TMI Blog2022 (3) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Therefore, it is evident that the entry 2106.90 is a residuary entry in respect of edible preparations and hence the edible preparations shall be classified under this entry only if the same are not classifiable under any of the other specific entries for edible preparations. It is noticed that as per chapter note 1(a) to chapter 20, the chapter does not cover vegetables, fruits or nuts prepared or preserved by the processes specified in chapter 7, 8 or 11. It means that these items not being processed or preserved by the said processes shall be covered in chapter 20. The processes specified in chapter, 7, 8 or 11 are freeing, steaming, boiling, drying, provisionally preserving and milling. Chapter heading 2008 covers roasted, salted or roasted nuts and fruits such as ground nuts, cashew nuts, other seeds and nuts and these are specifically covered under said heading vide sl. No. 40 of schedule II to notification No. 1/2017-CT (rate). Hence there remains no doubt that the roasted/salted/roasted and salted ground nuts, cashew nuts and other seeds/nuts shall be appropriately classifiable under heading 2008 of customs tariff. Even otherwise also, heading 2106.90 being a resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal stands filed under Section 100(1) of the GST Act, 2017, by Sri. Mohanan, M/s. Aswani Chips Bakers having a registered office at 40/996, Melamuri Road, Big Bazar, Palakkad - 678014, bearing GSTIN 32BEFPM5445D1ZT (hereinafter also referred as the appellant). The appeal stands filed against the Advance ruling Order No: KER 115/2021 dtd.26/05/2021 pronounced by the Kerala Authority for Advance ruling. 2. At the outset, the provisions of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act) and the Kerala State Goods and Services Tax Act, 2017 (hereinafter referred to as KSGST Act) are same except for certain provisions. Accordingly, a reference hereinafter to the provisions of the CGST Act, Rules and the notifications issued there under shall include a reference to the corresponding provisions of the KSGST Act, Rules and the notifications issued there under 3. BRIEF FACTS OF THE CASE: 3.1. The appellant is engaged in business as a supplier of goods such as Jackfruit Chips, Banana Chips (salted and masala) and Sharkaraivaratty. Sale of above is not under brand name. The processes of manufacturing of the commodities were described by the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OD PREPARATIONS NOT ELSEWHERE SPECIFIED OR INCLUDED 2106 90 20 Entry Pan masala 2106 90 30 Betel nut product known as Supari Chapter 21 of Customs Tariff Act Supplementary Note No. 6 Tariff item 2106.90.99 includes sweet meat 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 ingredient HSN 2106 90 99 Entry Other 3.2. The appellant submitted that since they are supplying the Jackfruit Chips and Banana Chips (NAMKEENS) and Sharkaraivaratty (SWEETMEAT) without brand name, and tax is levied (2.5% each under CGST Act and SGST Act and 5% under IGST Act) as provided in Entry 101 A and 101 of Schedule I of Notification No. 1 of 2017 - Central Tax - (Rate). 3.3. It is further submitted that IN RE: MR. P.M. SANKARAN [KER/53/2019 Dated 21 Jun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HSN 2008 Description of sub heading Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included HSN 2008 19 40 Other roasted and fried vegetable products 3.4. The appellant claims that the words not elsewhere specified or included is material as Supplementary Note No. 6 of Chapter 21 stipulates that products now under consideration are covered by HSN 2106.90.99. Further HSN 2008 covers only those fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included . So, a product can be classified under HSN 2008 only if it is not classified under any other Chapter or subheading of Chapter 2008. Also, latter part of the description to Entry 40 of Schedule II makes it clear that it covers only Ground-nut, Cashew nut, Other roasted nuts and seeds, SQUASH of Mango, Lemon, Orange. Pineapple or other fruits. As what is sold is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F KERALA [1993] 91 STC (291)], it was held by Honourable High Court of Kerala that the products such as banana chips, tapioca chips, murukku, pakkavada, etc are fried food articles. Relevant portion of the judgement is reproduced below for easy reference: - 3.7.1. We are of the view that the approach and conclusion of the sales Tax Appellate Tribunal is erroneous in law. It is now well-settled that bakery products being a word of everyday use, must be construed in its popular sense, meaning