TMI Blog2021 (1) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... market, Fryums are not sold as PAPAD instead of PAPAD sold as papad and Fryums are sold as Fryums. Both products are different and have their individual identity. Accordingly, in common parlance test, the applicant s product i.e. different shapes and sizes of Papad is not Papad but is Un-fried Fryums - the Un-fried Fryums are not classifiable as Papad under Tariff Item 1905 90 40. Appropriate classification of Unfried Fryums - HELD THAT:- Heading 2106 is an omnibus heading covering all kind of edible preparations, not elsewhere specified or included. Chapter Note 5 provides an inclusive definition of this heading and covers preparations for use either directly or after processing, for human consumption. Chapter Note 6 pertaining to Tariff Item 2106 90 99 also provides inclusive definition and products mentioned therein are illustrative only - the product different shapes and sizes un-fried Fryums is appropriately classifiable under Tariff Item 2106 90 99. Sl. No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017, as amended vide Notification No. 41/2017-Central Tax (Rate), dated 14-11-2017 issued under the CGST Act, 2017 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , equipment, vehicle, aircraft, animal etc. The shape may vary, the size may vary but the ingredients, the proportion of ingredients, the composition and the recipe remains similar, if not exactly the same. 5. The applicant further submitted that they do not sell the Papad of different shapes and sizes manufactured by it in ready to eat condition. The applicant manufactures Papad of different shapes and size that are in neither fully cooked form nor ready to eat form till reaches the actual consumer. When the consumer desires to consume/ eat, the consumer needs to either fry it or bake it before consumption and upon frying/baking the Papad of different shapes and size sold by the applicant becomes consumable. In other words, the Papad of different shape and size are not ready and suitable for human consumption till they are fried/baked as deemed fit and as and when deemed fit by the consumer. 6. Accordingly the Applicant seeks Advance Ruling on the following questions : (i) Under which tariff Heading PAPAD of different shapes and sizes manufactured/ supplied by the applicant would attract CGST and SGST? Applicant s interpretation of law : 7. The applicant su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Courts including Hon ble Supreme Court have resorted to encouragement of development of principles of interpretation according to the changing scenario. In the case of State of Punjab Vs. Amritsar Beverages Ltd. [2006] 147 STC 657 (SC) = 2006 (8) TMI 308 - SUPREME COURT , Honourable Supreme Court was confronted with the issue of interpretation of a couple of provisions of the Indian Evidence Act and while interpreting the provisions vis- -vis taking cognizance of technological development, Honourable Supreme Court observed that Creative interpretation had been resorted to by the court so as to achieve a balance between the age old and rigid laws on the one hand and the advanced technology, on the other. The judiciary always responds to the need of the changing scenario in regard to development of technologies. It uses its own interpretative principles to achieve a balance when Parliament has not responded to the need to amend the statute having regard to the developments in the field of science. In the case of M/s. J. K. Cotton Spinning and Weaving Mills Ltd. Vs. Union of India [1988] 68 STC 421 (SC) = 1987 (10) TMI 51 - SUPREME COURT , relying upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MI 926 - AUTHORITY FOR ADVANCE RULING, TAMILNADU wherein the issue of classification of PAPAD made of maida was for consideration before Advance Ruling Authority and it has been held therein that the product in question was eligible to be classified as PAPAD under Tariff Heading 19050540. 16. The applicant submitted that issue as to whether PAPAD of different shapes and sizes and also known by different nomenclature, whereby more common nomenclature used is FRYUMS though FRYUMS is a registered brand name of TTK Healthcare Ltd. and not the name of any of product of PAPAD, would be eligible to be considered as and falling under the entry of PAPAD or not has been very well settled far back by Honourable Supreme Court in the case of Shiv Shakti Gold Finger Vs. Assisstant Commissioner, Commercial Tax, Jaipur (1996) 9 SCC 514 = 1996 (5) TMI 419 - SUPREME COURT wherein Honourable Supreme Court has clearly observed and held that irrespective of the shape of PAPAD and irrespective of ingredients used, the PAPAD still remains PAPAD. 