2018 (12) TMI 1274 – APPELLATE AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA – 2019 (20) G. S. T. L. 408 (App. A. A. R. – GST) – Classification of goods – Polished / Processed limestone slabs – whether classifiable under heading 6802 of the GST Tariff or otherwise? – Held that:- The processes of ‘polishing’, ‘tumbling’ and ‘calibration’; or the state of goods as polished / tumbled / calibrated are not covered by Note 1 to Chapter 25 of the Customs Tariff Act, 1975 – it is evident that the HSN Explanatory Notes also reflect the restriction as to only certain specified processes being allowed on the products for a classification under Chapter 25 – as per HSN notes also, slabs which have been ‘polished’, tumbled and/or calibrated WOUld be covered by exclusions detailed in both General Note to Chapter 25, as well as the Heading Note to Heading 2515.
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In sum, the goods in question, limestone slabs, have admittedly been subjected to processes of ‘polishing’ (including tumbling) an
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However, the said word is used at various places denoting certain illustrative and not exhaustive list of processes.
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The Heading 6802, apart from articles, also specifically covers stone in the description itself i.e. “worked monumental or building stone and articles thereof”. The same, coupled with the HSN Explanatory Notes, as detailed and analysed above, show that such stone (limestone slabs, in the instant context) which have been ‘worked’ beyond the processes mentioned in Chapter 25 on the one hand and ‘polished’ as specified under Chapter 68 in particular reference to slabs (blocks etc.,) has to be classified under Heading 6802. There is no restrictive connotation that such working has to be done only by stone-mason or sculptor.
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The appellant has not made out a case against the decision in impugned Advance Ruling in so far as it has been ruled that “Polished / Processed Limestone slabs are. correctly classifiable under heading 6802 of the GST Tariff (sic)”. The classi
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MAR AND BANKEY SHR BEHARI AGRAWAL MEMBER A.R. Appeal -No. AAAR/01/2018 Dated: 07th August, 2018 ORDER-IN-APPEAL NO. AAAR/01/2018 (A.R.) (Passed by Telangana State Appellate Authority for Advance Ruling under Section 101 (1) of the Telangana Goods and Services Tax Act, 2017) Preamble 1. In terms of Section 102 of the Telangana Goods & Services Tax Act, 2017 ( the Act , in short), this Order may be amended by the Appellate authority so as to rectify any error apparent on the face of the record, if such error is noticed by the Appellate authority on its own accord, or is brought to its notice by the concerned officer, the jurisdictional officer or the applicant within a period of six months from the date of the order. Provided that no rectification which has the effect of enhancing the tax liability or reducing the amount of admissible input tax credit shall be made, unless the applicant or the appellant has been given an opportunity of being heard. 2. Under Section 103 (1) of the Act
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n filed under Section 100(1) of the Telangana Goods and Services Tax Act, 201 7 (hereinafter referred to as TGST Act, 2017 or the Act , in short) by M/s. Maheshwari Stone Supplying Company, Tandoor, Vikarabad District having GSTIN 36ABNPS1 863M1ZX (hereinafter referred to as M/s. MSSC /the appellant). The appellant had earlier filed an application under Section 97 (1) of the Act before the Telangana State Authority for Advance Ruling ( TSAAR or Authority or lower authority , in short), seeking an Advance Ruling with regard to classification of goods viz., Polished / Processed limestone slabs . The said application was disposed by the Authority vide TSAAR Order No.2/2018 dated 25.03.2018 = 2018 (6) TMI 458 – AUTHORITY FOR ADVANCE RULING HYDERABAD TELANGANA by pronouncing the Advance Ruling as follows : Polished / Processed limestone slabs are correctly classifiable under heading 6802 of the GST Tariff . It is against the aforesaid ruling that the present appeal has been filed. I. Whethe
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include; to bring rough limestone slabs (a minor mineral) which are by nature uneven in thickness ranging from 15 to 35 mm (or so), to our processing unit and POLISH it s one of the suitable surface with simple table polish machine and further cut it to square or rectangle shape on a table cutting machine. Out of two processes, we also opt for only one process called CUT on these stones. Some other kind of simple processes like CALIBRATION, TUMBLING etc. are also undertaken. But a stone SLAB generally do not need more than two processes before ready for selling into the market. After any kind of the process completed on a stone SLAB, the morphology doesn t change. The stone slab still remains a stone slab only, and no changes occur either in shape or in characteristic or in distinction. In essence both raw material and finished goods contain uniform Physical properties & chemical composition. After processing also our commodity still called STONE in general trade parlance. In other
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ription of commodity in particular column mentioned there under, and without writing any adjectives related to any kind of processes such as POLISH, CUT etc. it is still quite evident that they have not been taken out of Chapter 25. Please refer to HSN Code mentioned for Marble/Granite in the said notification of Dated 15/11/2017 whose first four digits are 2515/2516. It does clearly mean that even without mentioning of any kind of processes such as CUT or POLISH etc. it can be presumed that all kinds of processing activities done on these stones were allowed in the Chapter 25 itself. Therefore in the light of this statement, we are of the opinion that our commodity called Polished limestone slabs comes under any of the HSN Codes of 2515/2516/2521/2530 etc. Or more probably as stated in Chapter 25 of GST column of 5% as Goods not mentioned elsewhere in the GST goods rate list of dated 18/05/2017 . The primary commodities such as STONE in our case, which is one of the title of Chapter 2
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ocess and sawn on blocks is mostly practiced in KOTA region of Rajasthan and also in Marble/Granite Industry worldwide. Whereas surface POLISH is a process which is performed on directly brought rough stone SLABs (minor mineral) of uneven thickness and it is called BUTTERMILK like material which we usually undertake in our small scale industries. The expenses incurred on a sawn TILE is higher than combined processes of POLISH & CUT done on a SLAB of same size. In economic terms also any of the two processes combined together cannot match a single process of SAWN which is allowed in written form under HSN Code 2516. Selling price wise and quality wise also there is a huge difference in these both varieties of stones and our cheap polish slabs are mostly used in low budget housing needs. These cheap quality Polish stones are also a last resort for a customer to select from. It is noteworthy to mention here that, Processed or Mirror Polished Marble/Granite SLABs have also not been tak
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Hon ble SC while dealing with many appeals and cases upheld that POLISH & CUTTING done on a Stone slab cannot be equated to manufacturing, hence such stone slabs are not liable to ED. Under VAT regime our Polished limestone slabs were charged 5% of Tax. Hence when no ED was charged and VAT was only 5%, then our commodity shall definitely fall in Chapter 25 only, whose GST is also 5% for Limestone category, it is also noteworthy for the competent authority to note that ROYALTY is a kind of Tax as decided by majority of Judges of SC so far and the matter is still sub-judice before a larger bench now. And our commodity in its raw form suffers additional juicy fiscal burden in the form of ROYALTY at the hands of Mining authorities of State Govt. The point we want to clarify and prove before this authority is that the process of expensive and luxurious category Marble/Granite is very complex in comparison to our Polish slabs; to such an extent that processing expenses incurred only on S
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ntiating that Processed/Polished Limestone slabs cannot be taken out of Chapter 25: 1. A downloaded list (four in no.s) of Rough as well as Processed Kota, Marble and Granite stones exported to different countries from India under Chapter & HSN Code: 25 is enclosed here with as ANNEXURE-A1 as further proof substantiating that polish stone slabs have not been taken out of Chapter 25. 2. A bunch of newspaper clippings clearly stating that how GST/FITMENT Committee, of late, realized its mistake and expressing its concern having wrongly taken into consideration of EXCISE DUTY aspect, though more than 95% of industries in India are of small scale in nature. (See ANNEXURE-A2). But in our case of Tandur region almost 100% stone processing industries fall in SSI Category only. Even if they do fall in Medium scale category i.e. above TO of ₹ 1.5 Cr, then also Polishing the surface of a rough slab cannot be equated to manufacturing. If no manufacturing taken place in a factory means i
