TMI Blog2021 (10) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Chapter Heading 23.02 of the CTA, 1975 does not appear correct. Chapter Heading 23.02 of the CTA, 1975 covers Bran, sharps and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants . Thus, it is evident that the Chapter Heading 23.02 covers Bran, sharps and other residues of cereals or of leguminous plants whereas the products Upma Mix Flour, RavaIdli Mix Flour, Muthiya Mix Flour and Khichu Mix Flour cannot be said to be containing bran, sharps and other residues of cereals or of leguminous plants - the products Upma Mix Flour, RavaIdli Mix Flour, Muthiya Mix Flour and Khichu Mix Flour are not classifiable under Chapter Heading 23.02 of the CTA, 1975. Chapter Heading 21.06 and specifically Tariff Item 2106 90 99 is not confined to processed or semi processed food, cooked or semi cooked food, preserved food and ready to eat food. In fact, any product which is a food preparation and which is not elsewhere specified or included in the CTA, 1975, gets covered under Chapter Heading 21.06 of the CTA, 1975. Therefore, merely because the end consumer of the Instant Mix Flour is required to fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsan/eatables is printed on the packet of product and by following the direction of recipe, farsan/eatables can be prepared instantly after adding such other ingredients as required. The process followed by the applicant (Talod) was narrated as under: (a) Talod purchases food grains and pulses from open market. (b) Such pulses are sorted and washed and then send to grinding machine. (c) Pulses are grinded into flour in grinding machine e.g. where Grams is purchased, it results into gram flour by following grinding process. In certain cases, Talod purchases grinded flour directly from the vendors. (d) Now, certain spices are mixed in flour and such mixed flour is packed in various packings. (e) Mixed Flour (commercially known as Instant Mix Flour ) are sold in open market or through distributors to consumers. (f) End consumer of such Instant Mix Flour is required to follow certain food preparation process before such product can be consumed as eatable. (g) Hence, Instant Mix Flour cannot be consumed as it is, but it is required to follow certain cooking procedures before consumption. Hence the product manufactured and sold by the applicant is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ack Pepper, Coriander, TejPatta (Clove Leaves), Sodium Bicarbonate, Citric Acid, Asafoetida, Ajma, Sounff, Chutney powder contacts, Wood Apple powder form (LimoniaAcidissima). 3. Dhokla Mix Flour Rice, Udad dal, Chana dal, Sugar, IodisedSalt, Sodium Bicarbonate, Citric Acid, Asafoetida. 4. Handwa Mix Flour Rice, Udad dal, Chana dal, Sugar, Iodised salt, Sodium Bicarbonate, Citric Acid, Turmeric, Chillies, Garam Masala (powder of Curry Leaves Bundian, Fennel Seeds, Black Pepper, TajPatta, Clove Leaves). 5. Idli Mix Flour Rice, Udad dal, IodisedSalt, Sodium Bicarbonate, Citric Acid. 6. Dosa Mix Flour Rice, Udad dal, Iodised Salt, Sodium Bicarbonate, Citric acid. 7. Dahi-wada Mix Flour Moong dal, Udad dal, IodisedSalt, Sodium Bicarbonate, Citric Acid. 8. Dalwada Mix Flour Moong dal, Udad dal, IodisedSalt, Sodium Bicarbonate, Citric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Wheat flour Sabu Dana flour Total of rice flours/wheat flours 1. Khaman Mix Flour 66% 66% 0% 66% 34% 2. Gota Mix Flour 75% 75% 0% 75% 25% 3. Dhokla Mix Flour 45% 45% 45% 45% 90% 10% 4. Handwa Mix Flour 5% 45% 50% 35% 35% 85% 15% 5. Idli Mix Flour 45% 45% 45% 45% 90% 10% 6. Dosa Mix Flour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3% Sr.No. Product Wood Apple powder Spices Total 18. Chutney Powder 90% 10% 100% 6. The applicant raised the following questions for which Advance Ruling was sought - (1) Whether on the basis of facts of the case narrated above, Mix flour mentioned above in Sr.No.1 to 17 in above table are classified under Tariff Item 1106 vide Entry No.59 of Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 and Notification No.01/2017-State Tax (Rate) dated 30.06.2017, Notification No.01/2017-Integrated Tax (Rate) dated 28.06.2017 (collectively referred to as the Rate Notifications ). (2) Whether on the basis of facts of the case narrated above, Chutney Powder mentioned above in Sr.No.18 in above table can be classified under Tariff Item 2106 vide Entry No.100A of Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 and Notification No.01/2017-State Tax (Rate) dated 30.06.2017, Notification No.01/2017-Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Tax (Rate). 