TMI Blog2018 (5) TMI 1393X X X X Extracts X X X X X X X X Extracts X X X X ..... "8 +7.5 -15.5 Kg" - the impugned packing would satisfy the requirement of the definition of "unit container" as found in the Notification No.1-Integrated Tax (Rate) and Notification No. 2/2017- Integrated Tax (Rate) issued under the provisions of the IGST Act. In view thereof, the bags being supplied to Army by the applicant against tender qualify as product put up in "unit container". Reliance on the case laws in the case of CCE v Simba Chips [1997 (7) TMI 330 - CEGAT, MUMBAI] and Surya Agro Oils Ltd. v. Commissioner of Central Excise, Indore [1999 (11) TMI 264 - CEGAT, NEW DELHI] would not be applicable herein as the definition under consideration in these cases is not similar to the one that we are dealing with herein. Classification - Applicability of Schedule entries - For the period from 14-11-2017 onwards - Held that: - the Schedule entry no.9 does not cover frozen meat of sheep or goats when put up in unit container and bearing a brand name - the Schedule entry no.1 covers frozen meat of sheep or goats when put up in unit container and bearing a brand name - the impugned product would be covered by the schedule entry 1 of the Notification No.1-Integrated Tax (Rate) fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, unless a mention is Specification made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the GST Act . 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submission, as reproduced verbatim, could be seen thus Statement of Relevant facts having bearing on question raised l) M/S Ahmednagar District Goat Rearing and Processing Co-op Ltd. is engaged in slaughtering processing of Sheep/Goat meat and supplies these products to Army against tender. 2) Ahmednagar District Goat Rearing and Processing Supplies to Army Sheep/ goat meat in carcass form i.e. the whole animal carcass in its natural shape in frozen state. Naturally, the carcass would be in different weight sizes. Further, there is no fixed quantity size in which these carcasses are dispatched to Army. The said dispatches are made on the basis of the weight of the frozen carcass. Furthermore, the consideration is charged on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST is chargeable only when the frozen meat is put up in 'unit containers . ii. An amendment made in the schedule II of Notification No. 1/2017 dated 28th June 2017- Integrated Tax (Rate) vide Notification No. 43/2017 - Integrated Tax (Rate) dated 14th November 2017, w.e.f 15th November 2017 onwards , the following entry inserted which relates to taxability on subject products. a. Schedule I of the Notification No 43/2011-Integrated Tax (Rate) dated 14th November 2017 deals with the products which are subject to 5% GST and entry NO. I which pertain to sheep/Goat meat respectively are provided below: Schedule 1 S No Chapter Heading Sub- heading Tariff item Description of goods 1 0204 All goods (other than fresh or chilled) and put up in container and,- (a) bearing a registered brand name: or (b) bearing a brand name on which actionable claim or enforceable right in court of law is available [other than those where any claim or enforceable right in respect of such brand name has been foregone voluntarily], subject conditions as in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able person. Thus, GST is chargeable as a reference to 'value' and at applicable rates. For the purpose of building the point of view, reference made to the [GST rate schedule as noti fied by the Government as under: 2. W.e.f from 1 st July, 2017 till 14th November, 2017 Schedule II of the Notification No 1/2017-lntegrated Tax (Rate) dated 28th June 2017 deals with the products which are subject to 12 % GST and entry No 4 which pertain to sheep/Goat meat respectively are provided below: Schedule II S No Chapter Heading Sub- heading Tariff item Description of goods 4. 0204 Meat of Sheep or goats, frozen and put up in unit containers 3. A reading of the above-mentioned entry in the above reproduced notification would reveal that if the items mentioned in Tariff Heading 0204 are put up in a 'unit container' ,it would be exigible to tax @12%. 4. Correspondingly, in exercise of the powers conferred by sub-section (1) of section 6 of the Integrated Goods and Service Tax Act, 2017, the Central Government via (b) Notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which actionable claim or enforceable right in court of law is available [other than those where any claim or enforceable right in respect of such brand name has been foregone voluntarily], subject conditions as in the ANNEXURE I/ : 8. Conditions for Taxability:- A conjoint reading of the extracts of the above-mentioned notifications reveals that GST is chargeable subject to fulfillment of conditions as tabulated below. W.e.f. from 1st July, 2017 till 14th November, 2017 Must be frozen Must be packed in unit container W.e.f. from 15th November, 2017 onwards Must be frozen Must be packed in unit container Must bear a brand 9. keeping in mind all three conditions extracted from the notifications for the taxability of the products. There is clarity on two conditions i.e. Product is frozen and branded, However Advance Ruling is requested on the Question whether the product is put up in unit container or not. 10. Applicant s point of view Keeping