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2021 (1) TMI 1194

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..... n has sought advance ruling on following question- "What should be the classification and GST rate on supply of Popcorn under Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 amended till date?" 3. As per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant. 4. The applicant has submitted that- (i) the applicant is desirous of obtaining registration under CGST Act for undertaking business of selling eatable items and hence covered under the definition of the term "applicant" for the purpose of presenting the application before the Advance Ruling Authority under the GST Regime (ii) The raw material ingredients for preparation of the product 'Popcorn' are: * Maize corn * Edible oil * Salt & Seasoning for flavours like salted, butter, tomato, cheese, chocolate etc. (iii) The production process is as under: * Turn on the kettle and the warmer * Mix the ingredients in appropriate quantities * Transfer the ingredients to kettle for popping * Let ingredients heat up and start popping * Maize corn conve .....

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..... ading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter alia, includes: (b) preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption; 6. Tariff item 2106 90 99 includes sweet meats commonly known as "Misthans" or "Mithai" or called by any other name. They also include products commonly known as "Namkeens","mixtures", "Bhujia", "Chabena" or called by any other name. Such products remain classified in these sub-headings irrespective of the nature of their ingredients. (v) the Heading 1904 consists of two parts: * The first part is "Prepared foods obtained by the swelling or roasting of cereals or cereal products (for example, corn flakes)". The basic requirements for the application of the first part are that the products must be: (i) prepared foods, (ii) such food must be obtained only by swelling or roasting and (iii) it should be obtained by swelling or roasting of cereals or cereal products. * The second part of the Heading appears to include precooked or otherwise prepared cereal in grain form or in the form of flakes or other worked grains which not elsewher .....

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..... ing of cereal and it will exclude the product from HSN 1904 and bring the same under Miscellaneous Edible preparations HSN 2106. (x) In Pepsi Foods Ltd. Versus Commr. of Cus. & C. Ex., Chandigarh-II 2003 (151) E.L.T. 180 (Tri. - Del.), Delhi Tribunal held that Cheetos wheels & Lehar Kurkure, classifiable under sub-heading 2108.99 of Central Excise Tariff Act, 1985 as an edible preparation. Such items, not being obtained by swelling or roasting of cereals etc., not classifiable under sub-heading 1904.10 ibid, as sought by Revenue. The Tribunal has held that these products are to be termed as Namkeen covered under the Note 10 (which is Note 6 in Current Tariff) which states that tariff item 2106 90 99 covers products commonly known as "Namkeens", "mixtures", "Bhujia", "Chabena" or called by any other name (xi) Further coming to HSN 2106, it is submitted that it is an omnibus Heading covering all kinds of edible preparations, not elsewhere specified or included. Note 5 to Chapter 21 provides an inclusive definition of this Heading and covers preparations for use either directly or after processing, for human consumption. The product 'Popcorn' to be manufactured by applican .....

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..... ut up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numeric order among those which equally merit consideration. (xvi) the HSN 1904 does not specifically cover the product 'Popcorn'. Products like Corn Flakes or Mudi which are actually covered in the description of Heading 1904 are specifically mentioned in the tariff entries of this Heading. As per Rule 3(a) the entry which provides most specific description for the product has to be preferred over general one. However as already explained, 'Popcorn' does not get covered in the description of Heading 1904. Hence it cannot be a specific description for the product. Then the product is not composite goods or mixture, hence Rule 3(b) is also not applicable. Rule 3(c) states that when goods are not classifiable as per above two sub-rules, then Heading which comes last in numeric order should be adopted. (xv .....

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..... application for advance ruling was forwarded to the Jurisdictional GST Officer to offer their comments/views/verification report on the matter. The Assistant Commissioner, CGST & Central Excise Division II, Agra vide her letter C.No 06/Misc/Tech/CGST/Div-II/Agra/17/3406 dated 04.12.2020 submitted that the item popcorn should fall under the HSN 210690. The Additional Commissioner Grade-1, Commercial Tax, Agra Zone vide his letter C.No. 1371/GST-Advance Ruling/2020-21/Ad.Com.Grade I, Va. Ka, Aa. Dated 27.11.2020 forwarded report dated 11.11.2020 of the Deputy Commissioner, Commercial Tax, Division-3, Agra, wherein it has been opined that popcorn supplied under brand name 'Yo Popcorn' will attract GST @ 18% (9% CGST & 9% SGST) under Tariff item 2106. 6. The applicant was granted a personal hearing on 14.12.2020 which was attended by Ms. Shuchi Sethi, Authorized Representative during which she reiterated the submissions made in the application of advance ruling. DISCUSSION AND FINDING 7. At the outset, we would like to make it clear that the provisions of both the CGST Act and the UPGST Act are the same except for certain provisions. Therefore, unless a mention is specifica .....

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..... namkeen under chapter 2106. The 'popcorn' has not been defined under Customs Tariff Act, 1975, the CGST Act, 2017, the UPGST Act, 2017, the IGST Act, 2017 or the Notifications issued under the CGST Act, 2017 / UPGST Act, 2017 / IGST Act, 2017. It is now well settled principle of interpretation of statue that the word not defined in the statute must be construed in its popular sense, meaning "that sense which people conversant with the subject matter with which the statue is dealing, would attribute to it". It is to be construed as understood in common language. In the case of Indo International Industries Vs. Commissioner of Sales Tax, U.P. [1981 (8) E.L.T. 325 (S.C.)], Hon'ble Supreme Court has held as follows : "4. It is well settled that in interpreting Items in statutes like the Excise Tax Acts or Sales Tax Acts, whose primary object is to raise revenue and for which purpose they classify diverse products, articles and substances resort should be had not to the scientific and technical meaning of the terms or expressions used but to their popular meaning, that is to say, the meaning attached to them by those dealing in them. If any term or expression has been defi .....

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..... 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.] 16. Further, Hon'ble Supreme Court, in the case of L.M.L. Ltd. Vs. Commissioner of Customs [Civil Appeal No. 3764 of 2003, decided on 21.09.2010 reported at [2010 (258) ELT 321 (S.C.)], has observed in para 12 of its order as follows :- [12. In Collector of Central Excise, Shillong v. Wood Crafts Products Ltd. reported in (1995) 3 SCC 454, it was held by this Court that as expressly stated in the statements of objects and reasons of the Central Excise Tariff Act, 1985, the Central Excise Tariffs are based on the Harmonious System of Nomenclature (HSN) and the internationally accepted nomenclature was taken into account to reduce disputes on account of tariff classification. Accordingly, for resolving any dispute relating to tariff classification, a safe guide is the internationally accepted nomenclature emerging from the Harmonious System of Nomenclature (HSN). Although, the decision in the case of Woodcraft Products (supra) dealt with the interpretation of the provisions of .....

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