7.3 As regards the products mentioned at Sl. No. 3, 5 and 6 above, the flour content of leguminous flour and rice flour is equal, therefore, the GAAR held that Rule 3(c) of General Rules for the Interpretation of CTA, 1975 is applicable according to which when goods cannot be classified by reference to Rule 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. As Rice Flour is classifiable under Heading 11.02 whereas Leguminous Flour is classifiable under Heading 11.06 and specific Tariff Item 1106 10 00, therefore these products mentioned at Sl. No. 3, 5 and 6 above have been held by the GAAR to be classifiable under Tariff Item 1106 10 00 of the CTA, 1975 attracting Goods and Services Tax @ 5% as per Sl. No. 59 of Schedule I of Notification No. 1/2017-Central Tax (Rate). 7.4 As the Upma Mix Flour and RavaIdli Mix Flour (Sl. No. 14 and 15 above) contain 70% Suji Flour (Wheat Granules), these products were found classifiable under Chapter Heading 11.03; Muthiya Mix Flour (Sl. No. 16) containing 90% Wheat Flour was found classifiable under Chapter Heading 11.01; and Khi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eas Khichu mix flour is classifiable under sub-heading 23024000 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). They appear at Entry No.103A of Schedule-I of Notification No.01/2017Central Tax (Rate) dated 28.06.2017 and the GST liability on these products is 5%(2.5% CGST + 2.5% SGST). (c) Chutney powder is classifiable under Sub-heading 21069099 of the First Schedule to the Customs Tariff Act, 1975(1 of 1975). The said product appeared at Entry No.23 of Schedule-III of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017till 14.11.2017 and at Entry No.100A of Schedule-I of the said notification with effect from 15.11.2017. The GST liability on the said product was 18%(9% CGST + 9% SGST)upto 14.11.2017 and 5%(2.5% CGST + 2.5% SGST) with effect from 15.11.2017. (d) The supply of Gota Mix and Chutney powder will be considered as a mixed supply of goods and will be considered as a supply of Gota Mix (falling under Sub-heading 11061000 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975)) on which the GST liability will be 5%(2.5% CGST + 2.5% SGST). The supply of Bhajiya Mix and Chutney powder will be considered as a mixed supply o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugar, Dry Mango Powder, Iodised Salt, Red Chili, Garam Masala, Black Pepper, Coriander, Cumin, Ajwain, Fennel, Raising Agent [(INS 500 (ii)] and Acidity Regulator (INS 300) are being used in various proportion by the applicant. Thus, after mixing products viz.various spices such as Turmeric, Salt, White / Black Pepper, Asafoetida, Coriander-Cumin Powder, Garam Masala, Curry Leaves etc. and certain preservatives like Citric Acid, Sodium Bicarbonate and Common Salt, in various flours, the characteristics of the products changes from Flour Mix to Instant Mix . It has further been submitted that the applicant himself has admitted that the aforesaid products are commercially known as Instant Mix Flour in the market and the end consumer of such Instant Mix Flour is required to carry out food preparation process prescribed on food packet such as boiling in water, frying or cooking etc. for preparation of products / Indian dishes before such products can be consumed as eatable. Thus, the aforesaid products are not to be categorized as Flour Mix but are Instant Food Mix / Mixture of various flours, spices and preservatives, which is being used for preparation of Indian dishesviz. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s by using the said Mixed Flour is also described on packet itself. In nutshell, for preparing Indian dishes, one has to carry out process prescribed on food packet. Further, significant process is required to be carried out on Mixed Flour to prepare final Indian dish. (c) As the description stated in heading 1106 suits for the said products i.e. instant mixed flour, there is no need to go under residual entry. 9.3 The applicant has referred to the CBIC Circular No. 80/54/2018-GST dated 31.12.2018 and submitted that the Circulars and Orders issued by the CBIC are binding on CBIC and its officers. In support of this contention, the applicant has relied upon the decisions in the cases of (a) Jindal Vijaynagar Steels Ltd. Vs. Commissioner of Central Excise, Mangalore [2008 (11) STR 108 (Tri. Bang.)]; (b) Union of India Vs. Arviva Industries Ltd. [2007-TMI-1095-Supreme Court of India; (c) Paper Products Ltd. Vs. Commissioner of Central Excise [(1999) 7 SCC 84]. 