17. The applicant has referred the various case laws of VAT era which are summarised as under : (i) In the case of State of Karnataka Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s neither granted any stay on operation and execution of the decision of Honourable Karnataka High Court and as per settled legal position, till a judgment is stayed or reversed, it is the authority prevailing and the judicial discipline demands that the said judgment be honoured and followed. The applicant has rely upon the observation made by Honourable Supreme Court in the case of Collector of Customs, Bombay Vs. Krishna Sales (P) Ltd. AIR 1994 SC 1239 = 1993 (9) TMI 124 - SUPREME COURT observing that Mere filing of appeal does not operate as a stay or suspension of the order appealed against. (vi) On the issue of classification and the principles of classification, it would be profitable to refer to the decision of Honourable Supreme Court in the case of Commissioner of Commercial Tax, UP Vs. A. R. Thermosets (P) Ltd. AIR 2016 SC 321 : (2016) 94 VST 258 (SC) = 2016 (9) TMI 410 - SUPREME COURT wherein, issue was as to whether BITUMEN EMULSION was eligible to be classified under the entry which read as BITUMEN. The stand of the Revenue was that the concerned entry was restrictive as it used the only word BITUMEN while the stand of the assessee was that B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 141 of the Constitution. The judicial system only works if someone is allowed to have the last word and the last word so spoken is accepted and religiously followed. The doctrine of stare decisis promotes a certainty and consistency in judicial decisions and this helps in the development of the law. Besides providing guidelines for individuals as to what would be the consequences if he chooses the legal action, the doctrine promotes confidence of the people in the system of the judicial administration. Even otherwise it is an imperative necessity to avoid uncertainty, confusion. Judicial propriety and decorum demand that the law laid down by the highest Court of the land must be given effect to. Union of India (UOI) and Ors. vs. S.P. Sharma and Ors. (2014) 6 SCC 351: MANU/SC/0191/2014 = 2014 (3) TMI 1165 - SUPREME COURT . 18. The applicant further submitted that assessee is the person who deals with the product day in day out and who is more conversant with the market. The disturbance in the classification may lead to an anomalous situation for the assessee having business throughout the country. Considering the settled laws on the issue of classification it needs to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovides, as follows :- Explanation . - For the purposes of this notification, - (i) (ii) (iii) Tariff item , sub-heading heading and Chapter shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. 24. What is Papad has not been defined or clarified under Customs Tariff Act, 1975, the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act, 2017), the Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as the GGST Act, 2017 ), Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the IGST Act, 2017 or the Notifications issued under the CGST Act, 2017/GGST Act, 2017/IGST Act, 2017. 24.1 It is now well settled principle of interpretation of statute that the word not defined in the statute must be construed in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, examined whether different shapes and size of Un-fried Fryums would be covered by the term Papad , as understood in common parlance and as decided by higher judicial authorities. 25.1 The issue of proper classification of the product Fry Snack Foods called Fryums and admissibility of exemption notification under Central Excise regime was examined by the Hon ble Customs, Excise and Gold Appellate Tribunal (CEGAT, as it was known then) in the case of T.T.K. Pharma Ltd. v. Collector of Central Excise [1993 (63) E.L.T. 446 (Tribunal)] = 1992 (8) TMI 183 - CEGAT, NEW DELHI . In this case, the Hon ble Tribunal, inter alia, observed as follows:- 6. A reading of these sub-headings makes it clear that the product is not a Prasad or Prasadam, Sterilised or pasteurised miltone. Therefore, it will not come within the sub-headings 2107.10 or 2107.20. As the item is not put in a unit container and ordinarily intended for sale, it will not come within the Heading 2107.91. Therefore, the product has to be brought under the residuary sub-heading 2107.99 as Other carrying nil rate of duty. As we have classified the product under the residuary product under the heading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered as Namkeen and not as Papad . 26.1 In the case of Commercial Tax, Indore v. T.T.K. Health Care Ltd. [2007 (211) E.L.T. 197 (S.C.)] = 2007 (4) TMI 354 - SUPREME COURT , the issue before the Hon ble Supreme Court was regarding tax rate of Fryums under M.P. General Sales Tax Act, 1958/M.P. Commercial Tax Act, 1994. In this case, Hon ble Apex Court observed as follows: - 12. In the present case we have quoted the definition of the term cooked food . It is an inclusive definition. It includes sweets, batasha, mishri, shrikhand, rabari, doodhpak, tea and coffee but excludes ice-cream, kulfi, ice-candy, cakes, pastries, biscuits, chocolates, toffees, lozenges and mawa. That the item cooked food is inclusive definition which indicates by illustration what the legislatures intended to mean when it has used the term cooked food . Reading of the above inclusive part of the definition shows that only consumables are sought to be included in the term cooked food . In the case of fryums there is no dispute that the dough/base is a semi-food. There is also no doubt that in the case of fryums a further cooking process was required. It is not in dispute that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different and have their individual identity. Accordingly, in common parlance test, the applicant s product i.e. different shapes and sizes of Papad is not Papad but is Un-fried Fryums . 