in mind the facts, definition of unit container given as explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordinarily intended for sale were exigible for excise duty. Thus, there was a twin requirement viz. goods being put up in unit container and secondly, they should have ordinarily been intended for sale. 11.6 The expression 'unit container' was not defined in the old Central Excise Tariff but instructions in this regard were issued by Central Excise Board's letter M.F (D.R.I.) No. B/5/1/69-CX-I, dated 3-4-1969 , clarifying the meaning of the term unit container as under: Meaning of Unit Containers . The expression unit container used in Tariff item IB means a container in which prepared or preserved food is intended to be sold by the manufacturer. It may be a small container like tin, can, box, jar, bottle or bag in which product is sold by retail or it may be a large container like drum, barrel, cannister in which the product is packed for sale to other manufacturer or dealers . In short unit container means a container, whether large or small, designed to hold a pre -determined quantity or number which the manufacturer wishes to sell whether to a wholesale or retail dealer or to another manufacturer. 11.7 In this background, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.8 A perusal of the observations of the CEGAT in the above case reveals that unit container' is to be interpreted to mean a container that holds a predetermined quantity which is clearly indicated and is standardized i.e. it is standardized for a particular commodity like packages of 1kg, 100 ml, 200 ml, etc. The said conclusion also follows from the meaning of the term 'unit'. 11.9 Under the new Central Excise Tariff Act, 1985 (which replaces the old Tariff) also, certain products cleared and manufactured and put up in a 'unit container' were exigible to excise duty. The term unit container' under the New Central Excise Tariff Act, 1985 was defined to mean as under: Container whether large or small for examples, tin, can, box, jar, bottle, bag or carton, drum, barrel or canister) designed to hold u pre-determined quantity or number. 11.10 In the context of new Central Excise Tariff Act, 1 985, in the case of Agro Foods Punjab Ltd. v. Collector of Central Excise, 1990 (49) E.LT. 404 = 1990 (3) TMI 194 - CEGAT, NEW DELHI , the tribunal observed as below: We hold that there is no difference either in the entry in between 1B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nows as LDPE and HDPE cannot be said to be a sale of bulk in loose as these bags contained fixed quantity of the product for sale to the distributor/customers. Similar view was observed in the decision of the Tribunal in the case of Surya Agrooils Ltd. vs. CCE [2005 (188) E.L.T 97 (Tri.- Del.) = 2005 (5) TMI 129 - CESTAT, NEW DELHI ] which was later affirmed by the Hon'ble Supreme Court in 2006 (199) ELT A183 = 2006 (4) TMI 554 - SUPREME COURT . 11.16 Explanation appended to the IGST notification prescribing rates and notification granting exemption defines 'Unit container similar to the definition under the old and new Central Excise Tariff is provided as under: The phase unit container means a package, whether large or small (For example, tin, can, box, jar, bottle, bag, or carton, drum, barrel, or canister) designed to hold a predetermined quantity or number, which is indicated on such package. 12. In view where of the judicial principles evolved for determination of unit container would hold good in the context of GST law as well. We are therefore summarizing the said principles as under: (i) In order for a container to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se there is no fixed quantity of mutton in the LDPE bags, it can weigh 7 kg or 6.5 kg i.e. the said HDPE bags cannot be said to be holding a predetermined uniform quantity. In a nutshell, the bags in the present case do not hold a pre-determined quantity of meat, It is clear from the above factual matrix that carcasses packed in the LDPE sacks and HDPE sacks would be in different weight and sizes. Further, we are also given to understand that there is no fixed quantity and size in which these carcasses are dispatched to the Army against tender. The said dispatches are made on the basis of the actual weight of the frozen carcasses. Furthermore, the consideration is charged by Ahmednagar District Goat Rearing and Processing from the Army on the basis of the weight. Therefore, there is no doubt that the said LDPE/ HDPE bags i.e., primary as well as secondary packing do not qualify as unit container. (iii) Further, the meat in the present case is sold by the Ahmednagar District Goat Rearing and Processing on the basis of actual weight of that particular bag. That the case of CCE vs. Shalimar Super Foods supra is directly in support wherein bags containing meat which was not of pre-d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit container means a package, whether large or small (for example, tin, can, box, jar, bottle, bag, or carton, drum, barrel, or canister) designed to hold a per-determined quantity or number, which is indicated on such package, which is self- explanatory. Whether the products as mentioned in query I shall be taxable under GST as per entry no. 4 of schedule II of the Notification no. 1/2017- integrated Tax (Rate) dated 28th June 2017 upto 14th