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mpetent authorities that it falls in 5% column of GST in light of all the submissions made by us here in this advance ruling case. 5. Our Turn Over is below 1.5 Cr, even if it is in between 1.5 to 5 Cr., then also it is quite enough for us to use only two digit HSN Code as per rules. And Chapter 251s (HSN Code 25) title is most appropriate of all for our polish stone which is mentioning STONE in its title. Whereas Chapter 68 s title is ARTICLES OF STONE. Article is defined as A part or segment of something joined to other parts, or, in combination, forming a structured set . But we prepare no such articles of stone in our small industry. 6. Note 6 of Chapter 25 clearly mentioning that converting of Stone BLOCK into SLABS or TILES amounts to manufacture. But we bring rough slabs only (and not blocks) from quarry to Polish it s surface and certainly this activity doesn t change either its shape or character or distinction. In this way also it is quite evident that the polish stone slabs
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ity is a manufacturing activity. 10. In the Hyderabad meeting of GST Council held on 9/09/2017, we saw that much complex processes like Stone inlay work (HSN Code 68), have been brought down to 12% from 28%, then POLISH process done on a directly brought rough slab is very less complex but much easy, in comparison to above mentioned. In fact Polish stone slab is a kind of Raw material out of many used for Stone inlay work . In this way also it is quite appropriate to keep polished limestone slabs in Chapter 25 . . . 3.3. The appellant was heard in person by the Advance Ruling Authority (TSAAR) on 27-1-2018, wherein he put forth the following written submissions: ……Now coming to the very important point is that Notification no. 41/2017 dated 14/11/2017 (central tax) while reducing the GST on Marble & Granite, it clearly mentioned on page no. 11 of the said notification that Marble and travertine, other than blocks as HSN Code 25151220/90 and Granite other than blocks as 251
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ubmitted as follows: This is to inform you that in Note 1 of Chapter 25, the word LEVIGATED is allowed on mineral products and I have gone through the Oxford dictionary meaning of LEVIGATE which had been taken from Latin word LEVIGAT, and the literal meaning of the same is made smooth, polished . In this context also it is becoming so clear that the process of POLISH is allowed on surface of rough limestone slabs in Chapter 25 itself@ GST 5%. secondly there allowed many processes in Chapter 25 under GST 5%, such as CRUSHING, POWDERING etc. on hardcore minerals which are expenditure wise also much costlier than POLISH done on surface of a rough slab by using a simple polish machine III. Advance Ruling Order: 4. After examining the issues, the Authority (TSAAR) passed the impugned order, wherein (after briefly summarising facts, application-contents etc.), the submissions made by the applicant during personal hearing and the Authority s discussion/findings are recorded as follows: &helli
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ned together cannot match a single process of SAWN which is allowed in written form under HSN Code 2516. Selling price wise and quality wise also there is a huge difference in these both varieties of stones and their cheap polish slabs are mostly used in low budget housing needs. These cheap quality Polish stones are also a last resort for a customer to select from. c) Processed or Mirror Polished Marble/Granite SLABs have also not been taken out of Chapter 25 which is evident from the Notification No. 41/2017 issued after GST Council s Guwahati meeting held on 10-11-2017. The rate of GST on these stones have been reduced from 28 to 18 classifying under the same chapter of 25. It does mean that without mentioning of word POLISH or any other process for Marble/Granite under description column, they have been retained in Chapter 25 only and further bear a meaning of such as Polished, Cut etc. Likewise, they are also expecting the same treatment for their processed limestone SLABs. In fac
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n its raw form suffers additional juicy fiscal burden in the form of ROYALTY at the hands of Mining authorities of State Government. The process of expensive and luxurious category Marble/Granite is very complex in comparison to their Polish slabs; to such an extent that processing expenses incurred only on SAWN process of Granite/Marble is 2-4 times higher than the entire material cost of Processed Limestone slab itself of same surface area. e) Hence, finally it was submitted that at any angle it is appropriate that their commodity called Polished/Processed limestone slabs should not be taken out from chapter 25. Therefore, in light of their submissions they request the advance ruling authority to declare that POLISHED or PROCESSED LIMESTONE SLABS comes under any of the HSN Codes of Chapter 25. 4. The applicant is seeking advance ruling in respect of classification of processed/polished limestone slabs and with a submission that the said goods are correctly classifiable under chapter
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products only in the crude state. Minerals which have been otherwise processed (e.g., made up into articles by shaping, carving etc,) generally fall in latter chapters (for example, chapter 28 or 68). 7. The heading 25.15 covers Marble, Travertine, Ecaussine and other Calcareous Monumental or Building stone of an apparent specific gravity of 2.5 or more and Alabaster whether or not roughly trimmed or merely cut and is restricted to the stones specified, presented in the mass or roughly trimmed or merely cut, by sawing or otherwise, into blocks or slabs of a rectangular(including square) shape. > Blocks, etc., which have been further worked, i.e., bossed, dressed with pick, bushing hammer or chisel, etc., sand-dressed, ground, polished, chamfered, etc., are classified in heading 68.02. 8. The subheading explanatory notes for subheading 2515.11 are given below: > For the purposes of this subheading, crude refers to blocks or slabs which have been merely split along the natural cle
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t by sawing must bear discernible traces of the sawing (by wire strand or other saws) on their surfaces. 10. The heading 25.16 covers Granite, Porphyry, Basalt, sandstone and other monumental or Building stones, whether or not roughly trimmed or merely cut, by sawing or otherwise into blocks or slabs > The stones of this heading may be shaped or processed in the same ways as the stones of heading 25.15 (including building limestone or Portland stone) and that stones in shapes identifiable as road or paving setts, flagstones or curb stones are classified in heading 68.01 even if merely shaped or processed as specified in the text of this heading. 11. The heading 25.21 covers limestone flux and limestone and other calcareous rocks commonly used for the manufacture of lime or cement, not being building or monumental stone (heading 25.15 or 25.16). 12. Thus it is very clear from the above explanatory notes given for heading 25.15, 25.16 & 25.21 that stones which are roughly trimmed
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shaping into blocks, sheets or slabs by splitting, roughly cutting or squaring by sawing(square or rectangular faces). > The heading thus covers stone in the forms produced by the stone-mason, sculptor, etc., viz: (A)…….. (B) Stone of any shape (including blocks, slabs or sheets), whether or not in the form of finished articles, which has been bossed (i.e., stone which has been given a rock faced finish by smoothing along the edges while leaving rough protuberant faces), dressed with the pick, bushing hammer, or chisel, etc., furrowed with the drag-comb, etc., planed, sand dressed, ground, POLISHED, chamfered, moulded, turned, ornamented, carved, etc. > The heading therefore includes not only constructional stone (including facing slabs) worked as above, but also articles such as steps, cornices, pediments, balustrades, corbels and supports, door or window frames and lintels, window sills, door steps. 14. A complete reading of the above Explanatory notes clearly sp
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ersonal Hearing & Further submissions : 5.1. Against the above Advance ruling Order, the appellant filed the present appeal on the following grounds: ..We have received the copy of order no. 2/2018 of AAR on 17/04/2018 by regd. post which is enclosed here with as ANNEXURE-AAI. We are a tiny & SSI unit involved in processing of limestone slabs. In any of the processing activity at our unit, a rough stone slab brought as a raw material always remains a stone slab only even after processing and the morphology of slab doesn t change. Our small factory run for 6-8 hours a day for 5 days a week on average and our production capacity is not more than around 2000 square meters per month i.e. 4 to 12 thousand pieces of stone slabs depending on sizes. Apart from the above, our company is also largely involved in trading of limestone slabs such as merely cut etc. of chapter 25 without bringing them to our SSI Unit. We request AAAR to pay special attention to stressed/underlined phrases of
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it was announced by all the heads of concerned GST that the Rate of ED coupled with VAT had been fixed the rate of a product under GST. Then instead of Customs, the Excise Tariff could have been taken as a base. There is huge a difference in Chapter notes of Customs & Excise for same Chapter, which can change the meaning, definition and interpretation of a product/commodity. Hence it is becoming very difficult for us to digest this fact of contradictory statement. The AAR had not taken all the submissions made by us into consideration and it seems either overlooked such issues which were in our favour and didn t comment on those at all in their verdict. One such being as all RDs involved in processed stone slabs at source point in Telangana are falling under below 1.5 Cr. Turnover category, as such at the most they can write only two digit HSN code as per HSN Rules. And it had mentioned in GST goods rate list under HSN 25 that it covers Goods not mentioned elsewhere and this questi