that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it and it is to be constructed as understood in common parlance . The words bakery products should be understood in their natural, ordinary or popular sense and the meaning which they have in relation to the subject-matter with reference to which they have been used in the statute. They are well-known words of common usage. From the earliest decision of the Supreme Court in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer [1961] 12 STC 286 (SC); AIR 1961 SC 1325 the matter has been exhaustively considered by the Supreme Court in various decisions. The latest decision on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant. Applicant had submitted a list of commodities as Namkeens items. They query raised was whether the Namkeens Items Achappam, Avalose Podi, Cheeda, Diamond Cuts (Hot), Kuzhalappam, Murukku and Thatta are classifiable under HSN Code 2106 90 and is liable to GST at the rate of 12 % as per Sl. No. 46 of Schedule II of Notification No. 01/2017 Central Tax (Rate), dated 28.06.2017 of those put up in unit container and, (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available. The rate of GST is 5% as per Sl. No. 101 A of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017 for those other than put up in unit container and, (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available. In this Ruling, the issue whether the products Chakka Chips, Cheema Chakka Chips, Chembu Chips, Kappa Chips, Shakaraivaratty, Kovakkai Vattal and Pavakkai Vattal are NAMKEEN OR NOT was not raised or considered. 3.9. The term NAMKEEN is not defined under the CGST Act. So, common parlance test has to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 . So, Learned Authority for Advance Ruling ought to have classified chips made from banana (salted, masala or made from raw or ripe banana), jackfruit, tapioca, chembu, potato and kovakkai and pavakkai vattal as NAMKEENS and classified it under HSN 2106.90.99 and Entry 101 A of Scheduler I of Central Tax (Rate) Notification 1 of 2017. 4.2. Learned Authority ought to have applied the order in Pepsico India Holdings Pvt. Ltd. V/s. Commissioner Of Central Excise Service Tax, Chandigarh- I [2015 (318) E.L.T. 278 (Tri. -Del.)] wherein it was held that salted food preparations are namkeen: (paragraph 8 of the order). 4.3 Further the authority ought to have considered Para 3.1.1 of Chapter 3 of Food safety and Standards (Food Products Standards And Food Additives) Regulations, 2011, which lays down that banana chips and similar fried products such as Chiwda, Bhujia, dalmoth, Kadubale, Kharaboondi, Spiced and fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant portion of FAQ is extracted below:- What is the HS Code and GST rate on chena products, halwa. barfi (i.e. khoya product), laddu? Products like halwa, barfi (i.e. Koya product), laddus falling under HS Code 2106, are sweetmeats and attract 5% GST. 4.6. Learned Authority for Advance Ruling failed to consider that in the Advance Ruling in KER/53/2019 Dated 21/06/2019 and KER/66/2019 dated 30/09/2019 did not involve the legal and factual issues raised by this appellant. Applicants in those cases had classified their products under HSN 2008 and their application was for a confirmation of their classification. It is further submitted that the application of Rule 2 (a) of The General Rules for the Interpretation of Import Tariff by the Learned Authority for Advance Ruling in unwarranted and unsustainable as Supplementary Note 6 of Chapter 21 squarely covers chips made from banana, tapioca, Jack fruit, potato and chembu and kovakka and pavakka vattal and sharkkaraivaratty and halwa. As these products are covered by above supplementary note, it should be straight away classified with HSN 2106.90.99 and taxed under Entry 101 and 101 A of Schedule 1 of Notification No. 1/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption. Supplementary Note No. 6 of Chapter 21 of Customs Tariff Act states that HSN 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 and remain classified in these subheadings irrespective of the nature of their ingredients. So, NAMKEENS and SWEETMEATS are specifically included in HSN 2106.90.99 and hence cannot be classified under any other Chapter. 