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2016 (5) TMI 183 - KARNATAKA HIGH COURT

2016 (5) TMI 183 - KARNATAKA HIGH COURT - [2016] 92 VST 158 (Kar) - Classification and rate of tax - Nutralite - Appellant contended that Nutralite is made by emulsification of edible oil with water and comp rises of 70% edible oil whereas Commissioner of Commercial Taxes has reached the conclusion that Nutralite would be classified as “unscheduled goods” - Held that:- in the present case the classification only contemplates edible oil and since the Nutralite was different from edible oil the co .....

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d Goods”. Therefore, the Commissioner’s reasoning and conclusion are clearly erroneous. Therefore, the “Nutralite” would fall under the Entry 31 of the Schedule III of the KVAT Act, ‘Edible Oil’ and would attract the rate of tax prescribed in respect of edible oils. - Decided in favour of appellant - WRIT PETITION NO.15894 OF 2016 (T-RES) - Dated:- 22-3-2016 - MR. ANAND BYRAREDDY, J. For The Petitioner : Shri. S.S. Naganand, Sr.Counsel for Shri. S. Manjunatha, Adv. For The Respondent : Shri.S.V. .....

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ted. According to the petitioner the said product is primarily comprised of edible oil and its use being similar to that of edible oils, the petitioner was of the understanding that the said product Nutralite is liable to be taxed as Edible Oil at the rate of 5.5% under Entry 31 of the Third Schedule to the KVAT Act, 2003. The petitioner in order to as certain the applicable VAT on the said product and to pay value added tax in accordance with law, approached the respondent No.2 by an applicatio .....

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rate of 12.5% from 0.104.2005 to 31.03.2010, at 13.5% from 01.04.2010 to 31.03.2011, at 14% from 01.04.2011 to 31.07.2012 and at 14.5% from 01.08.2012 and onwards vide its order dated 31.01.2015. The petitioner being aggrieved by the said order, approached this Court by way of writ petition in W.P. No.33227/2015. This court had summarily allowed the petition since it was found that the Officer who ha d passed the order was not the officer who had heard the matter and directed the 2nd respondent .....

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Shri S S Naganand, learned Senior Advocate would submit that the composition of Nutralite Fat Spread is indicated in the tabular form as here under: Edible Oil (Palm Oil) 70% Water 26% Skimmed Milk, Emulsifiers, water, common salt, Vitamin A Vitamin D, Vitamin E, Acidity Regulator, Starch, Sequestering Agents, Antioxidants, etc 4% It is pointed out that apparently it is primarily composed of edible oil, which is emulsified with water and to this salt, stabilizers, vitamins, etc., are added which .....

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s of usage, both the products can be used exactly in the same manner viz., for spreading, cooking, baking, etc., In the instant case, Nutralite is made by emulsification of edible oil with water and comp rises of 70% edible oil. 5. It is stated that Margarine is a generic term. Margarine or fat spread can be used as an alternative to butter or oil, as a raw material for preparing bake ry and confectionary products, etc., In fact the Supreme Court of India in Aluva Sugar Agency vs. State of Keral .....

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urposes, the constituent components of Margarine and Fat Spreads are the same and their usage is similar. Therefore, considering these observations of the Supreme Court in Aluva Sugar Agency vs. State of Kerala, the product Nutralite being a Fat Spread should also be considered as edible oil and taxed at the rate of 5.5% as enumerated under Entry 31 of the Third Schedule of the KVAT Act which reads as follows: Entry 31: Edible Oils (Non-refined and refined), but excluding coconut oil sold in sac .....

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cleared from the Excise Bond Room under Chapter 15 of the Central Exercise Act, 1985, under the heading Animal or Vegetable Fats and Their Cleavage Products; Prepared Edible Facts, Animal or Vegetable Waxes . Entry under which Nutralite is cleared falls under 1517 - Magarine Edible Mixture or Preparations of Animal or Vegetable Fats or Oils or Fractions of Different Fats or Oils of this Chapter, other than Edible Fats or Oils or Their Fractions of Heading 1516. It is in this background that the .....

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