. In this type of pump, liquid is dispensed from bottle through actuator by pressing piston by finger up and down, which is mechanical in nature. This pump cannot be used without bottle and is packaging item. The materials used therein are poly propylene, LDPE, Glass Ball and SS Spring. The usage is on bottle of spraying liquid like operation preparation, glass/spectacle lens cleaner, mouth freshener, hair growth medicine spray, nasal spray, car sanitizer, car freshener etc. This product is used for multiple general usages and is not related to a specific purpose. It cannot be used for multiple general usages and is not related to a specific purpose. This pump cannot be used as a perfume sprayer as it is screw type and cheap packing.
C. Foam Pump (HS Code 84242000): This type of pump is hand operated mechanical appliances for dispensing foam from liquid soap lifted through a plastic pipe which goes inside the bottle. In this type of pump, foam is dispensed from Bottle through actuator by pumping piston up and down, which is mechanical in nature. This pump cannot be used without bottle and is packaging item. The materials used are poly propylene, LDPE, Glass Ball and SS Spring. The usage is on bottle of medicated foam wash and medicated hand wash soap.
D. Cream Pump (HS Code 84242000): This type of pump is hand operated mechanical appliances for dispensing liquid or gel lifted through a plastic pipe which goes inside the bottle in this type of pump and liquid dispenses from bottle through actuator by pumping piston up and down, which is mechanical in nature. This pump cannot be used without bottle and is packaging item. The materials used are poly propylene, LDPE, glass ball and SS Spring. The usage is on bottle of hair serum for hair growth, hand disinfectant, hand sanitizer gel etc. This product can be used for multiple usages and is not related to a specific purpose.
E. Trigger Sprayer (HS Code 84242000): This type of pump is hand operated mechanical appliances for spraying/streaming liquid lifted through a plastic pipe which goes inside the bottle. In this type of pump, liquid dispenses from bottle through actuator by pressing by finger backward and forward, which is mechanical in nature. This pump cannot be used without bottle and is packaging item. The materials used are poly propylene, LDPE, glass ball and SS spring. The usage is on bottle of glass cleaner, car cleaner, air freshener, pesticides, pharmaceutical sprays etc. This product can be used for multiple usages and is not related to a specific purpose.
3. The appellant had filed an application for Advance Ruling under Section 97 of the CGST Act, 2017 asking about the HSN code and rate of tax for Plastic Mechanical Liquid Dispenser. The Authority of Advance Ruling, Gujarat (hereinafter referred to as GAAR), after studying the technical details of the product, ruled vide Advance Ruling No. GUJ/GAAR/R/34/2020 dated 03.07.2020 that imported plastic items (stated as mechanical liquid dispenser) shall be classified under HSN Chapter sub-heading 3926.90-others and are liable to GST at 28% upto 14.11.2017 and 18% GST from 15.11.2017 onwards. The appellant has stated that since they have been exposed to a totally confusing situation by the above order, customs department and classification being used in trade parlance, the world customs organization also opines that such products merit classification under Chapter 8424 of the ITC(HSN). The appellant has further submitted that the R.K.Jain GST Tariff 12th Edition 2020-21 also indicates that such products viz. sprayers or dispensing appliances would fall under Chapter 8424 (they have enclosed the relevant portion of the same). They have stated that they are preferring this appeal to settle the dust created by this classification confusion as the appellant is in the process of pleading justice at both fronts of GST as well as Customs and their business is being severely affected due to this confusion as no supply deal can be finalized conclusively due to the varying tax rates on the same product.
4. Aggrieved with GAAR’s Advance Ruling Order No. No. GUJ/GAAR/R/34/ 2020 dated 03.07.2020, the appellant has filed an appeal against the said order. The grounds of appeal are as under:
(i) GAAR has held that Chapter Heading 8424 deals with mechanical appliances (whether or not hand-operated) for projecting, dispersing or spraying liquids or powders; fire extinguishers, whether or not charged; spray guns and similar appliances; steam or sand blasting machines and similar jet projecting machines. The GAAR has grossly erred in holding that items in question are neither a mechanical appliance, fire extinguisher, spray guns and similar appliances, steam or sand blasting machines and similar jet projecting machines nor it can be classified under CTH 8424.89 because it refers to ‘parts’. Further, the GAAR on the basis of holding that items in question are neither a mechanical appliance, fire extinguisher, spray guns and similar appliances, steam or sand blasting machines and similar jet projecting machines held that 84 chapter does not cover parts of general use as defined in Note 2 to Section XV of base metal or similar goods of plastics (Plastic 39) which is actually section XVI note but not 84 chapter note, hence the exclusion made is illegal and illogical.
