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TMI Blog2011 (8) TMI 1046X X X X Extracts X X X X X X X X Extracts X X X X ..... nt under entry 7 of the Third Schedule to the Kerala Value Added Tax Act as against 12.5 per cent assessed under entries 19 and 103 of SRO No. 82/2006 issued under section 6(1)(d) of the Kerala Value Added Tax Act. We have heard Government Pleader for the petitioner and advocate Sri Mayankutty Mather appearing for the respondent-assessee. The respondent is a manufacturer and seller of the products by name2 "fat paste cream and choco paste". The dispute raised is only with regard to rate of tax applicable to the product under the Kerala Value Added Tax Act. In order to identify the relevant entry under which tax is to be levied, we have to identify the product with reference to the ingredients used in the manufacture and the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edules. 1. Chocolate and chocolate products : 1806.90.10 2. Sugar confectionery containing cocoa : 1806.90.20 3. Spreads containing cocoa : 1806.90.30 4. Preparations containing cocoa for making beverages : 1806.90.40 5. Other : 806.90.90" After hearing both sides, we are of the view that entry 7 broadly covers all kinds of sweets, confectionery, food products and other bakery products other than those sold under brand name registered under the Trademarks Act. The Department's case is that both the items sold by the respondent are used as ingredients in the manufacture of ice-cream, toffees, etc., and since the items are not final products, they do not come under entry 7. Even though logically the argument is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try 7 of the Third Schedule. So far as choco paste is concerned, we are unable to accept the contention of the respondent that found acceptance with the Tribunal because in our view, food preparations with cocoa as an ingredient squarely falls under entry 19 of Notification SRO 82/2006. Government Pleader rightly contended that the Tribunal's finding that cocoa powder is a waste material is factually incorrect. In fact, cocoa powder is one of the products made from cocoa beans and admittedly eight per cent of the respondent's product is cocoa powder. Chocolates and other food preparations with cocoa as an ingredient are specifically covered by entry 19 of the Third Schedule. So much so, we feel entry 19 of SRO 82/2006 is an excepti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product and admittedly the respondent itself named the product "choco paste", i.e., after cocoa giving the impression that it is the predominant ingredient. Even though major ingredient by weight in confectionery is sugar, nobody calls it after sugar or calls it a sugar product. The product identification is in fact with reference to the components used, may be cocoa, orange flavour, lemon flavour, etc. We are, therefore, of the view that cocoa paste is an item falling under entry 19 of Notification SRO 82/2006 taxable at 12.5 per cent. In view of our findings above, there is no need to consider whether the items fall under residuary entry 103 of SRO 82/2006. We accordingly allow the revisions in part by modifying the orders of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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