M/S. Veeram Natural Products vs. The Commissioner Of GST And Central Excise

Held

The Court held that the issue of classification of Aluminium Foil Containers was settled by the Hon'ble Supreme Court in the case of Commissioner of Central Excise Vs. Hindalco Industries Limited (Civil Appeal No.7561 of 2009), dated 08.02.2023. The Supreme Court had affirmed the CESTAT's view that these products are classifiable under Heading 7615, applying the common parlance test, considering their use for storing food articles, and the explanatory notes to the HSN. The Court found that the Supreme Court's decision was in favor of the petitioner and against the revenue. Consequently, the Court held that Aluminium Foil Containers are classifiable under 7615, attracting a 12% GST rate. The impugned order, which confirmed the classification under 7607 with an 18% tax, was therefore liable to be quashed and was accordingly quashed. The Court noted that the petitioner had paid tax at 18% for July 2017 to November 2017 and left the issue of refund open for adjudication as per law, not deciding it on merits in these writ petitions.

Facts

The petitioner, M/s. Veeram Natural Products, a partnership firm manufacturing Aluminium Foil Containers and Plastic Articles, challenged orders passed by the Additional Commissioner of GST and Central Excise (Appeals). The dispute centered on the classification of Aluminium Foil Containers. The petitioner classified them under Chapter Heading 7615, attracting a 12% GST rate, based on their use for packing/serving food. The revenue, however, classified them under Chapter Heading 7607, which carries an 18% GST rate, defining it as Aluminium foil not exceeding 0.2 mm thickness. The petitioner argued that previous tribunal decisions and the Supreme Court of South Africa supported their classification. The appellate authority, however, deemed these precedents not binding and confirmed the original order. The petitioner sought to quash these appellate orders and direct a fresh decision following judicial discipline.

Key Issues

1. Whether the impugned order passed by the Additional Commissioner of GST and Central Excise (Appeals) is liable to be quashed for failing to follow judicial discipline and binding precedents, particularly in light of the Supreme Court's decision in Commissioner of Central Excise Vs. Hindalco Industries Limited, concerning the classification of Aluminium Foil Containers under the GST regime? (Question of law and mixed fact and law, turning on Section 7 and 9 of the GST Act, 2017 and Notification No.01/2017-Central Tax (Rate)). Petitioner's contentions: The petitioner argued that the issue of classification was settled by the Ahmedabad Tribunal in Hindalco Industries Limited Vs. CCE and subsequently by the Hon'ble Supreme Court in Commissioner of Central Excise Vs. Hindalco Industries Limited (Civil Appeal No.7561 of 2009), which held that Aluminium casseroles (similar to their product) are classifiable under Heading 7615 based on common parlance, use, and HSN explanatory notes. They contended that the appellate authority erred by not considering these binding precedents. Revenue's contentions: The revenue declined to consider the classification under 7615 based on the judgment of the Tribunals and the opinion cited by the petitioner, holding that they were not binding precedents.