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2024 (2) TMI 1061 - AAAR - GSTClassification of goods - Crackle manufactured and supplied by the appellant containing the ingredients sugar, cashew nuts, butter, liquid glucose and other permitted flavours - classified under SI. No. 32AA of Schedule -III (sic) of Notification No. 1/2017-Central Tax (Rate) as Sugar Boiled Confectionery, chargeable to tax at the rate of 12% or not - whether the product "Crackle" is a sugar boiled confectionery? - HELD THAT:- As per the Appellant, the main ingredients of the product is "Sugar" @ 68% to 72%, Cashew Nuts accounts for 28% to 30% followed in a small measure, butter and Glucose. The description of the product manufactured by the Appellant and that described in the FSSAI Regulations and Indian Standard 1008:2024 support the claim of the Appellant that the product "Crackle" manufactured by them is a "Sugar Boiled Confectionery". It must be stated that this Authority is basing its findings on the submissions and literature regarding the manufacturing process of "Crackle" as provided by the Appellant. Any suppression, misrepresentation of facts would be dealt with in terms of Section 104 of the CGST / SGST Act 2017. In the case at hand, there is a specific entry for "Sugar Boiled Confectionery" under SI. No. 32AA of Schedule -II of Notification No. 01/2017-CT(Rate). Based on the literature and claim made by the Appellant in their submissions, it is seen that the product "Crackle" would fall under the category of "Sugar Boiled Confectionery". As such, the product "Crackel" would rightly be classified under Schedule-II SI. No. 32AA chargeable to a tax rate of 12%. As regards the finding of the AAR in IN RE: M/S. SRI VENKATESWARA CASHEW CHIKKY MANUFACTURERS [2023 (9) TMI 162 - AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESH] that only products generally meant for immediate consumption are to be classified under CH 1704, it is found that the same has an inherent flaw. If the said HS Explanatory provisions of immediate consumption is to be made applicable to "Crackle", then the same is equally applicable to all the products falling under Chapter Heading 1704 which are covered under Schedule -I, Schedule -II and Schedule -III as all these products are grouped under CH 1704. It cannot be said that products falling CH 1704 of Schedule -II only are hit by the said clause of immediate consumption and those falling under CH 1704 of Schedules I and III are not affected. Further, No alternative HSN was suggested by the AAR - the Committee opines that the Advance Ruling dated 26.05.2023 passed by the Authority for Advance Ruling for the State of Andhra Pradesh Is not in order. Therefore, the Committee sets aside the ruling pronounced in SRI VENKATESWARA CASHEW CHIKKY MANUFACTURERS. Thus, the product by name "Crackle" manufactured and supplied by the appellant containing the ingredients Sugar, Cashew Nuts, Butter, Liquid glucose and other permitted Flavours, should be classified under the Tariff Heading 1704 enumerated at Serial Number 32AA of Schedule -II (wrongly mentioned as Schedule-III) of Notification No. 01/2017-CT(Rate) as a Sugar Boiled Confectionery.
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