9.4 The applicant has also submitted that the decision in the case of CCE Vs. INARCO (supra) relied upon by the appellant department is clearly distinguishable on the basis of facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ruling given by the GAAR and other materials available on record. 11. The issue involved in this case is regarding proper classification of various products of Mix Flour / Instant Mix Flour mentioned at Sl. No. 1 to 17 above and applicable rate of Goods and Services Tax on those products. In respect of Chutney Powder (product at Sl. No. 18), the GAAR has ruled that it is classifiable under Tariff Item 2106 90 99 of the CTA, 1975 attracting Goods and Services Tax @ 5% (CGST 2.5% + SGST 2.5%), which has neither been challenged by the CGST Department nor disputed by the applicant. CLASSIFICATION OF THE PRODUCTS 12. In respect of aforesaid 17 products of Mix Flour / Instant Mix Flour, the GAAR has ruled that some of the products are classifiable under Tariff Item 1106 10 00 of the CTA, 1975 and the remaining products are classifiable under Tariff Item 2302 30 00 / 2302 40 00 of the CTA, 1975.In the appeal filed by the CGST Department, it has been contended that all these products are classifiable as Food Preparation / Instant Food Mix under Tariff Item 2106 90 99 of the CTA, 1975whereas the applicant has contended that these products are classifiable under Chapter 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is heading may be improved by the addition of very small quantities of mineral phosphates, anti-oxidants, emulsifiers, vitamins or prepared baking powders (self-raising flour) ; that Flours which have been further processed or had other substances added with a view to their use as food preparations are excluded (generally heading 19.01 ). [underlining supplied] Thus, the Flours may remain classified in Chapter Heading 11.01 or 11.02 if the flour has been improved by the addition of very small quantities of specified substances. However, if other substances (other than specified substances) are added to the flours with a view to use as food preparations , then the same gets excluded from the Chapter Heading 11.01 or 11.02. 13.3 The various products being supplied by the applicant contain Spices and other ingredients apart from flour of dried leguminous vegetables, rice and wheat, in different proportions. The Spices and other ingredients contained in these products include Sugar, Iodised Salt, Chili Powder, Garam Masala [powder of Chili, Cloves, Baciliyam, Black Pepper, Coriander, TejPatta (Clove Leaves)], Sodium Bicarbonate, Citric Acid, Asafoetida, Ajma, Sounff, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... di Belt). 3.2 Chhatua or Sattu is a mixture of flour of ground pulses and cereals. HSN code 1106 includes the flour, meal and powder made from peas, beans or lentils (dried leguminous vegetables falling under 0713). Such flour improved by the addition of very small amounts of additives continues to be classified under HSN code 1106. If unbranded, it attracts Nil GST [S. No. 78 of notification No. 2/2017-Central Tax (Rate), dated 28-6-2017] and if branded and packed it attracts 5% GST [S. No. 59 of schedule I of notification No. 1/2017-Central Taxes (Rate), dated 28-6-2017]. The CBIC has clarified in the aforesaid Circular that the flour of ground pulses and cereals, improved by the addition of very small amounts of additives continues to be classified under HSN Code 1106. However, the said clarification is not applicable in the present case as the products being supplied by the applicant contain Spices and other ingredients, which is not the case with the Chhatua or Sattu . 13.6 The applicant has also relied upon the advance ruling No. TN/55/AAR/2019 issued by the Tamilnadu Authority for Advance Ruling in the case of M/s. Mahalakshmi Store (Shri Chellasamy Nadar Deiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts as classifiable under Chapter Heading 23.02 of the CTA, 1975 on the ground of non-furnishing of details of Starch Content, Ash Content, Rate of passage through a sieve in respect of these products, does not appear proper. 