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ood things of great joy for small tax players. Can this AAAR explain us how good things of great joy can be brought for us when our processed stone s Tax rate which was 5% under VAT regime had suddenly been increased to 18% under GST as per AAR s ruling of classification of HSN 6802? 3. We are of the strong view that for domestic trade; norms of Excise tariff act shall be taken into consideration and not that of Customs which deals mainly with IMPORTATION of Goods. 4. If Excise were taken as a base, then it is very clear from explanation of schedule 1 of classification of excisable goods is that a) Each chapter contains goods of a particular class, b) The chapters are arranged classifying all goods of a kind beginning with RAW MATERIAL and ending with the FINISHED PRODUCTS, within the same chapter. Thus it is very clear that Rough limestone slabs brought as a raw material after being converted into processed limestone slabs as finished product cannot be taken out of said Chapter more s
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dity of Processed limestone slabs which is uncalled for and without merits. Even when a classification of a product takes place under general interpretation rules, the trade parlance of the product must be checked first while classifying the product and not its technological manipulation. Where the product is classified on the very first level, then there is no need to drill down further in the strata below. Whether RAW or FINISHED our stones are called STONES, BUILDING STONES, FLOORING STONES in the market but not WORKED BUILDING STONE. 6. The AAR didn t consider that the GOODS under CETH 6802 are shaped articles and further worked by a Stone-mason or sculptor. Limestone slabs in question are not such goods which are otherwise simply polished & cut and this activity would not change the morphology, character, name, description, purpose and usage of stone slabs to that of articles mentioned within the scope of heading 6802. Such processes would thus not take out their classificatio
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ing heading of HSN with Chapter notes etc. had relied upon non-legal backing aspects such as explanatory notes and interpretative rules in deciding the classification of processed limestone slabs which is not correct. First they could have exhausted the legal backing aspects of Chapter notes and if they found any ambiguity then they might have entered into explanatory notes and interpretative rules. Even Chapter note 1 of both customs & excise permitting that mineral in crude form undergone the processes such as mechanical or physical or levigating can still be retained in chapter 25 only and our processed stone s story is not better than these narrated processes herein of chapter note 1. 9. The AAAR is requested to go through the comparison table in ANNEXURE-AA3 enclosed here with for better understanding of our case in a nutshell. 10. Customs norms are mostly dictated by Customs co-operation council-Brussels under GATT and interpretation rules, explanatory notes therein, have bee
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ly been changed and even after that it had been retained in Chapter 25 only!!! A block is no longer remained a Block but split into tiles/slabs thus changing its shape and usage. 12. Even there are many Excise judgments for Polished Marble/Granite not taking them out of Chapter 25. One such being in case of Classic Marble Company Pvt. Ltd. Vs Commissioner of Central Excise & ST., Vapi in 2013(11) TMI 384 – CESTAT Ahmedabad delivered in Nov 2013, where it was held that Polished Marble/Granite cannot be taken out of Chapter 25. 13. The ruling of AAR will put our low cost processed stones under much higher bracket rate of GST without considering the selling price and other phenomena. Hence almost all kinds of stones whether low cost or luxurious after processing will now have to suffer GST @ 18% (under HSN Code 68) including much lower category and cheaper stones like of our processed LIMESTONE SLABS. By doing so the AAR had put all verities of EGGS into one basket without considering
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single limestone slab processing industry was either falling under excisable goods category nor Govt, earned a single paisa towards ED under VAT regime. When there was no gain in ED and VAT was only 5% even for processed slabs, then on what basis the AAR/GST Council is increasing our Tax base to 18% in the name of heading 6802? It is also not proper to take EOU as a benchmark in fixing the GST rate for our commodities, because there in EOU not only chain of value addition would be very high and more but also lot of transformation in shape of the article takes place from RAW to FINISH. 15. Tandur rough limestone slabs available always in uneven thickness are not of so special value in the market and the marketable quality of these stones is slightly enhanced by polishing and cutting. But the substance of the material is not altered. The stone slab is made more presentable and attractive for the benefit of the low budget housing or commercial users and it cannot be said that the activity
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e other hand if GST Council fix the rate of Tax on all kinds of low cost processed limestone slabs (produced from RAW slabs only and not to be confused produced from BLOCKS) in India to 5%, then also it may not amount to a decrease of INR 500 Crores per annum, though in actual terms it is not at all a decrease because under VAT regime our finished product was also charged only 5%. 17. From the above statement of point 16, at one end GST Council by reducing a TAX base unnecessarily has bringing loss to itself, where as small businessmen like us have been treated very unfairly by increasing GST to 360% in the name of classification of HSN 6802. We are unable to understand the modus operandi being adopted by GST Council/Fitment committee in fixing the rates of GST for commodities more so in such a circumstances where they themselves are telling that GST brings good things of great joy for small tax players !!! In the name of classification of HSN code 6802, if the GST Council/Fitment Comm
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are exempted from e-way bills. So our humble request to the AA/GST Council is not to make honest people to become dishonest. 19. The GST had been rolled out with another great slogan- One nation, one market and one tax , whereas ROYALTY is a kind of Tax being paid by a quarry owner on Raw material at pit s mouth and ultimately that burden has to be bear by a RD like us. In this way also at least it is not proper to classify our processed stones under heading 6802 of higher tax bracket rates. 20. In paragraph no. 6 of the order, the AAR mentioned that As per Chapter notes to 25, the headings of this chapter covers mineral product only in the crude state. If this were the case then why CEMENT a highly processed material manufactured with composition of various minerals had not been taken out of chapter 25? Why the ARTICLES made of CEMENT which are shaped such as grills, sheets etc., have been thrown into chapter 68? Even Marble/Granite other than blocks mentioned under 18% column of Cha
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version of blocks into slabs or tiles only. 22. On harmonious reading of Note 1 and Note 6 of Chapter 25 of CET and in view of the opening qualifying phrase Except where the context or Note 4 to this Chapter otherwise requires, used in Note 1 and sizing and polishing being specifically included in Note 6, the inference is obvious that even after the natural stone slabs are subjected to the said processes, the final product would remain classified under Chapter 25; > that, further, the said Chapter Note 1 does not state nor it can be interpreted to mean that the said processes carried out by us on natural stone slabs would amount to manufacture. 23. On harmonious reading of contents of paragraph no. 9 of AAR s said order, the blocks and slabs which have been merely cut by SAWN must bear discernible traces of the sawing on their surfaces. Thus it is very clear that a BLOCK undergone the SAWN process will produce tiles/slabs of even thickness which are coarse finished on their surfaces
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ns made by us, we humbly request this AAAR to declare that our Processed limestone slabs cannot be taken out of Chapter 25. Since we have submitted all possible material which might .helpful this AAAR to declare our goods in Chapter 25, hence there is no need for personal hearing and further AAAR is requested to pass the order on merits of our submissions at the earliest possible. 25. If at all this AAAR finds it difficult to take out processed limestone slabs from Chapter 68 on legally backed grounds unknown to us and better known to them, then at least AAAR could recommend to GST Council/Fitment Committee or Appropriate Authority to fix the GST Rate as 5% for our commodity based on our genuine and justified facts and submissions submitted herein above and enclosed here with in enclosed ANNEXURES. This can also be done in heading 6802 by creating 5% GST column for such kind of lower cost stones where morphology in RAW & FINISH doesn t change at all . 5.2. The appellant made furthe
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Therefore it is very clear from the above statement, that even if Customs Tariff taken into consideration though without our admission of the fact (Since Excise Tariff is genuine), then also Chapter note 1 of Chapter 25 is allowing mechanical processes such as CRUSHING, GRINDING / LAVIGATING etc. on minerals in crude form to be retained in said chapter 25 only. Moreover physical processes have also been allowed in said chapter note. If one were to go through the meaning of mechanical process then it states as under: Made, performed, or operated by or as if by a machine or machinery. 2. A mechanical process concerned with machines or machinery. 3. Relating to or controlled or operated by physical forces. In the backdrop of above meaning if one were to look at the simple processes we are performing on our low cost limestone slabs, then one will understand that POLISHING is nothing but mechanical process of GRINDING/LAVIGATING done on the surface of rough limestone slab with application