4.13. The appellant also submitted that by applying the principles of para 3.3 and 3.4 of Circular Number 113/32/2019-GST [F.NO. 354/131/2019-TRU], dated 11-10-2019 Sharkkaraivaratty and chips of banana. jackfruit, tapioca, chembu, potato, kovakkai and pavakkai vattal and similar preparations are namkeen / sweet meat. In the paragraph 3.4 of the Circular, it is stated that However, if the above dried leguminous vegetable is mixed with other ingredients (such as oil, salt etc) or sold as namkeens then the same would be classified under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant was afforded an opportunity of personal hearing via virtual media on 02/11/2021. authorized representative of the appellant CA Sheshadrinadhan appeared before the authority and reiterated the contentions raised in the appeal memorandum. They also submitted additional submission in their favour for consideration. which was also taken on record. 6. DISCUSSION FINDINGS 6.1. We have carefully gone through the facts of the case, the order issued by the Authority for Advance ruling vide order no: KER 113/2021 dated 26/05/2021, the appeal memorandum filed by the appellant and other submissions made by them during the course of personal hearing and other evidences on record. The issue to be determined is the classification and rate of tax of Jackfruit Chips, Banana Chips, Tapoica Chips, Potato Chips, Chembu Chips, Pavakka Chips and roasted / salted / roasted and salted preparations of Ground nuts, Cashew nut and other seeds supplied or proposed to be supplied by the appellant. 6.2. The contentions raised by the appellant were examined in seriatim. The first claim of the appellant is that the impugned products ought to have been classified as Namkeens or sweetmeats u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ingredient . The appellant has submitted that Supplementary Note No. 6 in Chapter 21 makes HSN 2106.90.99 a specific entry. So, chips made from banana (ripe as wen as raw), tapioca, jack fruit, potato and chembu and kovakka and pavakka vattal, ought to have been held as NAMKEENS and liable for tax under Entry No. 101 A of Central Tax Notification No. 1/ 2017 dated 27/06/2017. So, the question of including them under any other Chapter like Chapter 20 does not arise. Similarly, Sharkaraivaratty and Halwa are sweetmeats by application of common parlance test and Supplementary Note No. 6 of Chapter 21, as is evident from the words 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 . Therefore, Sharkkaraivaratty and Halwa, made with jaggery a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heading20.08, provided that the essential character of the preparations is given by Such fruit, nuts or other edible parts of plants. Therefore, it is evident that the entry 2106.90 is a residuary entry in respect of edible preparations and hence the edible preparations shall be classified under this entry only if the same are not classifiable under any of the other specific entries for edible preparations. Therefore, we need to examine if these products are not elsewhere covered or specified in the customs tariff. 6.6. The rival entries of Tariff which have been relied upon by the Advance Ruling authority are chapter 20 (which covers Preparations of vegetables, fruit, nuts or other parts of plants) and heading 2008, the relevant contents of which are reproduced below: 20.08 - Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirits, not elsewhere specified or included. - Nuts, ground-nuts and other seeds, whether or not mixed together : 2008.11 Ground-nuts 2008.19 Other, including mixtures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, fruit cooked by steaming or boiling in water and frozen remains in heading 08.11. (7) Stems, roots and other edible parts of plants (e.g., ginger, angelica, yams, sweet potatoes, hop shoots, vine leaves, palm hearts) conserved in syrup or otherwise prepared or preserved. (8) Tamaring pods in sugar syrup. (9) Fruit, nuts, fruit-peel and other edible parts of plants (other than vegetables), preserved by sugar and put up in syrup (e.g., marrons glaces or ginger), whatever the packing. (10) Fruit preserved by osmotic dehydration. The expression osmotic dehydration refers to a process whereby pieces of fruit are subjects to prolonged soaking in a concentrated sugar syrup to that much of the water and the natural sugar of the fruit is replaced by sugar from the syrup. The fruit may subsequently be air-dried to further reduce the moisture content. The products of this heading may be sweetened with synthetic sweetening agents (e.g., sorbitol) instead of sugar. Other substances (e.g., starch) may be added to the products of this heading, provided that they do not alter the essential character of fruit, nuts or other edible parts of plants. The products of this headi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... schedule II to notification No. 1/2017-CT (rate). Hence there remains no doubt that the roasted/salted/roasted and salted ground nuts, cashew nuts and other seeds/nuts shall be appropriately classifiable under heading 2008 of customs tariff. Even otherwise also, heading 2106.90 being a residuary heading shall not stand against a specific heading 2008 as per Rules of interpretation of the tariff. 