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2018 (10) TMI 1925 - AAAR - GSTClassification of goods - Mahua De-oiled cake/ De-oiled Rice Bran, being used as an ingredient of Cattle Feed, Poultry Feed and other animal feeds - Waste generated during the Solvent Extraction process or not - availability of input credit of GST paid on purchase of Mahua Oil Cake/Rice Bran Oil cake used in the manufacture of solvent extracted oil - whether AAR was wrong in not following the precedent decisions of the higher judicial forum on the premise that the said cited decisions were of pre GST regime? - HELD THAT:- The contention of the appellant that de-oiled cake is waste, hence they cannot be treated as 'supply' fails and following the judicial principles, the above referred decisions are very much applicable to the present case and therefore the sale of de-oiled cake is undoubtedly 'supply'. Activities which are not supply are categorically outlined in the GST Act itself. Anything not covered by the exclusion will fall under the ambit of supply. Therefore, it is hard to comprehend the rationale of the appellant in not considering de-oiled cake as supply, since the definition leaves no ambiguity that anything that is sold with or without consideration, is supply. Having settled the issue of sale of de-oiled cake being supply, it can be concluded that Section 17(2) of the GST Act 2017 is very much applicable. De-oiled Rice Bran is covered by Chapter sub-heading 2302 and it has been fully exempted from CGST vide Notification No.07/2018-CT(R) dated 25.01.2018. So, in terms of Section 17(2) of CGST Act 2017, the input credit attributable to the supply of this exempted goods i.e. de-oiled rice bran has to be reversed by the appellant. It is found that these cakes have a very high saponin content which makes them unsuitable for animal or fish feed in general. Rather, these cakes are primarily used in pisciculture (fish cultivation) as weedicides (to kill and eradicate unwanted vegetation growth) and as piseicides (to eradicate predatory fishes) and as fertilizers in agriculture. Its role as fish feed, if any, is very limited as compared to its general use as fertilizer and weedicides. Accordingly, we do not agree with the contention of the appellant regarding its classification under 23099039. In fact the de-oiled mahua cake cannot fall under Chapter 23 of the tariff which comprises “Residues and waste from the food industries; prepared animal fodder”. Since it is neither a residue nor a waste nor a prepared animal fodder. Thus, there is no specific entry for this item or similar product anywhere in the tariff and therefore it should be classified under the residuary entry serial number 453 of the Notification No. 01/2017-CT(R) dated 28.06.2017 having a GST rate of 18%. Hence, the appellant is required to pay GST @18% on the supply of de-oiled mahua cake and is therefore entitled to avail input tax credit.
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