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out of chapter 25 . 5.3. The Appellant was given personal hearing before this Appellate authority on 07-06-2018. Sri Rajgopal Sarda, Proprietor appeared for the hearing and reiterated and explained the various submissions in his appeal. As to the arguments made by the AAR w.r.t. the Explanatory Notes, he mentioned that the AAR was legally not justified in relying upon the Explanatory Notes. He had nothing further to add. 5.4. Vide a letter dated 12/06/2018, the appellant put forth the following further submissions: With respect to my Appeal under GST for Tandur stone slabs, if your good self consider following few lines, then it would become so clear that why polished stone slabs of Tandur fall under Chapter 25 of Customs tariff only. 1. Kindly differentiate between a BLOCK & a SLAB as raw material undergoing the various processes. Slabs/Tiles derived from a Block come under manufacturing (shape is changed) activity, where as a rough stone slab undergone Polish or cutting processe
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Customs Tariff, It is clearly mentioned that the further processes such as GRINDING, LEVIGATING, MECHANICAL, PHYSICAL done on raw material in crude form are still allowed in same Chapter of 25. Hence our job is nothing but to bring rough limestone slabs which are in crude form and perform polish & cut processes on them which are all nothing but comes under Mechanical processes. Polishing on a rough slab is nothing but grinding only. Even the literal meaning of Levigating is nothing but smooth or polished. 5. Literally speaking our Polished limestone slab is a MINERAL PRODUCT only and nothing more than that and this is what the title of Section V under Customs Tariff speaks about and Chapter 25 is a part of it. 6. Note 1 (a) of Chapter 68 of Customs Tariff Act is clearly excluding the goods of Chapter 25. Hence in all the above perspectives, it can be said that why rough stone slabs brought as a raw material even after polish shall be retained in Chapter 25 only, more so in such cir
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behind fixing such quantum of levy; arguing as to purported discrimination / inequity by citing lesser rate of GST-levy fixed in respect of other products / commodities – Water bottles, marbles, granites etc., and industries/sectors having highly mechanised processes etc., compared to small-scale units and so forth. Certain other submissions are also made by referring to newspaper reports/clippings, GST-captions/slogans, effects of the higher rate on small scale units, employment-aspects, etc. 8.2. We find that such submissions/contentions cannot merit consideration in the present proceedings before this forum since (i) the basis / rationale and reasoning in fixing quantum of levy @ 28% (or 18% as subsequently reduced), is a policy-decision of the Government(s) / statutory GST Council, which cannot fall for examination/consideration in the realm of appeal proceedings under the statute and are beyond the scope/domain of powers of this Authority being a creature of the statute; (ii) the
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s only the first two questions and not the remaining questions. Though the ruling rendered covering the first two questions would lead to and imply a negation / negative ruling in respect of the remaining three questions, propriety of the proceedings required specific ruling with regard to each question raised. 8.4. Notwithstanding the aforesaid, we note that the statutory mandate vide Section 101 (1) of the Acts, requires this Appellate authority to pass an order, inter-alia, confirming or modifying the Ruling appealed against. This in itself necessitates detailed analysis of the statutory provisions and related material/aspects (HSN notes) to arrive at conclusion as to the correctness or otherwise of the Advance Ruling impugned before us. We accordingly proceed to do so. 9. The main question for determination in this appeal is the correct classification of the goods viz., Polished / Processed Limestone slabs, for the purposes of GST levy. Whether the same would fall under specified h
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f sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent. , as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person . 10.3. Notification No. 1/2017-CT (Rate) dated 28 June, 2017, effective from 1st July, 2017, issued by the Central Government notified the rates of Central Tax for goods, as specified in Schedules I to VI thereto. The said Notification was issued by the Central Government in exercise of the powers conferred by subsection (1) of section 9 of the Act, on the recommendations of the Council. 10.4. Entries in the above-said Notification (as amended), relevant for the issue on hand (including those referred by appellant), read as
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10or Stone inlay work 11176A 6802 Statues, statuettes, pedestals; high or low reliefs, crosses, figures of animals, bowls, vases, cups, cachou boxes, writing sets, ashtrays, paper weights, artificial fruit and folia e, etc.; other ornamental goods essentially of stone ; SCHEDULE III – 9% S.No. Chapter/Heading/Sub-heading/Tariff item Description of Goods (1) (2) (3) 12 26A 2515 12 20, 2515 12 90 Marble and travertine, other than blocks 26B 2516 12 00 Granite, other than blocks ; 13 177A 6802 All goods other than :- (i) all goods of marble and granite; (ii) Statues, statuettes, pedestals; high or low reliefs, crosses, figures of animals, bowls, vases, cups, cachou boxes, writing sets, ashtrays, paper weights, artificial fruit and foliage, etc.; other ornamental goods essentially of stone ; 146702 Artificial flowers, foliage and fruit and parts thereof; articles made of artificial flowers, foliage or fruit ; 15177E 6802 Worked monumental or building stone (except slate) and articles ther
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per weights, artificial fruit and foliage, etc.; other ornamental goods essentially of stone] 10.5. The Notification contains an Explanation, relevant portion thereof being as under: Explanation. – For the purposes of this notification, – ………. (iii) Tariff item sub-heading heading and Chapter shall mean respectively a tariff item, sub-heading, 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 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 . . . 10.6. From the above, it is seen that the statutory provision vide the charging Section 9 of the Acts, mandates that the rates of GST would be as per recommendations of the GST Council and notified by the Government. The Notification No. 1 /201 7-Cen
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However, as detailed supra, the GST-rate notification specifically provides for applicability of the Customs Tariff and related Rules for Interpretation/Explanatory Notes. Thus, appellant s contentions in this regard are found to be not valid, as the statutory Notification makes it abundantly clear that for classification of goods in GST, the Customs Tariff is to be followed. 11.2. Further, other grounds / submissions put forth by the appellant are to the effect that the processes undertaken by them do not amount to manufacture or that there is no change/transformation in the nature / substance / character / description, usage etc., of the products. Reference in this regard was also made to Note 6 to Chapter 25 of the Central Excise Tariff mentioning polishing as deeming to be manufacture. As seen, these grounds/submissions are based upon the entries and Chapter / Heading notes in the Central Excise Tariff Act, 1985. These can have no relevance vis-d-vis the levy of GST since:- (i) th
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hence, reference to the same by the lower Authority is not correct / not tenable. Reliance in this regard was also placed on the decision of Hon ble Tribunal in the case of Madhusudan Ceramics vs Collector of Central Excise 1991 (53) ELT 90 Tri Del = 1990 (11) TMI 244 – CEGAT, NEW DELHI. We have examined the contention. The HSN (Harmonised System of Nomenclature) Explanatory Notes (formal description being the Brussels Convention on the Harmonised Commodity Description and Coding System (HCDCS)), contain the internationally accepted nomenclature and classification of goods and India is a signatory to the said convention. It is a well-settled legal proposition that where the Tariff-Schedule is based upon and structured on the same pattern as the HSN, the HSN Notes are relevant and a safe guide for deciding issues of classification. This principle has been enunciated in a catena of judgements, including those of Hon ble Supreme Court in CCE, Shillong vs Wood Craft Products Ltd. 1995 (77)
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he issue in favour of the party by allowing their appeal and thereby, it should be considered that Hon ble Tribunal had upheld the contention as to non-applicability of HCDCS. On perusal of the said case-law, it is observed that though the party made such a plea, the same was neither part of ratio decidendi of the decision nor was the said plea either expressly or impliedly affirmed / upheld by the Hon ble Tribunal which decided the appeal basing on interpretation of the relevant Chapter Notes alone. 12.3. In view of the above, we find no merit in appellant s contentions against consideration of HSN Explanatory Notes for deciding the subject issue. 13. However, we find force and validity in the appellant s contentions vide letter dated 12-6-2018 that the lower Authority has directly referred to HSN explanatory Notes etc., without first analysing the Heading-description(s) and relevant Notes in Chapter 25 and in fact has not at all touched the Note I to Chapter 25. As indicated by us ea
