In Re: M/s. Asian Paints Ltd.
GST
2019 (1) TMI 1021 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2019 (21) G. S. T. L. 338 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 17-9-2018
GST-ARA-44/2018-19/B-117
GST
SHRI B.V. BORHADE, AND SHRI PANKAJ KUMAR, MEMBER
PROCEEDINGS
(Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by Asian Paints Ltd., the applicant, seeking an advance ruling in respect of the following ISSUE.
Whether following two categories of products will be classifiable under Entry 24 of Schedule IV of Notification No. 1/2017,-Central Taxes (Rate) dated 28.06.2017 liable to CGST at 14% or Entry 97 of Schedule III of Notification No. 1/2017- Centr
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icant is a manufacturer and dealer in paints and other chemical based products and adhesives.
1.2. Applicant is, inter alia, in the business of the buying and selling Tile Adhesives and Tile Grouting material.
1.3. The Applicant has been classifying the below mentioned two products under 24 of Schedule IV of Notification No. 1/2017- Central Taxes (Rate) dated 28.06.2017 and paying CGST thereon. The description of the products is explained below and the invoices for the products is annexed herewith in Table – 1
Table – 1
Sr. No.
Product Description
Classification adopted by NM
Invoice dated
Annexure
Tile Adhesive
i. Tile Adhesive for Normal Application
ii. Glass Tile Adhesive
iii. Tile – on – Tile Application
v. Tile Adhesive for Stone & Heavy Tile Application
Entry 24 of Schedule IV
3
Tile Grout
i. Cement based Tile Grout
ii. Expoxy based Tile Grout
Entry 24 of Schedule IV
1.4. The brief description of each of the above
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rced adhesives for fixing glass mosaic tiles in interiors as well as exteriors. The product is sold as free flowing powder. This product is mixed with water to form a slurry and is then applied on the surface (where tiles have to be fixed) using trowel. The said surface is then combed with notch trowel and tiles are fixed. It is used an adhesive for bonding of tiles to surface.
1.5.3. Tile-on-Tile application:
The product Tile-on-Tile Adhesive is single component Grey cement based polymer modified adhesives for fixing tiles over tiles on floors and walls in interiors as well as exteriors. The product contains special adhesives that provide excellent bonding & grabbing properties. The product is sold as free flowing powder. This product is mixed with water to form a slurry and is then applied on the surface (where tiles have to be fixed using trowel. The said surface is then combed with notch trowel and tiles are fixed. This product is used under the tiles to join the tiles together
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r modified tile grout for filling tile joints upto 5mm width. It is a specially formulated premium, fast selling, low shrinkage grout that prevents ingress of water through the joint. The compound consist of Cement, sand & Colorant.
1.6.2. The Epoxy based Tile Grout:
This product is a two-component epoxy resin based tin table grout specifically designed for use in application for ceramic tiles, vitrified tiles and stone joint where hygienic and sterile condition is expected. The compound consists Of Epoxy resin, Hardener & Colorant
1.7. The Applicant states that the above products are not manufactured by the applicant. The applicant buys the product from separate vendors and sells it under its brand name.
1.8. The Applicant states that under the erstwhile regime, the manufacturers of the Applicant were classifying the above products under Chapter Heading 3214. At this point it is relevant to note that the rate of excise duty for the Chapter Heading 3214 and the 3824 were same. F
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esive
iii. Tile-on – Tile Application
iv. Tile Adhesive for Stone & Heavy Application
Cement, sand & polymer
2.
Tile Grout
i. Cement based Tile Grout
ii. Epoxy based Tile Grout
i. For, cement based; Cement, sand & Colorant.
ii. For, epoxy based; Epoxy resin, Hardener & Colorant.
2.2. The Applicant submits that there are two competing entries relevant for present classification of above two categories of products.
2.3. Entry 97 of Schedule III to Notification No. 1/2017-Central Taxes (Rate) dated 28.06.2017 is extracted below for ready reference:
Schedule III 9%
S.No.
Chapter [Heading/Sub-heading/Tariff item
Description of Goods
1
2
3
97
3824
Prepared binders for foundry moulds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included
2.4. The other competing entry is Entry 24 of the Schedule IV to Notification No. 1/2017 – Central Taxes (R
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non-refractory surfacing preparations for facades, indoor walls, floors, ceilings or the like. Thus, once it is not included in the Entry 24 of Schedule IV, it will be covered under Entry 97 of Schedule III liable to CGST at 9%.