28.1 The applicant has relied upon the judgment of Hon ble Supreme Court in the case of Shivshakti Gold Finger wherein the Hon ble Supreme Court examined the matter under Rajasthan Sales Tax Act, whether Gol Papad manufactured out of Maida, Salt and Starch are Papad or not. It was held that size or shape is irrelevant and that Papad of all shapes and sizes are covered under the entry Papad . 28.2 However, in the case of Shivshakti Gold Finger, Hon ble Supreme Court has not examined the issue of Un-fried Fryums . Therefore, the said case is not found to be applicable in the facts of the present case. 29.1 The applicant has also relied upon the judgement of Hon ble High Court of Karnataka in the case of State of Karnataka v. Visavamba Stores and Others = 2012 (10) TMI 977 - KARNATAKA HIGH COURT , wherein the issue involved was whether the Fryums can be treated as Pappad under Entry 40 of the I Schedule to the KVAT Act. 29.2 The State of Karnataka has filed Special Leave Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) Commissioner of Commercial Tax, UP Vs. A. R. Thermosets (P) Ltd. AIR 2016 SC 321: (2016) 94 VST 258 (SC) = 2016 (9) TMI 410 - SUPREME COURT . In this case, Hon ble Supreme Court of India has decided the issue of classification of BITUMEN EMULSION, whereas in the instant case, issue pertains to determination of classification of un-Fried Fryums. Therefore, this case law is not applicable in the instance case. 31. Therefore, the Un-fried Fryums are not classifiable as Papad under Tariff Item 1905 90 40. 31.1 The next issue which arises for consideration is appropriate classification of Unfried Fryums . 31.2 Chapter Heading 2106 of the First Schedule to the Customs Tariff Act, 1975 is, as follows :- HS Code Description of goods Unit (1) (2) (3) 2106 Food preparations not elsewhere specified or included 2106 10 00 - Protein concentrates and textured protein substances kg. 2106 90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... included. Chapter Note 5 provides an inclusive definition of this heading and covers preparations for use either directly or after processing, for human consumption. Chapter Note 6 pertaining to Tariff Item 2106 90 99 also provides inclusive definition and products mentioned therein are illustrative only. 31.5 Taking all these aspects into consideration, we hold that the product different shapes and sizes un-fried Fryums is appropriately classifiable under Tariff Item 2106 90 99. 32. Sl. No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017, as amended vide Notification No. 41/2017-Central Tax (Rate), dated 14-11-2017 issued under the CGST Act, 2017 and corresponding Notification No. 1/2017-State Tax (Rate), dated 30-6-2017, as amended, issued under the GGST Act, 2017 covers Food preparations not elsewhere specified or included [other than roasted gram, sweetmeats, batters including idli/dosa batter, namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, khakhra, chutney powder, diabetic foods] falling under Heading 2106. Therefore, Goods and Services Tax rate of 18% (CGST 9% + GGST 9% or IGST 18%) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ryums and hence not applicable - Since Heading 2106 ibid covers all kind of edible preparations not elsewhere specified and items and processes specifically mentioned therein are only illustrative, Fried Fryums are appropriately classifiable under Tariff Item 2106 90 99 ibid - Said goods chargeable to GST @ 18% (9% CGST + 9% SGST) - Section 9 of Central Goods and Services Tax Act, 2017 The above Rulings of Advance Authority are squarely applicable in the applicant case. In view of the said Rulings, it can be concluded that applicant s product of different shape and sizes is un-fried Fryums and it cannot be called as Papad as claimed in the application and therefore merits classifiable under Tariff Heading 21069099 of the Custom Tariff Act, 1975. 34. In view of the foregoing, we rule as under :- RULING Q. Under which tariff Heading PAPAD of different shapes and sizes manufactured/ supplied by the applicant would attract CGST and SGST? Ans . The product Un-fried Fryums manufactured and supplied by applicant is classifiable under Tariff Item 2106 90 99 of the First Schedule to the Customs Tariff Act, 1975. Goods and Services Tax rate of 18% (CGST 9% + GGS ..... X X X X Extracts X X X X X X X X Extracts X X X X
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