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paragraphs). SECTION V MINERAL PRODUCTS Chapter 25 Salt; sulphur; earths and stone; plastering materials, lime and cement Notes: 1. Except where their context or Note 4 to this Chapter otherwise requires, the headings of this Chapter cover only products which are in the crude state or which have been washed (even with chemical substances eliminating the impurities without changing the structure of the product), crushed, ground, powdered, levigated, sifted, screened, concentrated by flotation, magnetic separation or other mechanical or physical processes (except crystallization), but not products that have been roasted, calcined, obtained by mixing or subjected to processing beyond that mentioned in each heading. The products of this Chapter may contain an added anti-dusting agent, provided that such addition does not render the product particularly suitable for specific use rather than for general use. 2. This Chapter does not cover : … (e) setts, curbstones and flagstones (head
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1 00 – Crude or roughly trimmed kg. 2516 12 00 – Merely cut, by sawing or otherwise, into blocks or slabs of a rectangular (including square) shape kg. 2516 20 00 – Sandstone kg. 2516 90 – Other monumental or building stone : 2516 90 10 Pakur stone kg. 2516 90 20 Stone boulders kg. 2516 90 90 Other kg. 2521 LIMESTONE FLUX; LIMESTONE AND OTHER CALCAREOUS STONES, OF A KIND USED FOR THE MANUFACTURE OF LIME OR CEMENT 252100 – Limestone flux; limestone and other calcareous stones, of a kind used for the manufacture of lime or cement : 2521 00 10 Limestone flux (L.D., below 1 % SiO 2) kg. 2521 00 90 Other kg. 2530 MINERAL SUBSTANCES NOT ELSEWHERE SPECIFIED OR INCLUDED 2530 10 – Vermiculite, perlite and chlorites, unexpanded : 2530 10 10 Vermiculite kg. 2530 10 20 Perlite kg. 2530 10 90 Others (including powder) kg. 2530 20 00 – Kieserite , epsomite (natural magnesium sulphates ) kg. 2530 90 – Other : 2530 90 10 Meerschaum (whether or not in polished pieces) and amber agglomerated; m
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ple, quartzite, flint, dolomite and steatite) similarly worked; it does not, however, apply to slate. 6802 WORKED MONUMENTAL OR BUILDING STONE (EXCEPT SLATE) AND ARTICLES THEREOF, OTHER THAN GOODS OF HEADING 6801; MOSAIC CUBES AND THE LIKE, OF NATURAL STONE (INCLUDING SLATE), WHETHER OR NOT ON A BACKING; ARTIFICIALLY COLOURED GRANULES, CHIPPINGS AND POWDER, OF NATURAL STONE (INCLUDING SLATE) 6802 10 00 – Tiles, cubes and similar articles, whether or not on a backing; artificially coloured granules, chippings and powder, of natural stone (including slate) not rectangular (including square), the largest surface area of which is capable of being enclosed in a square the side of which is less than 7 cm; artificially coloured granules, chippings and powder kg. – Other monumental or building stone and articles thereof, simply cut or sawn, with a flat or even surface : 6802 21 – Marble, travertine and alabaster : 6802 21 10 Marble blocks or tiles kg. 6802 21 20 Marble monumental stone kg. 6
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article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished articles has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to principles of rule 3. 3. When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under tw
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which occurs last in numerical order among those which equally merit consideration. 4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin [Rules 5, 6, General Notes and Additional Notes are not reproduced since not relavant] 15.1. On examining the nature of the subject goods and the processes stated to be undertaken thereon, we find as follows: (1) Appellant sought classification of goods Polished / Processed limestone slabs describing the nature of activity, as (quote) rough limestone slabs which are by nature uneven in thickness ranging from 15 to 35 mm (or so) are brought to their processing unit and one of the suitable surfaces is polished with simple table polish machine. Further, it is cut to square or rectangle shape on a table cutting machine. Some other kind of simple processes like CALIBRATION, TUMBLING etc. are also undertaken . (unquote). (2) It is pertinent to note t
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tion of all the processes mentioned in the application i.e, cutting + polishing + tumbling + calibration (not necessarily in the said sequence). Further, appellant while describing goods in question as polished / processed limestone slabs , also did not specify whether the process undertaken is only polishing in certain cases and processed in other cases; or both polishing and processing are undertaken in some cases or in all cases. 15.2. In view of the above described aspects of indeterminate nature, the issue for determination is being considered22 in these appeal proceedings based on appellant s description of goods/processes, as follows: (a) Classification of polished limestone slabs i.e, where apart from cutting slabs into rectangular/square shapes, only the activity of polishing is done; and (b) Classification of processed limestone slabs i.e, where apart from cutting slabs into rectangular/square shapes, all the other specified activities viz., polishing, tumbling and calibratio
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as under: ..ln the backdrop of above meaning if one were to look at the simple processes we are performing on our low cost limestone slabs, then one will understand that POLISHING is nothing but mechanical process of GRINDING/LA VIGATING done on the surface of rough limestone slab with application of physical force by a labour through a simple polishing machine… . our job is nothing but to bring rough limestone slabs which are in crude form and perform polish & cut processes on them which are all nothing but comes under Mechanical processes. Polishing on a rough slab is nothing but grinding only . Accordingly, and in the absence of any other material to the contrary on record, it is considered that only mechanical grinding is undertaken as the method of polishing in respect of goods in question. (ii) Cutting is described as mechanical cutting of rough slabs into square/rectangular shapes; appellant s description thereof in their application (para 3.1 under Nature of activity) is
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ration tool marks on the underside. Calibration also known as strip-milling involves running the stones through a series of closely spaced saw blades to cut grooves or channels into the underside and thereafter the remaining upstand is nobbled off to leave a stone of selected thickness. Thus, tumbling, apart from polishing, is yet another/further process of smoothing and polishing, (the words on relatively small parts apparently indicating that post machine-polishing this is done on visible small parts which did not attain the required finish). Calibration is a process by which apparently, slabs of uneven/variable thickness are made to be of approximately same thickness i.e., fairly regular/even, by sawing off/cutting off the protuberant/uneven portion of the under-side surface (i.e, other than the one polished). . 16. Appellant s plea is for classification of the goods under Chapter 25 and in particular reference, under Chapter Headings 2515 / 2516 and alternatively under Headings 252
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e provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes……. . Hence, the above contention of appellant is not tenable. 18.1. On referring to the relevant Chapters and the Tariff entries, which have been reproduced earlier, it is seen that: a) The goods limestone slabs – either with description as such or with the attributes polished or processed – do not per se figure in any of the entries in / under Headings 251 5/251 6/2521 /2530 under Chapter 25 or Heading 6802. b) It is by the description of nature of goods i.e., Calcareous monumental or building stone, that limestone falls under Heading 2515, if apparent specific gravity thereof is 2.5 or more. (Meaning of Calcareous as per standard dictionaries and also in common and technical understanding25 is mostly or partly composed of calcium carbonate – in other words, containing lime or being chalky . Further
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gneiss, trachyte…) as well as calcareous monumental or building stone not falling in heading 25. 15 (including building limestone or Portland stone) and serpentine marble………). d) Appellant has not made any submission/averment as to the factor of apparent specific gravity in respect of their products for a specific claim under Heading 2515 or 251 6; but has mentioned both the said Headings in their application/appeal. As seen, in any case, there is no substantive/material difference in the factors determining classification under either of these two headings, except the said aspect of specific gravity. As such, both the said headings are considered as equally applicable in the given context, depending on the actual specific gravity thereof. e) Appellant also claimed alternative classification under Headings 2521 or 2530 with regard to their goods polished / processed limestone slabs . The former Heading, as seen, is applicable to only specified types/forms of lim