3. The Applicant submits that even by the Chapter Notes to Customs Tariff Act and the HSN Explanatory Notes, the above two categories products are classifiable under Chapter Heading 3824:
3.1. The Applicant submits that in case of any ambiguity in classification of goods under the Notification No. 1/2017, resort shall be made to the General Explanatory Notes to the Customs Tariff Act and the HSN Explanatory Notes.
3.2. The Explanation to the above Rate Notification No. 1/2017 – Central Taxes (Rate) dated 28.06.2017 is extracted below for ready reference:
Explanation.- For the purposes of this Schedule,
(i) The phrase “unit container” means a package, whether large or small (for example, tin, can, box, jar, bottle, bag, or carton, drum, barrel, or caniste
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Schedule shall, so far as may be, apply to the interpretation of this notification.
3.3. In view of the Explanation (iv), the Chapter Heading under consideration shall be interpreted on the basis of rules of interpretation of the First Schedule to the Customs Tariff Act, 1975. Before resorting to the Chapter Notes and Sub Heading Notes Of the Customs Tariff Act, the relevant Tariff Items Of the Customs Tariff Act are extracted below for ready reference:
(A): Relevant Extract of Chapter Heading 32 14:
Tariff Item
Description of goods
Unit
Rate of duty
Standard
Preferential areas
3214
GLAZIERS' PUTTY, GRAFTING PUTTY, RESIN CEMENTS, CAULKING COMPOUNDS AND OTHER MASTICS; PAINTERS' FILLINGS; NON-REFRACTORY SURFACING PREPARTIONS FOR FACADES, INDOOR WALLS, FLOORS, CEILINGS OR THE LIKE
32141000
–
Glaziers' putty, grafting putty, resin cements, caulking compounds and other mastics; painters' filling
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te for the above relevant Sub-Heading.
3.5. Thus, resort shall be made the Explanatory Notes of Harmonized System of Nomenclature published by the World Customs Organization, Brussels (HSN Explanatory Notes) to interpret the above relevant Sub-headings.
3.6. As per the plain reading of the HSN Explanatory Note on Chapter Heading 3214, the aforesaid two categories products does not fall under the Chapter Heading 3214. The relevant portion of the HSN Explanatory Notes is extracted below for ready reference:
32.14 – GLAZIERS' PUT, GRAITING puny, RESIN CEMENTS, CAULKING COMPOUNDS AND OTHER MASTICS; PAINTERS' FILLINGS; NONREFRACTORY SURFACING PREPARATIONS FOR FACADES, INDOOR WALLS, FLOORS, CEILINGS OR THE LIKE.
(B) NON-REFRACTORY SURFACING PREPARATIONS.
Non-refractory surfacing preparations are used on facades, indoor walls, floors and ceilings, swimming pool walls and floors, etc., to make them waterproof and improve their appearance. Generally they remain visible as the final surfa
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loors and ceilings, swimming pool walls and floors, etc. water proof and improve their appearance. Further the said non-refractory preparations contained in Chapter Heading 3214 generally remain visible as final surfacing.
3.8. In the present case, all the above two categories of products are non-refractory preparations. However, they are not used for water-proofing or improving the appearance of the wall of tiles. The said two categories products are used for bonding of the tiles either horizontally or vertically and to grout the gaps between tiles. Further in no case, the above two categories of products emerge as final visible surface. In fact, the Tile Adhesives are never used on the surface.
3.9. The Applicant relies on the decision of Hon'ble CESTAT in the case of Sika India Pvt. Ltd. Vs. Commissioner of Central Excise, Jaipur – 2018-TIOL-243 CESTAT-DEL = 2017 (12) TMI 892 – CESTAT NEW DELHI wherein while deciding the classification of finished products such as cement grout, re
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1975 nor the HSN Explanatory Notes defines the word “mortar”. Thus, the words not defined in the act will have to be construed based on the settled legal principles.
