TMI Blog2021 (1) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... dy to cook condition and not fried or baked whereas applicant product sold as ready to eat. Hence the applicant s claim that their product fried Fryums are known as papad is totally baseless and misleading. The applicant has relied upon the judgment of Hon ble Supreme Court in the case of Shivshakti Gold Finger [ 1996 (5) TMI 419 - SUPREME COURT ] 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. Thus, the fried Fryums are not classifiable as Papad under Tariff Item 1905 90 40. Appropriate classification of fried 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. In 5(b) above preparation for use after processing has been included and mentioned therein such as cooking, dissolving or boiling in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that applicant s product of different shape and sizes is 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. - GUJ/GAAR/R/66/2020 - - - Dated:- 17-9-2020 - SANJAY SAXENA AND MOHIT AGRAWAL MEMBER Present for the applicant : Shri Apoorva Mehta Advocate M/s. Barakatbhai Noordinbhai Velani (legal Name), M/s. Alisha Gruh Udyog (Trade Name), Plot No. 281, GIDC Wadwan, Surendranagar having a GSTIN: 24AAFFG8784L1ZT, is a proprietorship company filed an application for Advance Ruling under Section 97 of CGST Act, 2017 and Section 97 of the GGST Act, 2017 in FORM GST ARA-01 discharging the fee of ₹ 5,000/- each under the CGST Act and the SGST Act. 2. The applicant is engaged in the manufacture of Fryums. The said Fryums are prepared from maida is purchased as raw material from market which is in un-fried form. The same is first fried and various masala powders are applied and thereafter it is packed in small packets for being sold. The aforesaid fryums are sold by the applicant in different shapes and sizes such as alphabets, rings, stars etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ween fried or unfried papad. Even after frying, it still retains its original character of that of a Papad. Further, the term by whatever name called would include within its sweep all types of papad known by whatever name in the common parlance. The only category of papad excluded by Entry at S. No. 96 is when it is served for consumption means served in hotel, eating house and meant for consumption at that place itself. Reference may be made to a determination order dated 20.08.2006 in the case of M/s. Gaylord Restaurant. The order in the case of M/s. Sonal Products (supra) is also erroneous on several other counts which are discussed herein below. 7. The applicant submitted that it is legal position that a specific description shall be adopted in place of a general description. It is equally settled that resort to residual entry has to be made with extreme caution and that too only when no other provision expressly or by necessary implication applies to the goods in question. It is the case of the applicant that Fryums are papad which is exempt from payment of any tax in view of Entry at S. No. 96 of Not. No. 02/2017-CT (Rate) dated 28.06.2017. Thus, if the same are not con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) deals with issues such as execution of suit, doctrine of merger, etc. It does not lay down the proposition that a judgement in jeopardy has to be ignored by the authorities. The said judgement which is even totally distinguishable on facts could not have been thus relied upon in the case of Sonal Products (supra). 9. The applicant further submitted that the Hon ble Apex Court in the case of TTK Health Care Limited (supra) has held that Fryums are not cooked food. The said decision has no applicability to the present case as the issue herein is not as to whether the Fryums are papad or not. The Hon ble Karnataka High Court in the case of Vasavamba Stores (supra) has rightly observed that the Apex Court has nowhere stated that Fryums are not papad. 10. The Hon ble Supreme Court in the case of Shiv Shakti Gold Finger (supra), in the context of the issue as to whether Gol Papad manufactured out of Maida, Salt Starch, Papad Soda, Alum and food colour can be considered as papad or not in the context of exemption granted to papad and Badi u/s 4 (2) of the Rajasthan Sales Tax Act, 1954 has held that the Notification exempting papad would govern all the varieties of papad, wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... They reiterated the facts submitted along with the application. Findings and Discussion 15. We have considered the submissions made by the Applicant in their application for advance ruling. We also considered the issue involved, on which advance ruling is sought by the applicant, relevant facts the applicant s interpretation of law. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act. 16. As per the written submission made by the applicant, the main issue involved in the case is regarding classification of Fried Fryums of different shapes and sizes. The applicant in his submission has tried to equate fried Fryums with Papad under Tariff Item as 1905 90 40. 17. It is observed that the Explanation (iii) and (iv) of the Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 provides, as follows :- Explanation . - For the purposes of this notification, - (i) (ii) (iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to their common parlance understanding, Hon ble Supreme Court, in the case of Commissioner of Central Excise v. Connaught Plaza Restaurant (P) Ltd. [2012 (286) E.L.T. 321 (S.C.)], has referred to various decisions on the subject and observed as follows :- Common Parlance Test : 18. Time and again, the principle of common parlance as the standard for interpreting terms in the taxing statutes, albeit subject to certain exceptions, where the statutory context runs to the contrary, has been reiterated. The application of the common parlance test is an extension of the general principle of interpretation of statutes for deciphering the mind of the law maker; it is an attempt to discover the intention of the Legislature from the language used by it, keeping always in mind, that the language is at best an imperfect instrument for the expression of actual human thoughts. [(See Oswal Agro Mills Ltd. (supra)]. 19.1. It needs to be, therefore, examined whether different shapes and size of Fried Fryums would be covered by the term Papad , as understood in common parlance and as decided by higher judicial authorities. 