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ase, the broad dispute is whether the goods fall under Chapter 25 or under Chapter 68; and if the former is found to be correct, only headings 2515 / 251 6 would be applicable, since specifically covering limestone, as detailed above. Hence, Heading 2530 is also found to be not applicable and not relevant. 18.2. As such, the issue narrows down to classification of the subject goods either under Chapter 25 (i.e, Headings 2515 or 251 6, as detailed supra) or under Chapter 68, Heading 6802 in particular. If the goods fall under Chapter 25t the same remain excluded from Chapter 68, by virtue of Note 1 (a) of Chapter 68. It has to be therefore first examined whether the goods fall under Chapter 25. Classification under Chapter 25 is primarily governed by Note 1 to the said Chapter. The said Chapter Note specifies certain criteria for classification under Chapter 25. These can be analysed as follows: The Note starts with the phrase Except where their context (..27) otherwise requires, the he
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cluded in the Heading-description itself for e.g., calcined in Headings 2507, 2508, 2511, 2512 etc.,). 18.3. Thus, we find that in order to fall under Chapter 25, the goods/products should be: (i) those obtained by / subjected to only the specific processes mentioned / indicated in the relevant Heading-description. This is the primary or paramount criteria within Chapter 25 as per Note 1 ; or (ii) subject to the above, the goods should be in crude state; or (iii) should be in the state/form or subjected to only the processes, as specified, i.e, washed, crushed, ground, powdered etc., but (iv) should not have been subjected to other processes i.e, either those specified i.e, roasted, calcined etc., (except when the Heading description allows); or any process beyond that mentioned in the Heading. 19.1. Examining the subject goods in the light of above criteria vis-a-vis the relevant Headings 2515/2516 & Chapter Note, we find as follows: (a) Headings 2515 and 251 6, both contain simil
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calibration , which as seen, is a mechanical process of obtaining approximate uniformity in thickness of slabs. (d) Calibration, by the nature of process and objective/end-result, appears to be similar to or in the nature of trimming ( trimming by dictionary meaning – is to make something tidier or more level by cutting a small amount off it ). However, Headings 2515 & 2516 use the phrase roughly trimmed and not merely as trimmed . The two terms roughly trimmed and trimmed cannot be considered as being on same footing; moreover when the former term has been assigned with a defined meaning in the HSN. Hence, calibration would not fall under the category of roughly trimmed . As such, is not a permitted process in the Headings. (e) Process of cutting limestone slabs into square or rectangular shapes (as per surfaces), is admittedly undertaken by the appellant. The said process is specifically mentioned in the description under Headings 2515/2516; and hence is an allowed process . 19.2
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cated) i.e, washed, crushed, ground, powdered, levigated, sifted, screened, concentrated by floatation, magnetic separation or other mechanical or physical processes. As evident, the state/form of the subject goods as polished , nor the process of polishing or that of tumbling or calibration, are not among those specified or indicated in Chapter Note 1. 20.1. Appellant s contention in this regard is that their products/process of polishing , would be covered by Note I to Chapter 25, by virtue of (i) the word levigated – which, as per Oxford dictionary, has been taken from Latin word LEVIGAT, and the literal meaning of the same is made smooth, polished ; or (ii) Polishing is nothing but grinding the surface of the slab (and therefore covered by the word ground used in the Chapter Note); or (iii) the words/phrase mechanical or physical process would apply to the activity of polishing undertaken by them, as the same was undertaken without changing the structure of the product. 20.2. Above
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merits consideration, in preference over an archaic meaning/origin of the word. In common parlance also, usage of the word levigated as an equivalent / substitute for polished is not found/prevalent; i.e, in the trade, reference is made to polished slabs/stone and not as levigated slabs/stones . (iii) Further, if one considers the usage of the word levigated in the Chapter Note, the same appears with the other words crushed , ground , powdered, as the immediately preceding ones. Hence, on this analogy also applying the doctrine of noscitur a sociis30 it appears that levigated merits consideration as denoting that the goods/product is in the state/form of smooth fine powder . Or by considering that the term powdered is separately mentioned in the Note as immediately preceding word (which would cover all forms of powdered state whether coarse or fine), the only alternative meaning of levigated as per contemporary prevalence, would be to denote goods in the state/form of/or subjected to p
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of Chapter 25 only denotes the state/process of being reduced to lesser size / finer particles / powders etc; and not with the connotation of polishing or polished state of goods. There is no usage of the said word ground in the Chapter/Headings denoting the meaning of polished . C. With regard to the phrase other mechanical or physical process : (i) The phrase other mechanical or physical process appearing in Note 1 to Chapter 25, as seen, is not an independent / stand-alone phrase, but used in conjunction with the earlier words/phrases which qualifies it. For ready reference, the said Chapter Note, is again reproduced as under: 1. Except where their context or Note 4 to this Chapter otherwise requires, the headings of this Chapter cover only products which are in the crude state or which have been washed (even with chemical substances eliminating the impurities without changing the structure of the product), crushed, ground, powdered, levigated, sifted, screened, concentrated by flot
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ided in Note 1, this Chapter covers, except where the context otherwise requires, mineral products only in the crude state or washed (including washing with chemical substances to eliminate impurities provided that the structure of the product itself is not changed), crushed, ground, powdered, levigated, sifted, screened or concentrated by flotation, magnetic separation or other mechanical or physical processes (not including crystallisation). . . . . . . (conjunction highlighted). (iii) The meaning denoted with the use of the conjunction or as above, appears to be apt, as otherwise, if only the word – concentrated has to be reckoned as qualifying the subsequent words/phrases flotation, magnetic separation or other mechanical or physical processes – the same would not reflect a contextually relevant or true meaning, since processes of flotation, magnetic separation cannot be said to be used only for concentration ; more so since the earlier words in the Note include sifted / screened e
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interpretation or construction is therefore impermissible as per settled legal principles of interpretation. Hence, appellant s contention that their goods would be covered by Chapter Note I by virtue of the phrase or other mechanical or physical processes , is not based on correct appreciation of the said Note; and hence, not tenable. 20.3. From the above, it therefore emerges that the meaning / interpretation sought to be canvassed by appellant for the words levigated , ground and other mechanical or physical process appearing in Chapter Note 1, do not find sustainability or legal support, as analysed supra. 20.4. It follows from the above discussion that the processes of polishing , tumbling and calibration ; or the state of goods as polished / tumbled / calibrated are not covered by Note 1 to Chapter 25 of the Customs Tariff Act, 1 975. 21. Before arriving at a definite conclusion in this regard, we deem it fit to now also refer to the HSN Explanatory Notes pertaining to Chapter 25
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talline structures. However, other heat treatments (e.g., roasting, fusion or calcination) are not allowed, unless specifically permitted by the heading text. Thus, for example, heat treatment which could entail a change in chemical or crystalline structure is allowed for products of headings 25.13 and 25.17, because the texts of these headings explicitly refer to heat treatment. The products of this Chapter may contain an added anti-dusting agent, provided that such addition does not render the product particularly suitable for specific use rather than for general use. Minerals which have been otherwise processed (e.g., purified by recrystallisation, obtained by mixing minerals falling in the same or different headings of this Chapter, made up into articles by shaping, carving, etc.) generally fall in later Chapters (for example, Chapter 28 or 68). In certain cases, however, the headings : (1) Refer to goods which by their nature must have been subjected to a process not provided for
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ape. When products are classifiable in heading 25.17 and any other heading of this Chapter, they are to be classified in heading 25.17. The Chapter excludes precious or semi-precious stones of Chapter 71. . . . . . . . . . . . . 25.15 Marble, travertine, ecaussine and other calcareous monumental or building stone of an apparent specific gravity of 2.5 or more, and alabaster, whether or not roughly trimmed or merely cut, by sawing or otherwise, into blocks or slabs of a rectangular (including square) shape (+). – Marble and travertine : 2515.11 – Crude or roughly trimmed 2515.12 – Merely cut, by sawing or otherwise, into blocks or slabs of a rectangular (including square) shape 2515.20 – Ecaussine and other calcareous monumental or building stone; alabaster Heading Notes: Marble is a hard calcareous stone, homogeneous and fine-grained, often crystalline and either opaque or translucent. Marble is usually variously tinted by the presence of mineral oxides (coloured veined marble, onyx ma
