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2018 (1) TMI 1195 - KERALA HIGH COURTClassification of goods - Rate of tax - bakery shortening - appellant claims that the goods falls under Entry 38 of the Third Schedule of the KVAT Act exigible to tax @ 5% - The clarification sought was in the context of the Department having the opinion that it would not fall under Entry 38, for reason of the product not being covered under the specific Harmonised System of Nomenclature (HSN) Code shown against Entry 38(18) (d): 'Others including vanaspati'. Held that: - Rule (v) of the 'Rules of Interpretation of Schedules' under the KVAT Act, applies in so far as the doctrine of ejusdem generis commends the general words to take the colour of the specific words. The word 'others' under Entry 38(18)(d) has to be understood as including all partly or wholly hydrogenated vegetable oils. But the words 'including vanaspati' cannot be taken as including any preparation of vanaspati. The inclusion of vanaspati, being by way of a specific word following the general word 'others' cannot be understood as enlarging the scope of the entry, but is one restricting the inclusion to 'vanaspati' alone which is a hydrogenated vegetable oil. Though the inclusion of vanaspati does not restrict the more general commodities included in the entry; there cannot be a further expansion or enlargement inferred. Clause (b) of item 3 of the General Rules for the Interpretation of the Schedule under the First Schedule - Import Tariff would be applicable only if the commodity 'cannot be classified by reference to (a)', which is the specific words used in that sub-clause. Clause (a) provides for classification under the heading which gives a specific description which has to be preferred, to headings providing a more general description. HSN heading 1516 provides for inter alia hydrogenated vegetable oils which are not prepared and HSN heading 1517 provides for edible mixture or preparations inter alia of vegetable oils other than edible oils and their fractions under HSN heading 1516. 'Bakery shortening' being a preparation of hydrogenated vegetable oils, it cannot be included under HSN heading 1516 nor under the category 1516.20.91; the HSN code with which is aligned Entry 38(18)(d) of the Third Schedule of the KVAT Act. The products under HSN heading 1517 having not been included in any of the entries, come under the residual entry of S.R.O. No.82/2006. Tribunal has extracted the notification published in the Gazette of India Extraordinary, Public Notice No.07 (RE-2008)/2004-09 dated 22.04.2008 of the Government of India, Ministry of Commerce and Industry, Department of Commerce, which, on a reference to the Indo-Sri Lanka Free Trade Agreement, details the items Vanaspati, Margarine and Bakery Shortening, having been included under the respective HSN Codes of 1516.20, 1517.10 and 1517.90. The order of the Clarification Authority is sustained - appeal dismissed.
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