(ii) Appellant pleads and firmly believes that lotion pump, cream pump, fem pump, fine mist sprayer and trigger sprayers can be classified under HS code 8424.89, which states ‘mechanical appliances (whether or not hand-operated) for projecting, dispersing and spraying liquid or powder. As all these pumps are mechanical appliances piston pumps and having spring ball (non return valve) and same are used for projecting, dispersing and spraying liquid or gel. For ready reference, appellant is enclosing product drawing actual product along with its parts in un-assembled condition.
(iii) In support of the appellant’s claim, reference is laid on the recent Advance Ruling under GST, Daman, Diu and DNH reported in 2019 (22) GSTL 139 (AAR-GST) wherein plastic sprayers are held to be classified under HSN Code 84244100. Copy of order is submitted. This type of pump is simple mechanical device operated by thumb or finger or palm of hand’s pressure. This pump is used to dispense liquid from container or bottle on which it is fitted. This kind of pump is available in different neck size and dispensing capacity.
(iv) The appellant would like to rely on the Custom Circular No.6/97-Cus dated 14.3.1997 [from F.No.527/1/97 Cus(TU)] regarding the report of the 18th session of the Harmonised Systems Committee, which is reproduced hereunder:
“1. I am directed to say that in its 18th session, the Harmonised Systems Committee of the World Customs Organization had, inter alia, examined the classification of various articles. Important classification decision taken by the committee are enclosed at Annexure A. One of the decisions relates to amendment of explanatory note to Interpretative Rule 2(a) of the General Interpretative Rules. It has been decided to delete the word ‘simple’ from the explanatory note of this rule. A new para has also been added to the explanatory note. As per new explanatory note complexities of assembly method are not to be taken into account while applying this rule. A copy of the amended explanatory note is enclosed at Annexure B.
2. The HS Committee in its 17th and 18th Sessions had also finalized classification opinion in respect of articles specified in Annexure C & D. A copy of the classification opinion is also enclosed for ready reference.
3. It is requested that these decisions/classification opinions may be circulated among the assessing officers for their information and necessary action.”
(v) As the ITC-HSN of World Customs Organization has been adopted in totality by Indian Tariff of Customs and even the GST tariff so harmonious classification of any product would go a long way in easing business and taxation patterns. Further, the R.K. Jain GST Tariff 12th Education 2020-21 also indicates that such products would fall under Chapter 8424. The technical literature is submitted for ready reference.
(vi) The appellant has concluded their appeal by requesting to set aside/modify the impugned advance ruling passed by the Authority for Advance Ruling or pass any such further order as may be deemed fit and proper in the facts and circumstances of the case.
FINDINGS :-
5. We have considered the submissions made by the appellant in the appeal filed by them, their contentions during the course of personal hearing as well as evidences available on record. We have also gone through the Ruling given by the GAAR.
6. We would also like to state that the provisions of both the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 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 similar provisions of the GGST Act.
7. The Advance Ruling was sought for by the appellant for appropriate classification of their product ‘Plastic Mechanical Liquid Dispenser’ as well as the liability of GST thereon. GAAR vide Advance Ruling No. GUJ/GAAR/R/34/ 2020 dated 03.07.2020 ruled that the said product is classifiable under the Chapter sub-heading ‘3926.90-others’ of the Customs Tariff Act, 1975(51 of 1975) and is liable to GST at @ 28% (CGST 14% + SGST 14%) till 14.11.2017 and 18% (CGST 9% + SGST 9%) w.e.f. 15.11.2017. The appellant has challenged the aforementioned order of the Advance Ruling authority stating that their aforementioned products are rightly classified under Heading 8424 of the Customs Tariff Act, 1975. Therefore, the issue involved in this case is the proper classification of the product ‘Plastic Mechanical Liquid Dispenser’.