3.14. The Supreme Court in the case of Indo International Industries Vs. Commissioner of Sales Tax, UP – (1981) 47 STC 359 (SC) =1981 (3) TMI 77 – SUPREME COURT OF INDIA held that in interpreting items in statutes like the Excise Acts or Sales Tax Acts, whose primary object is to raise revenue and for which purpose they classify diverse products, articles and substances resort should be had not to “the scientific and technical” meaning of the terms or expression used but to their popular meaning that is to say, the meaning attached to them by those dealing in them. Further, Hon'ble Supreme Court in the case of Ramavatar Bhuadaiprasad Etc. Vs. Assistant Sales Tax Officer, Akola – (1961) 12 STC 286 (SC) = 1961 (3) TMI 55 – SUPREME COURT OF INDIA held that if a word is used in a taxing statute, it has to be understood as in
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he Apex Court while holding against the revenue and in the favour of the assesse to hold that ice cream would cover the soft serve ice cream. The Apex Court held that in the absence of a Statutory definition in precise terms; words, entries and items in taxing statutes must be construed in terms of their commercial or trade understanding, or according to their popular meaning. In other words, they must be constructed in the sense that the people conversant with the subject-matter of the statute, would attribute to it.
3.17. The Applicant submits in the present case, the product is mainly used by the civil contractors and plumbers who use the above products of the Applicant company for fixing the tiles. The said contractors and plumbers use the tile adhesives as mortars for bonding the tiles with floor or the wall.
3.18. The Applicant submits that in the absence of definition of the term “mortar” under the Act, resort can also be made to the dictionary meaning of the term mortar. As h
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used for bonding acid proof brick, tils, etc. for masonry construction and for lining chemical reaction equipment
3.20. Thus, on a plain reading of the dictionary meaning of mortar, it is clear that the non-refractory tile adhesives and tile grout products sold by the applicant is used as mortar by the actual users for fixing and bonding the tiles on the walls and floorings. It is not used as a surface finishing material. Hence, the said products will be covered under the above Chapter Heading 3824 only.
Additional submissions on 08.08.2018
Brief facts:
1.1. The Applicant is a manufacturer and dealer in paints and other chemical based products and adhesives. Applicant is, inter alia, in the business of the buying and selling Tile Adhesives and Grouting material.
1.2. The Applicant has been classifying the below mentioned six products under 24 of Schedule IV of Notification No. 1/2017- Central Taxes (Rate) dated 28.06.2017 and paying CGST thereon. The description of the products
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0%
60% to 62%
Sand
47% to 48%
Not Applicable
Additives
0% to 3%
0% to 25
Pigment
Not Applicable
0% to 0.5%
Extenders
Not Applicable
32% to 34%
Total
100%
100%
1.5. Thus, it can be seen that both the above two categories of products are mainly consisting of cement. The Tile Adhesives is consisting of at least 97% of cement and sand. Cement acts as principal binder in the product “Tile Adhesive” for fixing the tiles.
1.6. Now, the brief description of the each of the Six products in detail is given below:
1.7. Tile Adhesive for Normal Application:
1.7.1. The product Tile Adhesive for Normal Application is single component cement based polymer modified adhesive for fixing tiles on floors and walls in interior as well as exteriors. The product is sold as free flowing powder. This product is mixed with water to form a Slurry and is then applied on the surface (where tiles have to be fixed) using trowel. The said surface is then combed with notch trowel and tiles are fix
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for fixing tiles over tiles on floors and walls in interiors as well as exteriors. The product contains special adhesives that provide excellent bonding & grabbing properties. The product is sold as free flowing powder. This product is mixed with water to form a slurry and is then applied on the surface (where tiles have to be fixed) using trowel. The said Surface is then combed with notch trowel and tiles are fixed. This product is used under the tiles to join the tiles together in order to provide strength to the walls, floors, etc. where the tiles are applied. It is used an adhesive for bonding of tiles.
1.10. Tile Adhesive for Stone & Heavy Tile Application:
1.10.1. The product Tile Adhesive for Stone & Heavy Tile Application is Single component white cement based polymer modified tile adhesive specially designed for heavy stone tile applications like granite, marble on internal as well as external vertical surfaces. The product is sold as free flowing powder. This product is mix
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the product manufactured from separate vendors and sells it under its brand name.
1.14. The Applicant submits that in today's date, the market is classifying the above products under two different Chapter Headings of Customs Tariff Act, namely; Chapter Heading 3214 and Chapter Heading 3824.
