TMI Blog2021 (7) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... an Organic Manure by its texture. Since it is an organic manure having natural nutrients hence can be used for various purpose and not only as fertilizer. Therefore Gomaya Samidha is not covered under Sl.No.108 of chapter heading 3101 of Exemption Notification no.2/2017-Central Tax(Rate) dated 28.06.2017 being a branded item - The subject product i.e. Gomaya Samidha is made from cowdung herbs which are definitely not a kind of wood, hence also not exempt under si.no.113 of the aforesaid notification. Whether the Subject Goods i.e. Gomaya Samidha is leviable to GST @5% in terms of S. No. 182 of Schedule I to Notification No.1/2017 - Central Tax Rate dated 28th June, 2017? - HELD THAT:- As per description of S.No.182, it is observed that this entry covers all the goods of chapter heading no.3101 i.e. animal or vegetable fertilisers or organic fertilisers put up in unit containers and bearing a brand name - Gomaya Samidha is nothing but organic manure or natural organic fertilizer as it has all the natural nutrients for agriculture. The applicant also intends to supply it in unit containers with brand name Gomaya Samidha - Patanjali Ayurved ka utpad . Therefore, afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tax Act, 2017, within a period of 30 days from the date of service of this order. RULING 1. This is an application under Sub-Section (1) of Section 97 of the CGST/SGST Act, 2017 (herein after referred to as Act) and the rules made thereunder filed by M/s Patanjali Ayurved Ltd.. D-38, Industrial Area, Haridwar, Uttarakhand (here in after referred to as the applicant ) is registered with the GSTN having Registration No. 05AAECP4424CIZX and seeking advance ruling on the following question: Question No.1: As per the facts and circumstances as explained in Annexure-I supra, what is the correct classification (HSN Code) for Subject Goods i.e. 'Gomaya Samidha'? Question No.2: As per the facts and circumstances as explained in Annexure-I supra, whether the Subject Goods i.e. 'Gomaya Samidha' is exempt from levy of GST in terms of S. No. 108 of Notification No.2/2017 Central Tax Rate dated 28th June, 2017 or in the alternative in terms of S.No. 113 of Notification No. 2/2017 - Central Tax Rate dated 28th June, 2017? Question No.3: If the answer to Question No. 2 supra is in the negative, whether the Subject Goods i.e. 'Gomaya Samidh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... developed by the Applicant to be used in the process of performing hawan i.e. 'Yajna'. The relevant ingredients used in the manufacture of the Subject Goods are as follows: 95% cowdung; and 5% herbs (Copy of front back images of the packing of the Subject Goods along with the lab test report certifying the ingredients has also been enclosed by the applicant) b) That from the said label, ingredients and the lab test report it can be seen that the Subject Goods is nothing but 'cowdung' which is marketed to be used in the process of performing Yajna. The usage of the Subject Goods in performing Yajna shall purify the surrounding air by reducing bacteria as cowdung is considered to be anti-bacterial. c) As per S. No. 108 of the Exemption Notification No. 2/2017-Central Tax dated 28th June, 2017 all goods and organic manure falling under HSN chapter heading 3101 are exempt from levy of GST. The relevant text of the said provisions is reproduced below. GOVERNMENT OF INDIA MINISTRY OF FINANCE (Department of Revenue) Notification No.2/2017 - Central Tax Rate F.No.354/117/2017-TRU Dated 28th June, 2017 In exercise of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) a brand registered as on the 15th May2017 under the Copyright Act,1957(14 of 1957); (C) a brand registered as on the 15th May2017 under any law for the time being in force in any other country. ; (iii) Tariff item , sub-heading heading and Chapter shall mean respectively a tariff item, heading, sub-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 said Customs Tariff Act, 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. 2. This notification shall come into force with effect from the 1st day of July, 2017. d) Applicant submits that from the images of the packet enclosed with this application in which subject goods are packed it can be seen that the name Gomaya Samidha mentioned in Hindi on the packaging is not registered under the Trademarks Act, 1999 ( TM Act ) or under any previous laws relating to trademarks and thus the same cannot be considered to be a registered brand name as provided under explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer i.e. the Applicant on the packaging shall also not make the said goods as branded goods for the purpose of explanation (ii)(b) of the Exemption Notification. In this regard, reliance is also placed on the decision of the Hon'ble Supreme Court in the matter of Astra Pharmaceuticals (P) Ltd. Vs Collector of C. Ex, Chandigarh reported as 1995 (75) EL.T. 214 (S.C.) wherein it was held as follows in the context of house mark' and product mark': 6. the injections manufactured by the appellant are specified in a Pharmacopoeia .................. Therefore, it would attract levy only if its container or packing carried any distinctive marks so as to establish the relation between the medicine and the manufacturer. But the identification of a medicine should not be equated with the produce mark. Identification is compulsory under the Drug Rules. Technically, it is known as house mark'. In Narayan's Book on Trade Marks and Passing-Off, the distinction between house mark' and 'product mark' (brand name) is brought out thus, 677A. House mark and product mark (or brand name) In the pharmaceutical business a distinction is made between a house ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the name of the manufacturer and/or packer, on the packaging would not render the product as branded. Further, if mere mentioning of the name of the manufacturer on the packaging is considered as branding than there would be no product which would fall in the definition of unbranded goods and thus the said interpretation would render the Exemption Notifications redundant to the extent it provides exemption to unbranded goods. i) It is settled law that Courts should always presume that the legislature inserted every part in a statute/notification for a purpose and the legislature's intention is that every part of a statute should have effect and that a construction which results in redundancy of some part of a statute, must not be accepted. Reliance in this regard is placed on the following decisions:- 1. Bansal Wire Industries Ltd. Vs State of U.P. reported as [2011 (269) E.L.T. 145 (S.C.)] 2. Bharat Cottaga Industries Vs Union of India reported as [1992 (59) E.L.T. 30 (Bom.)] j) From the ratio of the above decisions, it can be seen that mere mentioning of the name/mark of the manufacturer on the packaging would not amount to using of brand name in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lassification at 8 digit level i.e. tariff item @0% only. m) It is submitted that it also equally settled that the end usage of any product shall not be a determinative factor in order to define the classification of goods. In this regard, reliance is Placed on the decision of the Hon'ble Supreme Court in Dunlop India Ltd. Vs union of India A Ors. reported as 1983 (13) E.L.T. 1566 (S.C.) wherein it was inter-alia held that end use is irrelevant for determining classification of goods under tariff schedule unless expressly mentioned in the schedule or definition itself. n) In the absence of any specific end usage related restriction in the Exemption Notification the Subject Goods merit classification under HSN 3101 being cowdung irrespective of the usage of the product by the consumer. o) Without prejudice to the above, even if the Subject Goods are held not to be covered under HSN 3101 as mentioned supra, the same shall still be taxable at the rate of 0% under S. No. 113 of the Exemption Notification No,2/2017 - Central Tax Rate dated 28.06.2017 being in the nature of firewood or fuel wood covered under Chapter Heading 4401 used in the performance of Yajna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g which gives the most specific description shall he preferred over a heading which gives a general description. In this regard, reliance is placed on the decision of the Hon'ble Supreme court in a Nagaraju Bros. Vs State of AP reported as 1994 95 STC 1 wherein it was held that though bag is a plastic item in common parlance, but if there is a specific entry for suitcases that entry will prevail over general entry. Thus, MSN 3101 can he said to be a general entry for all types of animal dung whereas HSN 4401 is specific to fire wood and the Subject Goods shall accordingly merit classification under HSN 4401. s) Lastly, even looking at the entire matter from the angle of scientific or technical meaning test the Subject Goods being technically defined under the Notes to Chapter should be understood in the technical sense only. In this regard, reliance is placed on the decision of the Hon'ble Supreme Court in Parle Agro (P) Ltd Vs Commr. of Commercial Taxes. Trivandrum reported as 2017 (352) E.L.T. 113 (S.C.). Relevant extract of the said decision is reproduced as below:- 37 ................................... 