8. The appellant is engaged in importing various types of plastic devices intended to be screwed/fitted on the bottle/containers. These plastic devices are used for pumping/ dispensing liquid or lotion from a bottle and serves for the depletion of the contents, viz. liquid, gel, cream etc.. The appellant further submitted that till 30.06.2017, they were importing this material under HS Code 3923 (Caps & closure), but after implementation of GST, they were asked to clear the goods under HSN 3926 (Other articles of Plastics) bearing GST of 28%. The appellant further submitted that they were not certain about HSN of the said imported goods and other competitors were supplying same product under HSN 8424 and 9616. So, it leads to confusion and, hence, they applied for Advance Ruling on the classification of the imported goods.
9. We note that the classification of goods under GST regime has to be done in accordance with the Customs Tariff Act, 1975, which is in turn based on Harmonised System of Nomenclature popularly known as ‘HSN’. The rules of interpretation, section notes and chapter notes as specified under the Customs Tariff Act, 1975 are also applicable for classification of Goods under GST regime. However, once an item is classified in accordance with the Customs Tariff Act, 1975, the rate of tax applicable would be arrived at on the basis of notifications issued under GST.
10. The appellant in his grounds of appeal, has submitted that the GAAR has grossly erred in holding that items in question are neither a mechanical appliance, fire extinguisher, spray guns and similar appliances, steam or sand blasting machines and similar jet projecting machines nor it can be classified under CTH 8424.89 because it refers to ‘parts’ and that the GAAR on the basis of holding that items in question are neither a mechanical appliance, fire extinguisher, spray guns and similar appliances, steam or sand blasting machines and similar jet projecting machines held that 84 chapter does not cover parts of general use as defined in Note 2 to Section XV of base metal or similar goods of plastics(Plastic 39) which is actually section XVI note but not 84 chapter note, hence the exclusion made is illegal and illogical. In this regard, we find that the appellant has misunderstood the context in which the GAAR has stated that ‘Chapter 84 does not cover parts of general use as defined in Note 2 to Section XV of base metal or similar goods of plastics(Plastic 39)’. For the purpose, we will be required to refer to Section XVI of the Customs Tariff Act, 1975(51 of 1975). It is pertinent to note here that Section XVI pertains to Chapters 84 and 85 of the Customs Tariff Act, 1975 only. Note 1 of Section XVI reads as under:
SECTION XVI
MACHINERY AND MECHANICAL APPLIANCES; ELECTRICAL EQUIPMENT; PARTS THEREOF; SOUND RECORDERS AND REPRODUCERS, TELEVISION IMAGE AND SOUND RECORDERS AND REPRODUCERS, AND PARTS AND ACCESSORIES OF SUCH ARTICLES
NOTES :
1. This Section does not cover :
(a) transmission or conveyor belts or belting, of plastics of Chapter 39, or of vulcanised rubber (heading 4010), or other articles of a kind used in machinery or mechanical or electrical appliances or for other technical uses, of vulcanised rubber other than hard rubber (heading 4016);
(b) articles of leather or of composition leather (heading 4205) or of furskin (heading 4303), of a kind used in machinery or mechanical appliances or for other technical uses;
(c) bobbins, spools, cops, cones, cores, reels or similar supports, of any material (for example, Chapter 39, 40, 44 or 48 or Section XV);
(d) perforated cards for Jacquard or similar machines (for example, Chapter 39 or 48 or Section XV);
(e) transmission or conveyor belts or belting of textile material (heading 5910) or other articles of textile material for technical uses (heading 5911);
(f) precious or semi-precious stones (natural, synthetic or reconstructed) of headings 7102 to 7104, or articles wholly of such stones of heading 7116 except unmounted worked sapphires and diamonds for styli (heading 8522);
(g) parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39);
(h) – – – – – – – – – – – -;
(ij) – – – – – – – – – – – -;
10.1 As can be seen from the above, Note 1 of Section XVI contains a list of products/goods which are not covered under this Section XVI i.e. under Chapters 84 and 85. Clause(g) of the Note 1 of Section XVI mentions ‘parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39).’ It therefore becomes apparently clear from the above, that ‘similar goods of plastic’ which are ‘parts of general use’ will also not be covered under Chapter 84 or Chapter 85. As per the submission of the appellant, their products are made of plastic i.e. they are plastic devices intended to be screwed/fitted on the bottle/containers which are used for pumping/ dispensing liquid or lotion from a bottle and serves for the depletion of the contents, viz. liquid, gel, cream etc. i.e. these plastic devices of the appellant actually form parts of the bottle or container into which they are fitted in. In view of the facts mentioned above, the aforementioned products of the appellant cannot be covered under Chapter 84 of the Customs Tariff Act, 1975. We, therefore, find that the GAAR has only quoted the wordings contained in clause(g) of Note 1 of Section XVI and has not made any reference to Section XV as mentioned by the appellant. We therefore, find that the GAAR has rightly stated that Chapter 84 does not cover parts of general use as defined in Note 2 to Section XV of base metal or similar goods of plastics (Plastic 39)’
11. The appellant has also referred to a recent Advance Ruling under GST, Daman, Diu and DNH reported in 2019 (22) GSTL 139 (AAR-GST) wherein plastic sprayers are held to be classified under HSN Code 84244100 in order to support their contention. In this regard, we have to emphasize here that decisions of Advance Ruling Authorities cannot be relied upon by the appellant, since, as per the provisions of Section 103 of the CGST Act, 2017, the Advance Ruling pronounced by the Advance Ruling Authority or the Appellate Authority shall be binding only on the applicant who had sought it in respect of any matter referred to in sub-section(2) of Section 97 for Advance Ruling and the concerned officer or the jurisdictional officer in respect of the applicant.