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or roughly trimmed or merely cut, by sawing or otherwise, into blocks or slabs of a rectangular (including square) shape. In the form of granules, chippings or powder, they fall in heading 25.17. Blocks, etc., which have been further worked, i.e., bossed, dressed with the pick, bushing hammer or chisel, etc., sand-dressed, ground, polished, chamfered, etc., are classified in heading 68.02. The same classification applies to blanks of articles. The heading also excludes: (a) Serpentine or ophite (a magnesium silicate sometimes called marble) (heading 25.16), (b) Limestone (known as lithographic stone and used in the printing industry) (heading 25.30 when in the crude state). (c) Stones identifiable as mosaic cubes or as paving flagstones, even if merely shaped or processed as specified in the text of this heading (heading 68.02 or 68.01 respectively). Subheading 2515.11 For the purposes of this subheading, crude refers to blocks or slabs which have been merely split along the natural c
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superfluous protuberances by means of hammer or chisel-type tools. This subheading does not cover blocks or slabs which have been cut to a rectangular (including square) shape. Subheading 2515.12 To fall in this subheading, the blocks and slabs which have been merely cut by sawing must bear discernible traces of the sawing (by wire strand or other saws) on their surfaces. If care was taken with the sawing, these traces may be very slight In such cases, it is useful to apply a sheet of thin paper to the stone and to nib it gently and evenly with a pencil held as flat as possible. This often reveals saw marks even on carefully sawn or very granular surfaces. This subheading also covers blocks and slabs of a rectangular (including square) shape obtained otherwise than by sawing, e.g., by working with a hammer or chisel. 22.1. From the above extracts of the HSN, especially the highlighted portions, it is evident that the HSN Explanatory Notes also reflect the restriction as to only certai
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be applicable to goods other than Blocks which fall under the said heading; and thereby includes slabs . (iii) The processes / stages indicated i.e, bossed, dressed with ground, polished, chamfered etc., are not used in a cumulative connotation i.e, it is not required/necessary that all these processes have to be undertaken; any one or more of the processes if undertaken would attract application of the said explanation. The list of these mentioned processes, is also not exhaustive as seen from etc. appearing after chamfered . 22.2. In view of the above, as per HSN notes also, slabs which have been polished , tumbled and/or calibrated WOUld be covered by exclusions detailed in both General Note to Chapter 25, as well as the Heading Note to Heading 2515. 23. Based on the above detailed analysis, we find that in sum, the goods in question, limestone slabs, have admittedly been subjected to processes of polishing (including tumbling) and calibration, in addition to being cut to rectangul
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in the said case -falling under Headings 2515/2516) would not take the goods out of Chapter 25. 24.2. We have referred to the said decision. As seen, in this decision (Final Order No.s A/11380-11384/2013 -WZB/AHD dated 24-10-2013) = 2013 (11) TMI 384 – CESTAT AHMEDABAD, the Hon ble Tribunal held the classification of polished Marble slabs and polished Granite slabs under Chapter 25 by considering that in their earlier Final Order No. A/1740-1744/WZB /AHD/2012 dated 27-12-2012 = 2013 (9) TMI 648 – CESTAT AHMEDABAD, the issue was held in favour of the same assessee; and the said Final Order was accepted by the Department and hence that the ratio of the earlier order would apply. Thus, in this decision, Hon ble Tribunal has not given specific findings. We have therefore referred to the earlier Final Order dated 27-12-2012 = 2013 (9) TMI 648 – CESTAT AHMEDABAD cited therein, which is available with citation Classic Marbles vs CCE Vapi 2013 (293) ELT. 563 (Tri-Ahmd.) = 2013 (9) TMI 648 – CE
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process for converting of stone blocks into slabs or tiles, as amounting to manufacture). For the period post 1-3-2006, in view of Chapter Note 6, the activity of converting blocks into slabs with the processes of, inter-alia, polishing was held to be amounting to manufacture ; and the goods classified under Chapter 25. Thus, in view of the specific Chapter Note incorporated in the Central Excise Tariff, process of polishing came to be included in Chapter 25, which was accordingly considered by the Hon ble Tribunal. It is pertinent to note that the words or polishing in the above said Note 6 to Chapter 25, were omitted by the Finance Act, 2012. 24.4. We therefore find that the aforesaid decisions were rendered in totally different context i.e, Central Excise duty levy which is on manufacture , coupled with existence of Chapter Notes deeming polishing to be manufacture in a given period; and further the decisions therein, were based on specific facts of cases vis-d-vis certain applicab
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27.1. The next question arises as to the correctness of classification of the goods under Heading 6802, as held by the lower authority. Description against Heading 6802 in the First Schedule to Customs Tarff Act, 1975 reads as follows : Worked monumental or building stone (except slate) and articles thereof, other than goods of heading 6801; mosaic cubes and the like, of natural stone (including slate), whether or not on a backing; artificially coloured granules, chippings and powder, of natural stone (including slate) . In the above entry, the relevant part meriting consideration for the issue on hand would be whether subject goods are covered by the expression worked monumental or building stone and articles thereof ; the subsequent portion of the entry being not relevant. The phrase monumental or building stone , is the same as appearing in Headings 251 5/251 6 (with prefix calcareous and other respectively). Notes to Chapter 68 in the Tariff-Schedule, as earlier reproduced, do not
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ted by means of binders, contain fillers, be reinforced, or in the case of products such as abrasives or mica be put up on a backing or support of textile material, paper, paperboard or other materials. Most of these products and finished articles are obtained by operations (e.g., shaping, moulding), which alter the form rather than the nature of the constituent material. Some are obtained by agglomeration (e.g., articles of asphalt, or certain goods such as grinding wheels which are agglomerated by vitrification of the binding material); others may have been hardened in autoclaves (sand-lime bricks). The Chapter also includes certain goods obtained by processes involving a more radical transformation of the original raw material (e.g., fusion to produce slag wool, fused basalt, etc.). Further text Articles obtained by ……. to exclusion clause (g) Original sculptures…. , being not relevant, not reproduced. Heading description: 68.02 Worked monumental or building stone (e
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re are, however, certain exceptions where goods are covered more specifically by other headings of the Nomenclature and examples of these are given at the end of this Explanatory Note and in the General Note to the Chapter. The heading therefore covers stone which has been further processed than mere shaping into blocks, sheets or slabs by splitting, roughly cutting or squaring, or squaring by sawing (square or rectangular faces). The heading thus covers stone in the forms produced by the stone-mason, sculptor, etc., viz.: (A) Roughly sawn blanks; also non-rectangular sheets (one or more faces triangular, hexagonal, trapezoidal, circular, etc.). (B) Stone of any shape (including blocks, slabs or sheets), whether or not in the form of finished articles, which has been bossed (i.e., stone which has been given a rock faced finish by smoothing along the edges while leaving rough protuberant faces), dressed with the pick, bushing hammer, or chisel, etc., furrowed with the drag-comb, etc., p
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ured granules, chippings and powder of marble or of other natural stones (including slate) (e.g., for shop window displays), but untreated pebbles, granules, chippings and coloured natural sands fall in Chapter 25. 28.1. From the above, and especially the highlighted parts, it may be seen that the meaning/scope of the word worked is not separately and specifically delineated in the HSN Notes also. However, the said word is used at various places denoting certain illustrative and not exhaustive list of processes. From a reading of the above Notes and keeping in view those under Chapter 25, referred earlier, it can be seen that: (i) Minerals / mineral products figure in both Chapter 25 and Chapter 68. (ii) The distinction for classifying under either of the Chapters lies in the level of activities / processes undertaken on the goods. (iii) That is, to fall under Chapter 25, the goods should be either crude or subjected to only those processes/stages which are specified in the relevant He