1.15. The Applicant states that under the erstwhile regime, the manufacturers of the Applicant were classifying the above products under Chapter Heading 3214. At this point it is relevant to note that the rate of excise duty for the Chapter Heading 3214 and the 3824 were same. Further, since the Applicant was merely a trader, the classification issue did not arise at the hands of the Applicant under the erstwhile Excise regime.
1.16. The Applicant submits that the aforesaid products have also been imported in the past under both the competing entries. Since the rate of the tax under both the entries was same under the Central Excise Tariff Act, 1985, the applicant did not face the issue of corre
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esaid six products will be classifiable under Entry 97 of Schedule Ill liable to CGST at 9%:
2.1. The Applicant submits that above six products sold by the Applicant is non refractory chemical based preparation. The said product contains predominantly cement, sand / grit and additives mixed in powder form. The said powder is converted into slurry by adding water before application.
2.2. The above six products do not have any refractory properties and hence will fall under the non-refractory category.
2.3. The Applicant submits that there are two competing entries relevant for present classification of above six products,
2.4. Entry 97 of Schedule III to Notification No. 1/2017 – Central Taxes (Rate) dated 28.06.2017 is extracted below for ready reference:
Schedule III 9%
S.No.
Chapter/Heading/Sub-heading Tariff item
Description of Goods
1
2
3
97.
3284
Prepared binders for foundry moulds or cores, chemical products and preparations of the chemical or allied industries (inc
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of the Schedule IV. The aforesaid six products cannot be considered as Glaziers' putty, grafting putty, resin cements, caulking compounds and other mastics; painters' fillings; non refractory surfacing preparations for facades, indoor walls, floors, ceilings or the like. It is clear that the Entry 24 covers only surfacing preparations.
2.8. The term surfacing preparations has not been defined under the said Notification or the Customs Tariff Act, 1975. Once the said term is no defined under the governing laws, the said words has to be interpreted based on the settled legal principles. It is settled law that any word which is not defined under the Act will have to be first interpret by applying the common parlance theory i.e. the word has to be interpreted in the way which a common understands.
2.9. It is submitted that under the common parlance theory, surfacing preparation means something which is used on the surface as the last finishing material. The said preparations are used to
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an then set the tile or uproot the tile without damaging the tile. Thus, a tile adhesive basically is a mortar with an added capability of prolonging the period of drying and binding.
2.12. The Applicant submits that, from the above description it is clear that the Tile Adhesive is nothing but a mortar and cannot be considered as surfacing preparation. Thus, the tile adhesive cannot be classified under Chapter Heading 3214 of the Customs Tariff Act, 1975 and consequently for the GST purpose also the said products cannot be classified under Entry 24 to Schedule IV.
2.13. Thus, once it is not included in the Entry 24 of Schedule IV, it will be covered under Entry 97 of Schedule III liable to CGST at 9% which is more specific entry than any Other entry.
2.14. Entry 97 include goods of Chapter Heading 3824 which are prepared binders, chemical products and preparations of the chemical or allied industries including those consisting of mixtures of natural products.
2.15. In the present c
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whether large or small (for example, tin, can, box, jar, bottle, bag, or carton, drum, barrel, or canister) designed to hold a pre- determined quantity or number, which is indicated on such package.
(ii) The phrase “registered brand name” means brand name or trade name, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person, and which is registered under the Trade Marks Act, 1999.
(iii) “Tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, heading, sub-heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).
(iv) The rules for the interpretation of the First Schedule to the said Custom
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00
–
Glaziers' putty, grafting putty, resin cements, caulking compounds and other mastics; painters' fillings
kg.
10%
321490
–
Other :
32149010
Non-refractory surfacing preparations
kg.
10%
32149020
Resin cement
kg.
10%
32149090
Other
kg.
10%
(B): Relevant Extract from Chapter Heading 3824
Tariff Item
Description of goods
Unit
Rate of duty
Standard
Preferential areas
1
2
3
4
5
3824
PREPARED BINDERS FOR FOUNDRY MOULDS OR CORES; CHEMICAL PRODUCTS AND PREPARATIONS OF THE CHEMICAL OR ALLIED INDUSTRIES (INCLUDING THOSE CONSISTING OF MIXTURES OF NATURAL PRODUCTS), NOT ELSEWHERE SPECIFIED OR INCLUDED
3824 50
–
Non-refractory mortars and concretes:
3824 54 10
Concretes ready to use known as “Ready- mix Concrete (RMC)”
Kg.