12. Now, we come to the classification of said plastic devices, which are being imported from China by the appellant – whether it should be classified under Heading 8424 as contended by the appellant or Chapter heading (HSN) 3926 (Other articles of Plastics) as ruled by the GAAR or under any other heading of the Customs Tariff Act, 1975(51 of 1975). Further, as per explanation (iii) and (iv) of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017, “Tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the Customs Tariff Act, 1975(51 of 1975). It has also been provided therein that the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. We also find the appellant making special mention in their submission that till 30.06.2017, they were importing their product ‘plastic mechanical liquid dispensers’ under HSN code 3923(caps and closures), but after the implementation of GST, they were asked to clear the said goods under HSN 3926(other articles of plastics). Before proceeding to decide the classification of the aforementioned product, it is necessary to refer to the details of the said product with respect to its contents, uses etc. The appellant has provided pictures/images of their product. Also, as per the submission of the appellant, the materials used in the said product are Poly propylene, LDPE, glass ball and SS Spring. It can therefore be seen that the major materials used therein are of plastic. Further, these items/products are plastic devices intended to be screwed/fitted on to the bottle/containers which are solely used for pumping/ dispensing liquid or lotion from a bottle and serves for the depletion of the contents, viz. liquid, gel, cream etc. i.e. these plastic devices of the appellant actually form parts of the bottle or container into which they are fitted in. Chapter 39 of the Customs Tariff Act, 1975 covers ‘Plastic and articles thereof’. Therefore, these products appear to be ideally classifiable under Chapter 39 only.
12.1 Further, the GAAR has classified the product of the appellant ‘Plastic mechanical liquid dispenser’ under Heading 3926.90 as ‘Other articles of plastics’. However, we find that Heading 3926 of Chapter 39 is a residual entry and would therefore, cover only those plastic articles not classified anywhere else in Chapter 39 (Plastics and articles thereof) of the Customs Tariff Act, 1975. We, therefore, find it imperative to go through the various heading of Chapter 39 and after going through the same, we find that there is a Heading 3923 which covers ‘Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics. Heading 3923 of the Customs Tariff Act, 1975(51 of 1975) reads as under:
| 3923 | ARTICLES FOR THE CONVEYANCE OR PACKING OF GOODS, OF PLASTICS; STOPPERS, LIDS, CAPS AND OTHER CLOSURES, OF PLASTICS |
| 3923 10 | – Boxes, cases, crates and similar articles: Sacks and bags (including cones): |
| 3923 21 00 | — Of polymers of ethylene 3923 29– Of other plastics: |
| 3923 29 10 | — Of poly (vinyl chloride) |
| 3923 29 90 | — Other |
| 3923 30 | – Carboys, bottles, flasks and similar articles: |
| 3923 40 00 | – Spools, cops, bobbins and similar supports |
| 3923 50 | – Stoppers, lids, caps and other closures : |
| 3923 90 | – Other : |
12.2 As discussed earlier, the product ‘Plastic mechanical liquid dispenser’ of the appellant is made of plastic and intended to be screwed/fitted on to the bottle/containers which are solely used for pumping/dispensing liquid or lotion from a bottle and serves for the depletion of the contents, viz. liquid, gel, cream etc. From the functions of the product, we find that they act as a cap, lid or closure of the bottle or container into which they are fitted, besides performing the function of pumping/dispensing liquid or lotion from a bottle and serving for the depletion of the contents contained therein i.e. liquid, gel, cream etc. Further, the appellant themselves have stated that the aforementioned product which they import from China are classified under the Tariff Heading 3923 only (caps and closures). We therefore, find that an imported item/product classified under Tariff Heading 3923 cannot have a distinct or different heading/classification when sold in the domestic market, especially when we are referring to the First Schedule to the Customs Tariff Act, 1975(51 of 1975) for arriving at the classification of the products in the GST regime. Further, as regards the GAAR classifying the product of the appellant under Heading 3926.90, we find that it is a residual entry and would therefore, cover only those plastic articles not classified anywhere else in any other heading in Chapter 39. For the purpose, a reference is required to be made to Rule 3(a) of the General Rules for the interpretation of the Customs Tariff. Rule 3(a) reads as under:
“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.