53. It is apparent from all these reports that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 28th June, 2017 G.S.R. (E).. In exercise of the powers conferred by sub-section (1) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby notifies the rate of the central tax of- (i) 2,5 per cent, in respect of goods specified in Schedule I, (ii) 6 per cent, in respect of goods specified in Schedule II, (iii) 9 per cent, in respect of goods specified in Schedule III, (iv) 14 percent, in respect of goods specified in Schedule IV, (v) 1.5 per cent, in respect of goods specified in Schedule V, and (vi) 0.125 per cent, in respect of goods specified in Schedule VI appended to this notification (hereinafter referred to as the said Schedules), that shall be levied on intra-State supplies of goods, the description of which is specified in the corresponding entry in column (3) of the said Schedules, falling under the tariff item, subheading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedules. Schedule I - 2.5% S.No. Chapter Heading/Subheading/Tar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;hawan samagri' and the GST rate applicable to 'hawan samagri' shall apply to Subject Goods as well. Further, merely because the Subject Goods are in the form of 'sticks' it shall not make any difference to the HSN classification as there is no restriction or description on the form of hawan samagri under the Goods Rate Notification and thus all forms of 'hawan samagri' whether in solid or powdered or slicks or any other form shall be covered under the meaning of 'hawan samagri'. further, from the open market purchase of hawan samagri by the Applicant it can be seen that hawan samagri is described as 'cowdung cake In the market and thus the trade and industry Recognizes cowdung cake as hawan samagri only. (Image of packing/label containing hawan samagri obtained from open market is enclosed herewith and marked as 'Annexure 5 ) y) Thus, as per S. No. 263A of Schedule I to the Goods Rate Notification'hawan samagri' falling under any chapter is taxable to GST @3%. Accordingly, the Subject Goods shall be taxable to GST @5% irrespective of chapter heading and HSN classification. Based on the above, the Applicant humbly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Samidha is printed at front side on the top of package and Patanjali Ayurved ka utpad is printed on the bottom of that package. As far as mention of manufacturer printed on the back side of said package is concerned that is not part of our discussion because manufacturer's name is written on the every package of any product and the same cannot be a brand name in view of case laws cited by the applicant. 7. Further, on the backside of said package following descriptions are given. I. Main ingredients present In cowdung- Nitrogen, Phosphorous, potassium, Magnesium, Calcium, Sodium etc. II. Astha Gaumaya samindha Is made from best quality ingredients aimedt o creating a divine atmosphere. 8. In the said package, it is nowhere written that it is Hawan Samagri though a picture of two saint like persons performing hawan i.e, 'yajna' is printed on the front of said package just below the wording Gomaya Samidha to give an impression that it Is used for hawan or yajna. 9. Now we will consider the questions put forth by the applicant one by one. The first question Put forth by the applicant is as per the facts and circumstances as explained in Annexure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chain of life that comprises the soil food web . Therefore, cowdung mixed with herbs being organic manure is more suitably covered under sub-heading no. 31010099 meant for 'Others' of the said chapter heading 3101. 11. Second question raised by applicant is whether Gomaya Samidha is exempt from levy of GST in terms of S. No. 108 of Notification No.2/2017 - Central Tax Rate dated 28th June, 2017 or in the alternative in terms of S.No. 113 of Notification No. 2/2017 - Central Tax Rate dated 28th June, 2017? 12. Further, as per SI. No. 108 of the Notification No. 2/2017-Central Tax(Rate)dated 28.06.2017, exemption is granted to Chapter Heading no. 3101 as per following schedule: GOVERNMENT OF INDIA MINISTRY OF FINANCE (Department of Revenue) Notification No.2/2017-Central Tax Rate F.No.354/117/2017-TRU Dated 28th June, 2017 In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because the product with this name supplied in unit container is linked with Patanjali Ayurved. If it is written only A mixture of cowdung herbs or Hawan Samagri then it cannot be a product solely developed by Patanjali Ayurved Ltd but when they have given the said product a specific name and also linked the same with their name then a connection has been created between the product and the applicant which cannot be separated. Gomaya Samidha is specially invented word for the cowdung mixture to be supplied for the purpose of Yajna as per applicant. In common parlance no one knows what the Gomaya Samidha is, but when the applicant publicizes it as Hawan Samagri only then its purpose come to the knowledge. The applicant cannot say that they will not make actionable claim against any other manufacturer who will supply that so-called Hawan Samagri in the name of Gomaya Samidha . Patanjali Ayurved ka utpad has been intentionally printed by the applicant with the product name Gomaya Samidha