November 2017 and thereafter as per entry no. 1 of schedule I of the Notification No. 43/2017-lntegrated Tax (Rate) dated 14th November 2017 or fall under exemption list as per entry no. 10 of Notification no. 2/2017-lntegrated Tax (Rate) New Delhi dated 28th June 2017 upto 14th November 2017 and thereafter as per entry no. 9 of the Notification No. 44/2017-lntegrated Tax (Rate) dated 14 November 2017 Officer Comments :-Yes -The products as mentioned in query 1 shall be taxable under GST as per entry no. 4 of schedule II of the Notification no. 1/2017 - Integrated Tax (Rate) dated 28th June 2017 upto 14th November 201 7 thereafter as per entry no. 1 of schedule I of the Notification No. 43/2017-lntegrated Tax (Rate) dated 140' Nov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finition covers a package and the examples of such a package include a 'bag'. The aspects which now need to be seen are - Whether the bag is designed to hold a predetermined quantity or number? Whether the quantity or number is indicated on the bag? The applicant supplies the above product to the Army. We were provided with photo copies of the bags in which the product is supplied. The facts as informed are thus - The 'Acceptance of Tender' document copies as supplied by the applicant reveal thus - CONTRACT FOR SUPPLY OF MEAT DRESSED CHILLED/FROZEN AT SUKNA FOR THE PERIOD FROM 01 APR 2017 TO 31 MAR 2018 (BOTH DAYS INCLUSIVE) ON FORTNIGHTLY PAYMENT BASIS Rates tendered for delivery at Supply Point ASC Sukna as and when ordered by OC Supply Point ASC, Sukna or his authorised representative:- Item No Articles/Services to be supplied Unit Quantity in Kgs Basic price per 100 Kgs (In Rs.) Total value at basic price (In Rs.) Taxes (CST/VAT) in % Total value with tax (In Rs.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments could be seen thus - 6. Taxes and Levies Payable - As declared in BoQ at the time of submission of bid. VAT/CST Chilled Frozen - 6% Payment Terms 7. Bills Payment, The bills will be presented by your firm every fortnight which will mention the basic cost of Meat Dressed Chilled/Frozen supplied, followed by the details of all levies taxes paid by you separately. Contract Operating Officer will make 95% payment of the total billed amount including taxes through electronic transfer :- (a) 95% of Basic Cost. Contract Operating Officer will make the payment after verifying the quantity supplied. (b) 95% of Taxes and Lewes. 95% payment of the taxes and levies will only be paid by the Contract Operating Officer upon production of tax deposit receipts and certificates from Chartered Accountant of your firm and reconciliation with all connected documents. f. In the invoice raised on the Army, there is mention of the total number of bags supplied and the total weight contained in these bags on the basis of the statement in point e above. A perusal of all a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on IV defines that a Unit Container as one whether larger or small (for example tin, can, box, jar, bottle, bag or carton, drum, barrel or canister) designed to hold a (predetermined) quantity or number. Thus, the aspect of mention of the predetermined quantity or number on the package was not a requirement of the definition. The facts of the instant case before us being distinct, we wish not to deliberate on the arguments and case laws as put forth by the applicant. Question 2 Whether the products as mentioned in query 1 shall be taxable under GST as per entry no. 4 of schedule II of the notification no. 1/2017- Integrated Tax (Rate) dated 28th June 2017 upto 14th November 2017 and thereafter as per entry no. 1 of schedule I of the Notification No. 43/2017-lntegrated Tax (Rate) dated 14 th November 2017 or fall under exemption list as per entry no 10 of Notification No. 2/2017-lntegrated Tax Rate New Delhi dated 28th June 2017 upto 14th November 2017 and thereafter as per entry no. 9 of the Notification No. 44/2017- Integrated Tax (Rate) dated 14th November 2017? To answer the above question, we look at the schedule entries as have been contended to be applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meat of sheep or goats put up in unit container. 2. Schedule entry 4 of the Notification No.1-Integrated Tax (Rate) covers frozen meat of sheep or goats put up in unit container. 3. In view thereof, the impugned product would be covered by schedule entry 4 of the Notification No.l-lntegrated Tax (Rate) during the period 1-7-2017 TO 13-11-2017. FOR THE PERIOD FROM 14-11-2017 ONWARDS 1. Schedule entry no.9 of the Notification No.2-Integrated Tax (Rate) has conditions regarding unit container and brand name. The applicant has stated that there is clarity on two conditions i.e. product is frozen and branded. We have seen above that the supply by the applicant qualifies as a product put up in unit container . Now, the Schedule entry no.9 does not cover frozen meat of sheep or goats when put up in unit container and bearing a brand name. 2. Schedule entry 1 of the Notification No.1-Integrated Tax (Rate) also has conditions regarding unit unit container and brand name. The applicant has stated that there is clarity on two conditions i.e. product is frozen and branded. We have seen above that the supply by the applicant qualifies as a product put up in unit ..... 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