12.3 We find that Heading 3926.90 is a residual entry and provides a more general description of the product whereas the heading 3923.50 provides the most specific description to the product ‘Plastic Mechanical Liquid Dispenser’ of the appellant. In view of the aforementioned facts, we find and conclude that the product of the appellant ‘Plastic mechanical liquid dispenser’ is rightly classifiable under Heading 3923.50 of the Customs Tariff Act, 1975 (51 of 1975).
13. Further, having themselves claimed that the products ‘Plastic liquid mechanical dispenser’ imported by them are classifiable under Heading 3923 of the Customs Tariff Act, the appellant is now claiming that their product is rightly classifiable under Chapter Heading 8424 of the Customs Tariff Act, 1975. They have also submitted that the R.K.Jain GST Tariff 12th Education 2020-21 indicates that their products would fall under Chapter 8424 and has submitted the technical literature of the same for ready reference. Further, although we find that the appellant has submitted images/photos of their product, no specific literature in this regard (proving that these products are classifiable under Heading 8424) has been submitted by them. Therefore, a reference is required to be made to Heading 8424 of the Customs Tariff Act, 1975 (51 of 1975), which reads as under:
| 8424 | MECHANICAL APPLIANCES (WHETHER OR NOT HANDOPERATED) FOR PROJECTING, DISPERSING OR SPRAYING LIQUIDS OR POWDERS; FIRE EXTINGUISHERS, WHETHER OR NOT CHARGED; SPRAY GUNS AND SIMILAR APPLIANCES; STEAM OR SAND BLASTING MACHINES AND SIMILAR JET PROJECTING MACHINES |
| 8424 10 00 | – Fire extinguishers, whether or not charged. |
| 8424 20 00 | – Spray guns and similar appliances. |
| 8424 30 00 | – Steam or sand blasting machines and similar jet projecting machines. |
| – Other appliances : |
| 8424 81 00 | — Agricultural or horticultural. |
| 8424 89 | — Other : |
| 8424 89 10 | — Painting equipment, including electrostatic phosphating and powder coating equipment |
| 8424 89 20 | — Industrial bellows |
| 8424 89 90 | — Other |
| 8424 90 00 | – Parts |
13.1 Relevant Chapter notes to Chapter 84 reads as under:
Heading 8424 does not cover :
(a) Ink-jet printing machines (heading 8443); or
(b) Water-jet cutting machines (heading 8456).”;
13.2 We find that Chapter Heading No.8424 deals with mechanical appliances (whether or not hand-operated) for projecting, dispersing or spraying liquids or powders; Fire extinguishers, whether or not charged; Spray guns and similar appliances; Steam or sand blasting machines and similar jet projecting machines. On going through the submissions as well as the images of their products given by the appellant, it appears that these items/products in question are plastic devices intended to be screwed/fitted on to the bottle/containers which are solely used for pumping/ dispensing liquid or lotion from a bottle and serves for the depletion of the contents, viz. liquid, gel, cream etc. i.e. these plastic devices of the appellant merely form parts of the bottle or container into which they are fitted in. Therefore, these items /products cannot be considered as a mechanical appliance for projecting, dispersing or spraying liquids or powders, or a fire extinguisher, or spray guns and similar appliance, or steam or sand blasting machines or similar jet projecting machines. Therefore, the only sub-heading (under Heading 8424) under which these products are likely to fall will be sub-heading 8424.9000 which covers ‘Parts’. As per explanatory Notes to HSN of this chapter heading, the heading 8424.9000 includes parts for the appliances and machineries of the heading 8424 only. Further, as discussed in para-10 above, Note 1 of Section XVI contains a list of products/goods which are not covered under this Section XVI i.e. under Chapters 84 and 85. Clause(g) of the Note 1 of Section XVI reads as under:
(g) ‘parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39).