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vi) The description in Heading 6802 itself covers stone i.e, worked monumental or building stone; apart from articles of such stone. (vii) The said stone should be subjected to processes beyond that specified in Chapter 25, which is also described as beyond the stage of normal quarry products of Chapter 25 . (viii) Any further process than mere shaping into slabs by cutting, also would render the goods to fall under Heading 6802. (ix) Amplification / illustrations to the above Note, specifies that the heading covers stone in the forms produced by stone mason, sculptor etc. ( here again, usage of word etc. , shows that the same is not exhaustive to restrict it to products made by a stone mason or sculptor only). (x) Stone of any shape, including slabs, which may or may not be in the form of finished articles but which have been, among others, polished is also covered in the heading. Herein again, the list of processes i.e., bossed, dressed with the pick, bush-hammer, chisel Polished, ch
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he relevant Chapter Notes and the HSN Explanatory Notes, as detailed supra. As such, they are rightly classifiable under Heading 6802 of the First Schedule to the Customs Tariff Act, 1975. 29. The appellant s grounds/contentions against classification of the subject goods under Chapter 68 / Heading 6802 are that Heading 6802 applies only to shaped articles and further worked by a stone-mason or sculptor, whereas the limestone slabs are simply polished & cut which does not change morphology, character, name, description, purpose and usage of the stone; hence, these processes would not take the classification out of Chapter 25. We are unable to accept this contention. As detailed above, the Heading 6802, apart from articles, also specifically covers stone in the description itself i.e. worked monumental or building stone.. and articles thereof . The same, coupled with the HSN Explanatory Notes, as detailed and analysed above, show that such stone (limestone slabs, in the instant cont
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ons put forth by the appellant have been examined, as detailed below:- (a) The appellant has made repeated references that the goods Marble and Granite – blocks/slabs- have been kept in Chapter 25. It was further urged that by the very description of the said goods, without any prefix or adjective also, these would include polished varieties and hence, the same analogy would apply to the goods limestone slabs. On examining, we find that in the Central Tax Rate Notification, the goods Marble and Granite are mentioned by description in certain entries, with the classification under Chapter 25 (Headings 2515 or 251 6, as the case may be) with reference to specific subheading / Tariff Item Number. However, the description against said sub-heading numbers, is given with a qualification/restriction as blocks or other than blocks . The same corresponds to the fact that Marble and Granite, by the said names, are specified in the Headings 2515, 251 6 respectively; and again in respect of certai
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of including blocks under either of the said Chapters, Headings would depend upon criteria for classification, as per Chapter Notes, Rules for Interpretation etc, read with HSN notes. In essence, here again it depends on the nature / level of processing undertaken; whereby if these are in crude state or subjected to specific processes (detailed in HSN also), they would be classifiable under Chapter 25 and if worked beyond that, including polishing, they would be classifiable under Chapter 68 under any of the above subheadings, as applicable. In Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017; against the Heading 6802, the description appearing in Heading 6802 of Customs Tariff has been as such incorporated (with certain specified exceptions/exclusions), pursuant to the amendment effective from 15-11-2017 (Sl.No. 177E of the Notification refers). As such, specific mention of Marble, Granite does not appear in the description against Heading 6802 in the Notification, since th
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., do not figure in the statutory criteria for determination of classification of goods, for GST-levy purposes; and as such cannot be of any relevance. (c) It has further been contended that as per rules of HSN Code , the appellant has to mention only two digits, whereas the Authority has considered 4-digit or 6-digit classification which are not relevant to them. We find that this contention of the appellant is also not in proper appreciation of the facts and statutory provisions. Classification of goods, as per the GST-Notifications, merits to be determined by considering the relevant entries, Notes in the Customs Tariff Schedules, which provide for upto 8-digit classification, at the ultimate specification levels. The mention of two-digit classification, under GST, is only a procedural relaxation given in respect of reporting in the statutory returns. The same has no bearing/relevance with regard to the primary question of determination of classification of the goods, as per the Tar
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ods viz., polished / processed limestone slabs merit to be classified under Heading 6802 of the Tariff Schedule. 31.1. In view of the foregoing, we find that the appellant has not made out a case against the decision in impugned Advance Ruling in so far as it has been ruled that Polished / Processed Limestone slabs are. correctly classifiable under heading 6802 of the GST Tariff (sic) . The classification under Chapter Heading 6802 of the First Schedule to the Customs Tariff Act, 1975 is the appropriate classification of the said goods (both polished only as well as processed , as referred at para 15.2 supra), in view of the relevant Heading-description read with the Chapter Notes and HSN Explanatory Notes; as discussed and analysed above. 31.2. In terms of sub-classification under Heading 6802, the said goods would fall under Tariff Item No. 6802 92 00 – Other calcareous stone ; considering that limestone slabs are calcareous stone , as stated earlier and keeping in view the structure
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dity comes ? The commodity comes under Chapter Heading 6802 (Tariff Item No. 6802 92 00 – Other calcareous stone ) of the Schedule. C) Can we put them under Mineral substances not elsewhere specified or included which is mentioned under HSN Code 2530? The goods Polished/ Processed Limestone slabs do not fall under HSN Code – Chapter Heading 2530 of the Schedule. D) Can we retain them under any of the I-ISN Codes 2515/2516/2521 ? The goods Polished / processed Limestone slabs do not fall under HSN Codes i.e, Chapter headings 2515 / 2516 / 2521 of the Schedule. E) Can we retain them under HSN Code 25 with inaugural phrase of Goods not mentioned elsewhere as mentioned at the start of column of 5% ? The goods would not fall under Chapter 25 of the Schedule, in view of the above discussion and findings. 33. Accordingly, we pass the following ORDER The Advance Ruling given vide TSAAR Order No. 02/2018 dated 25-03-2018 = 2018 (6) TMI 458 – AUTHORITY FOR ADVANCE RULING HYDERABAD TELANGANA pass
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ation form for Advance Ruling , which requires furnishing Statement containing applicant s interpretation of law…… . 5. Para No. (14) as given in the appeal, apparently referring to the said Sl.No. in the prescribed format Form GST ARA-02 for Appeal to the Appellate Authority for Advance Ruling . Sl.No. 14 as per format is athe facts of the case (in brief) . 6. Para No. (15) as given in the appeal, apparently referring to the said Sl.No. in the prescribed format Form GST ARA-02 for Appeal to the Appellate Authority for Advance Ruling . Sl.No. 15 as per format is Grounds of Appeal . 7. Questions framed by the appellant for Advance Ruling, and consequently this appeal pertain to only the classification under specified headings. The said questions, as framed, do not require ruling with regard to applicable rates of GST for the subject goods. Accordingly, the issue is considered w.r.t. the appropriate classification of the subject goods. Needless to state, rates of GST applicable on su
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B)(xiv) of Notification No.27/2017-Central Tax (Rate) dated 22.09.2017. 11. Inserted by (B (xv) of Notification No.27/2017-Central Tax (Rate) dated 22.09.2017. 12. Entry Sl.No.s 26A and 26B inserted by (C)(xii) of Notification No. 41/2017- Central Tax (Rate) dated 14-11-2017 with effect from 15-11-2017. 13. Inserted by C (xii) of Notification No. 34/2017- Central Tax (Rate) dated 13.10.2017 14. Entries in Col. (2) & (3) against Sl.No.177A above, were substituted vide C (xlix) of Notification No. 41/2017- Central Tax (Rate) dated 14.11.2017 w.e.f. 15-11-2017. 15. Inserted by C (1) of Notification No. 41/2017- Central Tax (Rate) dated 14.11.2017 w.e.f. 15-11-2017. 16. Phrase in {} inserted by (C)(v) of Notification No.18/2018-Central Tax (Rate) dated 26th July, 2018, effective from 27th July, 2018. 17. Sl.No. 16 omitted by (D)(i) of Notification No. 41/2017- Central Tax (Rate) dated 14-11-2017 effective from 15-11-2017. 18. Sl.No. 17 omitted by (D)(i) of Notification No. 41/2017- Cen
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of stone] by (D)(iv) of Notification No.27/2017-Central Tax (Rate) dated 22.09.2017. 21. In fact, in the application as well as grounds of appeal, in entirety, only the process of polishing has been referred/emphasised/highlighted by appellant, without any further reference to tumbling or calibration which are only mentioned in the description of nature of activity involved ). 22. This Order would not be applicable in case of any difference / deviation, in respect of the one or more of above facts/aspects, which has not been brought on record by appellant in the present proceedings, in view of provisions vide sub-Section (2) of Section 103 and sub-Section (1) of Section 104 of the Acts. 23. https://En.wikipedia.org 24. www.pavingexpert.com 25. https://en.wikipedia.org 26. HSN Explanatory Notes to Heading 25.21 refers. 27. The phrase herein reads or Note 4 to this Chapter otherwise requires which is not relevant since Note 4 deals with goods falling under Heading 2530 which is not appli
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