20. The issue of proper classificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mkeen. The learned Collector s placing restriction that it is to be eaten only after frying and therefore, is not covered under the notification is a very strict way of reading a notification. The notification cannot be read in a way as to whittle down its expression or to make the notification otios. The words such as is only illustrative and not exhaustive. So long as the item satisfies the term Namkeen, the benefit of notification cannot be denied on the ground that it requires to be fried before use. There is no such understanding placed in the notification with regard to the frying of the item. Even if that be so, then the same would apply to all other items which are namkeens like Papad, Idli-mix, Dosa-mix, Jalebi-mix etc. which are required to be fried before they can be eaten. [underlining supplied] 20.1 Thus, in the aforesaid decision, the product Fry Snack Foods called Fryums have been considered as Namkeen and not as Papad . In the instant case, the applicant is manufacturing fried Fryums on which masala is applied therefore the aforesaid decision is squarely applicable in the applicant case as such in the aforesaid case the assessee was manufacturing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account each and every aspect of the product Fryums and then considered the said Product Fryums as Namkeen and not Papad . Therefore, in the applicant case the aforesaid judgement is squarely applicable as such the applicant is engaged in the manufacture of fried Fryums and same is not like papad as claimed by the applicant. 21. In the case of Commercial Tax, Indore v. T.T.K. Health Care Ltd. [2007 (211) E.L.T. 197 (S.C.)], 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de parlance also, the fried Fryums with masala cannot be said to be known as Papad . This can be understood by visualizing the photograph of both the product i.e. Papad and Fryums . PAPAD FRYUMS 22.1 From the above photos, it can be seen that PAPAD is a thing entirely different and distinct from FRYUMS. Therefore, in common parlance or in market, fried Fryums are not sold as PAPAD instead of PAPAD sold as papad and Fryums are sold as Fryums. Both the products are different and have their individual identity. Accordingly, in common parlance test, the applicant s product i.e. different shapes and sizes of fried Fryums is not Papad but is Fryums . 22.2 Further, the applicant himself has mentioned the fact in their application that they are engaged in the manufacture of fried Fryums with masala. Hence this fact indicates that applicant himself knows that in the market in common parlance their product is called Fryums and not Papad as such the fact is that in the market Papad is known as Papad and not Fryums . 23. The applicant has referred to Advance Ruling in the case of Subramani Sumathi- Order No. 07/AAR/2019 dtd. 22/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt 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 . 25.1 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. 26. The applicant has also relied upon the judgement of Hon ble High Court of Karnataka in the case of State of Karnataka Vs. Visavamba Stores and Others, wherein the issue involved was whether the Fryums can be treated as Pappad under Entry 40 of the I Schedule to the KVAT Act. 26.1 The State of Karnataka has filed Special Leave Petitions (C) No. 29023-29083/2013 in the Hon ble Supreme Court against the said judgment of Hon ble High Court of Karnataka. The Hon ble Supreme Court has granted leave to the said Special Leave Petitions. Therefore, the aforesaid judgment of the Hon ble Karnataka High Court is in jeopardy, in view of the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28. Therefore, the fried Fryums are not classifiable as Papad under Tariff Item 1905 90 40. 28.1 The next issue which arises for consideration is appropriate classification of fried Fryums . 28.2 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 -Other : --- Soft drink concentrates : 2106 90 11 ----Sharbat kg. 2106 90 19 ----Other kg. 2106 90 20 ---Pan masala kg. 2106 90 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncludes frying also, hence fried goods are also covered under chapter head 2106 which is ready 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 applicant contention that a specific description shall be adopted in place of general description is not acceptable in view of the above discussion as such the Tariff heading No.1905 is for papad and not for Fryums. Therefore, goods Fryums do not cover under any specific entry in the Tariff, therefore it is required to take resort of residual entry to decide the HSN code of fried Fryums . 29. In the instant case the most appropriate rule of interpretation which is to be used while interpreting the phrase by whatever name it is known in the heading 1905 is the legal principle of Ejusdem Generis. The application of this Rule is necessitated because of the use of a general phrase preceded by specific words. The words ejusdem generis mean of the same kind or nature . Ejusdem generis is a rule of interpretation that where a class of things is followed by general wording that is not itself expansive, the general wordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 1/2017-State Tax (Rate), dated 30-6-2017, as amended, issued under the GGST Act, 2017 or IGST Act, 2017. 32. We also refer to the following Rulings of Advance Authority, which are squarely applicable in the instant case: (i) Madhya Pradesh Advance Authority in case of M/s. Alisha Foods {Order No. 20/2019 dated 28.11.2019} has held that, Fryums, fried - Classification - Rate of GST - Applicant pleading that said goods classifiable as Papad under Tariff Item 1905 90 40 of Customs Tariff Act, 1975 - HELD : In common commercial and trade parlance, said goods are considered as Namkeen only and not as Papad - In its decision reported in 1993 (63) E.L.T. 446 (Tribunal), CESTAT had taken similar view in respect of these very goods - Apex Court judgment relied by applicant was in respect of Papad of different shapes and not in respect of Fryums 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) - Se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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