13.3 As can be seen from the available details of the product of the appellant, they are parts of general use as they can be fitted/screwed into bottles/containers of any make i.e. of plastic, glass, metal etc. Also, nowhere is it contended by the appellant, that their product (which are parts) can be used only in bottles of a particular make or type. Hence, it can be construed that these items/products of the appellant can be considered as ‘parts of general use’ i.e. parts which can be used in any type/make of bottles or containers. It, therefore, becomes apparently clear from the above, that ‘items/products made of plastic’ of the appellant, which are ‘parts of general use’, will not be covered under any heading of Chapter 84. Therefore, in view of clause(g) of Note 1 of Section XVI of the Customs Tariff Act, 1975, it can be concluded that the aforementioned product ‘Plastic mechanical liquid dispenser’ of the appellant would not be covered under Heading 8424 of the Customs Tariff Act, 1975(51 of 1975).
14. Having decided the classification of the product of the appellant, we need to find out the rate of GST leviable on the said product classifiable under Heading 3923.50 which would be arrived at on the basis of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time) which contains six schedules with varying rates of CGST i.e.(i) 2.5 per cent in respect of goods specified in Schedule I, (ii) 6 per cent in respect of goods specified in Schedule II, (iii) 9 per cent. in respect of goods specified in Schedule III, (iv) 14 per cent in respect of goods specified in Schedule IV, (v) 1.5 per cent in respect of goods specified in Schedule V, and (vi) 0.125 per cent in respect of goods specified in Schedule VI. On going through the various schedules of the aforementioned notification, we find that the entry of the product ‘Plastic Mechanical Liquid Dispenser’ (which are covered under the heading 3923.50 as ‘caps, lids and other closures’ as discussed in para 12.2. above) of the appellant is found at Sr.No.108 of Schedule-III of the said notification (on which GST payable is 18% (9% CGST + 9% SGST). It reads as under:
| S.No. | Chapter/Heading/sub-Heading/Tariff item | Description of goods |
| 108. | 3923 | Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics. |
Notification No.1/2017-Central Tax(Rate) dated 28.06.2017 has been amended by Notification No.14/2019-Central Tax(Rate) dated 30.09.2019 vide which entry No.80AA has been inserted in Schedule-II of the said notification and reads as under:
| S.No. | Chapter/Heading/sub-Heading/Tariff item | Description of goods |
| 80AA. | 3923 or 6305 | Woven and non-woven bags and sacks of polyethylene or polypropylene strips or the like, whether or not laminated, of a kind used for packing of goods. |
Further, vide the aforementioned notification, Sr.No.108 of Schedule-III of Notification No.1/2017-Central Tax(Rate) dated 28.06.2017 has also been amended w.e.f. 01.10.2019, to read as under:
| S.No. | Chapter/Heading/sub-Heading/Tariff item | Description of goods |
| 108. | 3923 | Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics (except the items covered in Sl. No. 80AA in Schedule II). |
15. In view of the above, we find that the product ‘Plastic mechanical liquid dispenser’ of the appellant would be rightly classifiable under Heading 3923.50 of the Customs Tariff Act, 1975(51 of 1975) and would be liable to GST at the rate of 18% (9% CGST + 9% SGST).
16. In view of the foregoing, we modify the Advance Ruling No. GUJ/GAAR/R/34/2020 dated 03.07.2020 of the Gujarat Authority for Advance Ruling in the case of M/s. Pooja Enterprise (Proprietor-Nishith Vipinchandra Shah) and hold that –
‘The imported plastic item namely ‘Plastic Mechanical Liquid Dispenser’ shall be classified under Chapter sub-heading 3923.50 of the Customs Tariff Act, 1975(51 of 1975). The said product is liable to GST at the rate of 18% (9% CGST + 9% SGST).’