10%
3824 50 90
Other
Kg
10%
3.
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, etc., to make them waterproof and improve their appearance. Generally they remain visible as the final surfacing. This group includes:
1. Powdered preparations consisting of equal parts of plaster and sand with plasticisers.
2. Preparations in powder form based on quartz and Cement with small, quantities of added plasticisers, used for instance, after adding water, for setting wall or floor tiles.
3. Pasty preparations made by coating minerals fillers (ground marble, quartz, or a mixture of quartz and silicate, for instance) with a binder (plastics or resins), with added pigments and, where appropriate, water or solvent.
4. Liquid preparations consisting, for instance, of synthetic rubber or acrylic polymers, asbestos fibres mixed with a pigment, and water. These are applied on facades with paint brush or spray gun and form a much thicker layer than paint.
4.1. The Applicant submits that on a plain reading of the above HSN Explanatory Notes, it can be seen that the said
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oducts such as cement grout, repair mortar, repair concrete, tile adhesives, waterproofing compounding sealants for tiles, walls etc. Hon'ble CESTAT held that the above products are not of a type used for Surfacing preparations for walls, ceilings etc. It is held that the said products cannot be classified under Chapter Heading 3214.
4.5. Thus, the Applicant submits that, the above six products will not fall under Non-Refractory Surfacing Preparations contained in Chapter Heading 3214.
4.6. The Applicant submits that the above six products will fall under Chapter Heading 3824 under the Sub Heading 3824 50 relating to Non-refractory mortars and concretes.
4.6. The Applicant submits that the Chapter Notes and HSN Explanatory Notes does not provide any specific note to interpret the said Sub-Heading 3824 50.
4.7. The said Sub-heading 3824 50 contains within its ambit Non-refractory mortar and concrete. At this point is it is pertinent to note that the neither the Customs Tariff Act, 1
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ommon parlance.
4.9. Further, Hon'ble Supreme Court in the case of Commissioner of Sales Tax, Madhya Pradesh Vs. Jaswant Singh Charan Singh – (1967) 19 STC 469 (SC) = 1967 (2) TMI 65 – SUPREME COURT OF INDIA while considering the question of whether the word “coal” covers charcoal, held that the meaning of the word 'coal' in the statute as understood in its commercial or popular sense would include “charcoal”. The Apex Court upheld the decision of High Court wherein the High Court had observed that while construing entries in a statute like the Sales Tax Acts, the Court should prefer the popular meaning of the terms used in such entries and not their dictionary meanings and that so construed charcoal would be included in the word 'coal'
4.10. The Hon'ble Supreme Court in the case of Commissioner of Central Excise Vs. Connaught Plaza Restaurant (P) Ltd. – (2012) 13 SCC 639 (SC) = 2012 (12) TMI 149 – SUPREME COURT was concerned with the question of whether the soft serve ice cream woul
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ionary meaning of the term mortar. As held by the Supreme Court in Ponds India Ltd Vs. Commissioner of Trade Tax, Lucknow – (2008) 15 VST 256 (SC) = 2008 (5) TMI 46 – SUPREME COURT the dictionary meaning is one of the valuable aid for legal interpretation.
4.13. Thus, the term “mortar” defined in various dictionaries is extracted below for ready reference:
Oxford Dictionary:
“A mixture of lime with cement, sand and water, used in building to bond bricks or stones.”
Hawley's Condensed Chemical Dictionary at Pg 863:
“A type of adhesive or bonding agent that may be either inorganic or organic, soft and workable when fresh but sets to a hard, infusible solid on standing, either by hydraulic action or by chemical cross-linking. The chief ingredients of inorganic mortars are cement, lime, silica, sulfur and sodium or potassium silicate. Organic mortars are based on various synthetic resins (epoxy, phenolic, polyester and furan). All types are resistant to acids. Some (potassium silica
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t submits that the products sold by the Applicant is mixture consisting of different goods such as cement, sand and additives.