despite the fact that manufacturer's name is already printed on the backside of the said package. it is concluded that Gomaya Samidha is a brand name of Patanjali Ayurved ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whole of the central tax leviable thereon under section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017). SCHEDULE S.No. Chapter Heading/Subheading Tariff item Description of Goods (1) (2) (3) 113 4401 Firewood or fuel wood Chapter heading no.4401 covers only Firewood or Fuel wood . To be covered under this chapter, a product must be originated from wood. Every fuel stick that caught fire cannot be said as firewood and covered under this chapter heading. Cowdung will always remain cowdung irrespective of the fact that in what form it is supplied. Firewood or Fuel wood does not mean any product that has burning qualities. As per Wikipedia, firewood fuelwood are described as under: 1. Firewood is any wooden material that is gathered and used for fuel. Generally, firewood is not highly processed and is in some sort of recognizable log or branch form, compared to other forms of wood fuel like pellets or chips. Firewood can be seasoned (dry) or unse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r organic fertilisers put in unit containers and bearing a brand name As per above description of S.No.182, it is observed that this entry covers all the goods of chapter heading no.3101 i.e. animal or vegetable fertilisers or organic fertilisers put up in unit containers and bearing a brand name. As already discussed in the foregoing paras, Gomaya Samidha is nothing but organic manure or natural organic fertilizer as it has all the natural nutrients for agriculture. The applicant also intends to supply it in unit containers with brand name Gomaya Samidha - Patanjali Ayurved ka utpad . Therefore, aforesaid entry no. 182 is more suitable to cover the subject goods and accordingly liable to be taxed under this entry. 18. The fourth question raised by applicant is whether the Subject Goodsi.e. 'Gomaya Samidha' is leviable GST @5% in terms of S. No. 263A of Schedule I to Notification No. 1/2017-Central Tax Rate dated 28th June, 2017. 19. S. No. 263A of Schedule I to Notification No. 1/2017- Central Tax Rate dated 28th June, 2017 is stated as below: GOVERNMENT OF INDIA MINISTRY OF FINANCE (Department of Revenue) Notification No.1/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplied in the name of Hawan Samagri as is commonly known in the trade which any other manufacturer can supply. But the applicant has not described Gomaya Samidha as Hawan Samagri except that they have printed a picture of two saints like persons performing Yajna just to give the impression that it is for Hawan or Yajna purpose. Further, in common parlance, cowdung is known as organic fertilizer and not Hawan Samgri The Hon'ble Supreme court in case of Commissioner of Central Excise DelhiIll Vs ws UNI Products India Ltd reported as 2020-TIOL-91-SC-CX has held that,- 26. The main argument of the appellant is that because the car mats are made specifically for cars and are used also in cars, they should be identified as parts and accessories. But if we go by that logic, textile carpets could not have been excluded from Parts and Accessories. We have referred to such exclusion in the preceding paragraph. It has also been urged on behalf of the revenue that these items are not commonly identified as carpets but are different products. The Tribunal on detailed analysis on various entries, Rules and Notes have found they fit the description of goods under chapter heading 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e meaning of that type of goods dealt with by that type of goods in that type of market, should be searched. On a careful reading of above decisions we find that since cowdung is a waste of animal and understood as manure in trade by the dealer and consumer as well., hence supplying it in a unit container does not make it Hawan Samgri. We further find that technically cowdung is animal waste and in ordinary meaning it is known as manure in common parlance. If the applicant intends to supply cowdung as Hawan Samagri even then it does not become Hawan Samagri. For the purpose of Hawan or Yajna, public at large will definitely search for only Hawan Samagri and not cowdung. Thus in view of judgment cited above, an organic manure cannot be placed under entry no.263A of aforesaid notification and hence we can conclude that the subject product Gomaya Samidha does not fulfil the criterion of being Hawan Samagri. RULING 1. Gomaya Samidha - Patanjali Ayurved ka Utpad is a brand name of M/s Patanjali Ayurved Ltd. and it is an organic manure covered under Chapter Heading no. 3101. 2. Gomaya Samidha - Patanjali Ayurved ka Utpad is not exempt from levy of GST in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X
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