14.3 Even otherwise, classifying the products Upma Mix Flour, RavaIdli Mix Flour, Muthiya Mix Flour and Khichu Mix Flour under Chapter Heading 23.02 of the CTA, 1975 does not appear correct. It has been mentioned in the Explanatory Notes of HSN for Chapter 23 that this Chapter covers the various residues and wastes derived from vegetable materials used by food-preparing industries, and also certain products of animal origin; that the main use of most of these products is as animal feeding stuffs, either alone or mixed with other materials, although some of them are fit for human consumption ; that certain products (e.g. wine lees, argol, oilcake) also have industrial uses. Obviously,the products Upma Mix Flour, RavaIdli Mix Flour, Muthiya Mix Flour and Khichu Mix Flour are not residues and wastes derived from vegetable materials used by food-preparing industries. 14.4 Chapter Heading 23.02 of the CTA, 1975 covers Bran, sharps and other residues, whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant in respect of aforementioned 17 products of Mix Flour / Instant Mix Flour and recipe of some of the products, these products are preparations consisting wholly of foodstuffs viz. flours of leguminous vegetables and cereals as well as spices and condiments, and these products are used in the making of food preparations (Khaman, Gota, Dhokla, Handwa, Idli, Dosa, Dahi Wada, Dalwada, Khichu, Upma, Gulab Jamun, RavaIdli, Medu Wada, Muthiya, Pudla, Bhajiya, Chorafali) for human consumption. Further, these products are preparations for use, either directly or after processing, such as cooking, dissolving or boiling in water, milk, etc., for human consumption. Therefore, we are of the view that all the aforementioned 17 products of Mix Flour / Instant Mix Flour are appropriately classifiable under Chapter Heading 21.06 of the CTA, 1975. As these products are not specifically mentioned under any specific Tariff Item of Chapter Heading 21.06 of the CTA, 1975, these products are classifiable under the residuary entry i.e. Tariff Item 2106 90 99 as Other . 15.4 The applicant has submitted that the Instant Mix / Ready Mix Flour is by all means not a processed food, neither cooked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Khaman Mix, Dal Wada Mix etc.) were entitled to benefit of Sl. No. 28 of Notification No. 3/2006-Central Excise. The said Sl. No. 28 of Notification No. 3/2006-Central Excise read as follows S.No. Chapter or heading or sub-heading or tariff item of the First Schedule Description of excisable goods Rate Condition No. 28 2106 Texturised Vegetable Proteins (Soya bari), and instant food mixes such as Pongal mix, Vadai mix, Pacoda mix, Payasam mix, Gulab jamun mix, RavaDosa mix, Idli mix, dosai mix, Murruku mix, and Kesari mix. 8% - Though the issue involved in that case was regarding admissibility of Sl. No. 28 of Notification No. 3/2006-Central Excise to the Instant Food Mixes (Gota Mix, Khaman Mix, Dal Wada Mix etc.), the fact that in the said Sl. No. 28, the description of goods mentioned against Chapter Heading 21.06 included Instant Food Mixes such as Pongal mix, Vadai mix, Pacoda mix, Payasam mix, Gulab Jamun mix, RavaDosa mix, Idli mix, Dosai mix, Murruku mix, and Kesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/2017-Central Tax (Rate), as amended, and are leviable to Goods and Services Tax @ 18% ad-valorem (9% CGST + 9% SGST). 17. In view of the foregoing, we allow the appeal, modify the Advance Ruling No. GUJ/GAAR/R/43/2020 dated 30.07.2020 of the GAAR to the extent it has been appealed against, and rule that - (i) The products (a) Khaman Mix Flour, (b) Gota Mix Flour, (c) Dhokla Mix Flour, (d) Handwa Mix Flour, (e) Idli Mix Flour, (f)Dosa Mix Flour, (g) Dahi Wada Mix Flour, (h) Dalwada MixFlour, (i) Khichu Mix Flour, (j) Upma Mix Flour, (k) RavaIdli Mix Flour, (l) Medu Wada Mix Flour, (m) Muthiya Mix Flour, (n) Pudla Mix Flour, (o) Moong Bhajiya Mix Flour, (p) Chorafali Mix Flour, and (q) Bhajiya Mix Flour being supplied by Shri Dipakkumar Kantilal Chotai (Talod Gruh Udyog) is classifiable under Tariff Item 2106 90 99 of the First Schedule to the Customs Tariff Act, 1975. (ii) The products (a) Khaman Mix Flour, (b) Gota Mix Flour, (c) Dhokla Mix Flour, (d) Handwa Mix Flour, (e) Idli Mix Flour, (f) Dosa Mix Flour, (g) Dahi Wada Mix Flour, (h) Dalwada Mix Flour, (i) Khichu Mix Flour, (j) Upma Mix Flour, (k) RavaIdli Mix Flour, (l) Medu Wada Mix Flour, (m) Muthiya Mix Flo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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