5.3. Thus, the said products will be classifiable as per Rule 3 read with Rule 2(b) of the General Interpretation Rules to First Schedule. Rule 3 of the said Rules is extracted below for ready reference:
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
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iable under Chapter Heading 3824 being the last heading occurring in numerical order among those which merits equal consideration.
6. In view of the above, it is respectfully prayed that the question raised in the present advance ruling application be answered in favour of the Applicant holding that the above six products are classifiable under Entry 97 of Schedule III liable to GST at 18%.
03. CONTENTION – AS PER THE CONCERNED OFFICER
The submission, as reproduced verbatim, could be seen thus-
The applicant M/S Asian Paints Ltd. holder of GSTN: 27AAACA3622K12V (27760300133V/C) is a dealer manufacturing as well as trading in paint, polymers and other chemicals. Applicant has filed an application in form GST ARA-01 for advance ruling in respect of classification of goods sold by it and rate of tax applicable.
The issues involved in advance ruling are as under:
1) Correct classification of manufacturing goods i.e. “tile adhesive” and “tile grout” as per HSN code Central Excise Tar
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scription is “concretes ready to use known as readymix concrete (RMC)”. He stated that the goods manufactured by applicant is nothing but “mortars” as per tariff heading 382450 & product should fall 38245090 whose description is “other” for proving the claim Of the dealer he has given documents such as invoices, and application.
After scrutiny of documents submitted along with application, tariff heading 3824 & 3214 & description therein, primafacie it appears that applicant is manufacturer of “tile adhesive & tile grout”. Basic properties & composition of above mentioned product is as under:
1) Tile adhesive: – As per applicant tile adhesive is mixture of cements & sand and polymer i.e. methyl cellulose. This mixture is called as “polymers concrete” and the useful and for binding the surface of tile with wall. The tile adhesive act as a binder and make available maximum surface area for binding it provides adhesive strength & tensile strength to the particles.
2) Tile grout: – It i
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D BINDERS FOR FOUNDRY MOULDS OR CORES; CHEMICAL PRODUCTS AND PREPARATIONS OF THE CHEMICAL OR ALLIED INDUSTRIES (INCLUDING THOSE CONSISTING OF MIXTURES OF NATURAL PRODUCTS), NOT ELSEWHERE SPECIFIED OR INCLUDED
38241000
–
Prepared binders for foundry moulds or cores
kg.
10%
38243000
–
Non-agglomerated metal carbides mixed together or with metallic binders
kg.
10%
382440
–
Prepared additives for cements, mortars or concretes:
38244010
Damp proof or water proof compounds
kg.
10%
38244090
Other
kg.
10%
382450
–
Non-refractory mortars and concretes:
Applicant stated that tile adhesive is nothing but mixture of cement sand and polymer, which is used after adding water to make it in plaster form. So as per sub heading 38245010 it is a nothing but non refractory mortar and just like ready mix concrete and therefor products should fall under HSN Code 3824 and rare of tax should be 18%.
After scrutiny of the docu
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acing preparations are used on facades, indoor walls, floors and ceilings, swimming pool walls and floors, etc., to make them waterproof and improve their appearance. Generally they remain visible as the final surfacing. This group includes:
1) Powdered preparations consisting of equal parts of plaster and sand with plasticizers.
2) Preparations in powder form based on quartz and cement with small quantities of added plasticizers, used for instance, after adding water, for setting wall or floor tiles.
3) Pasty preparations made by coating mineral fillers (ground marble, quartz, or a mixture of quartz and silicate, for instance with a binder (plastics or resins), with added pigments and, where appropriate, water or solvent.
A plasticizer is either a non-surface active compound or an active substance added to a suspension, usually a mix, to increase the separation of particles and to prevent subsiding or clumping. It helps to improve a material's plasticity or fluidity. Plasticizers
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uilding material for residential, industrial and commercial purposes. The cement used in this concrete is rich in alumina content (aluminous cement).This is a lime-based concrete.
* Asphalt concrete – this type is used primarily for road construction. The role of cement in this case is played by bitumen, which tightly holds and binds the concrete composites in the presence of coal tar at high temperatures.
* Polymer concrete – This type is used where the cementing material is a polymer.
High temperature have the effect of weakening the bond and endangering the construction. The construction material can be cement-based or gypsum-based. Notable examples of dry mixture mortars which utilize methyl cellulose include tile adhesives, EIFS, insulting plasters, hand-troweled and machine-sprayed plaster, stucco, self-leveling flooring, extruded cement panels, skim coats, joint & crack fillers, and tile grouts. Typical usage is about 0.2% – 0.5% Of total dry powder weight for dry mixtures.
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, which are squarely applicable to the products covered by heading 3214 where in rate of tax is 28 In facts the decision given below cited by the applicant supports the view express by this office.
1) Indo International Industries Vs. Commissioner of Sales Tax, UP – (1981) 47 STC 359 (SC) = 1981 (3) TMI 77 – SUPREME COURT OF INDIA
2) Ramavatar Bhuadaiprasad Etc. Vs. Assistant Sales Tax Officer, Akola – (1961) 12 STC 286 (SC) = 1961 (3) TMI 55 – SUPREME COURT OF INDIA
3) Commissioner of Sales Tax, Madhya Pradesh Vs. Jaswant Singh Charan Singh – (1967) 19 STC 469 (SC) = 1967 (2) TMI 65 – SUPREME COURT OF INDIA
4) Commissioner of Central Excise Vs. Connaught Plaza Restaurant (P) Ltd. – (2012) 13 SCC 639 (SC) = 2012 (12) TMI 149 – SUPREME COURT
5) Supreme Court in Ponds India Ltd Vs. Commissioner of Trade Tax, Lucknow – (2008) 15 VST 256 (SC) = 2008 (5) TMI 46 – SUPREME COURT
The applicant had relied upon the decisions of Hon'ble court including apex court on the principles of common
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er Unit-III, Mumbai appeared and made written submissions.
The application was admitted and called for final hearing on 08.08.2018 when Sh. Rahul Thakkar, Advocate along with Sh. Hiral Raja, G. M. Taxation & Sh. Ajay Patel, Sr. Manager Taxation & Sh. Yogender Pandey appeared & made oral & written submissions. The Jurisdictional Officer was not present.
05. OBSERVATIONS
We have gone through the facts of the case, documents on record and submissions made by both, the applicant and the department.
The issue before us is a classification issue. The applicant has requested on a ruling as to whether “Tile Adhesive” (which includes Tile Adhesive for Normal Application, Glass Tile Adhesive, Tile-on-Tile Application, Tile Adhesive for Stone Heavy Tile Application) and “Tile Grout” (which includes Cement Based Tile Grout and Epoxy based Tile Grout) will be classifiable under Entry 24 of Schedule IV of Notification No. 1/2017-Central Taxes (Rate) dated 28.06.2017 (Chapter Heading 3214) liabl
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rer to arrive at a proper classification in respect of the goods manufactured. Just because multiple classifications attract the same rate of tax, it is not proper for a manufacturer to choose any classification that is deemed fit. The classification has to be based on the basis of a proper description of the goods.
We find that the applicant in their submissions have mentioned that the concerned products are non-refractory chemical-based preparation. Now it is seen that non-refractory preparations are covered under Chapter 3214. The applicant has submitted that in view of Explanation (iv) to the above Rate Notification No. 1/2017-C. T. (Rate) dated 28.06.2017 the Chapter Heading under consideration shall be interpreted on the basis of rules of interpretation of the First Schedule to the Customs Tariff Act, 1975. They have also stated that under the Customs Tariff Act, the Chapter Notes for the aforesaid Two Chapters 32 and 38 does not contain any specific Note for the above relevant
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uantities of added plasticizers, used for instance, after adding water, for setting wall or floor tiles.
(3) Pasty preparations made by coating minerals fillers (ground marble, quartz, or a mixture of quartz and silicate, for instance) with a binder (plastics or resins), With added pigments and, where appropriate, water or solvent.
(4) Liquid preparations consisting, for instance, of synthetic rubber or acrylic polymers, asbestos fibres mixed with a pigment, and water. These are applied on facades with paint brush or spray gun and form a much thicker layer than paint.
It is seen from (2) above that this group of Non refractory surfacing preparations which fall under Chapter 32.14 includes “preparations in powder form based on quartz and cement with small quantities of added plasticizers, used for instance, after adding water, for setting wall or floor tiles.”. The polymers used in the above mentioned products acts as plasticizers. As mentioned in their application the product Ti
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