6.10. Regarding other items under dispute viz. banana chips, tapioca chips, potato chips, jackfruit chips and sharkara varatty, the manufacturing process applied by the appellant in making these items is not in dispute. These chips are made by slicing, frying, adding salt or masala or jaggery syrup before packing and supply. It is not the case of the appellant that the essential characteristics of the fruits or vegetables are getting changed by applying the processes. As far as the essential nature of the products remains unchanged, the edible parts of plants are appropriately classifiable under heading 2008. In this case, the raw banana or potato or jackfruit or tapioca even after going through the process of frying and salting remain as vegetables and fruits only. The process of frying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, the contention of the appellant in this regard is baseless and is accordingly rejected. The General Rules for Interpretation of the First Schedule to the Customs Tariff Act, 1975 are as follows: Rule 1: The titles of Sections, Chapters and sub chapters are provided for case of references only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section of Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions; Rule 2: (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfurnished, provided that, as presented, the incomplete or unfurnished articles has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixture or combinations of that material or substance with other materials or s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covers Miscellaneous edible preparations, whereas chapter 20 specifically covers Preparations of vegetables, fruits, nuts or other parts of plants. Hence, when there is a specific entry providing for the most specific description in the heading 2008 to the impugned products over the residuary heading description of heading 2106.90, the said impugned goods is held appropriately classifiable under heading 2008, by virtue of rule 3(a) of the rules for interpretation. In view of clear provisions in GST laws for interpretation of tariff, the contention of the appellant regarding common parlance understanding of a goods does not hold water, as is therefore rejected. 6.14. The case laws pointed out by the appellant are not applicable in the current case due to following reasons. The Hon ble High court of Kerala in case of P Bashir vs State of Kerala 1993 91 STC 291 (Ker) had held that due to the mere fact that banana chips, murukku, achapam. pakkavada and mixture were sold or marketed by a dealer who is really a baker cannot bring these items under the entry bakery products within the meaning of those words as baking in entries 9 and 15 of the first schedule to the KGST Act 1963. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho are concerned with it and it is the sense in which they understand it that constitutes the definitive index of the legislative intention, when the statute was enacted. However, there cannot be a static parameter for the correct classification of a commodity. The process of manufacture of a product and the end use to which it is put, cannot necessarily be determinative of the classification of that product under a fiscal schedule like the Central Excise Tariff. What is more important is whether the broad description of the article fits in with the expression used in the Tariff Moreover, the functional utility and predominant or primary usage of the commodity which is being classified must be taken into account, apart from the understanding in common parlance. A commodity cannot be classified in a residuary entry, in the presence of a specific entry, even if such specific entry requires the product to be understood in the technical sense. A residuary entry can be taken refuge of only in the absence of a specific entry; that is to say, the latter will always prevail over the former. The combined factor that requires to be taken note of for the purpose of the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct GST at the rate of 12 % [6% CGST + 6% SGST]. In view of the observations as above, the following orders are issued; ORDER Q 1. Whether chips made from Jackfruit, Banana (both raw as well as ripe banana), Banana chips (masala), Potato, Tapioca, Chembu and Pavakka and sold without BRAND NAME are classifiable as NAMKEENS and are covered by HSN Code 2106.90.99 and taxable under Entry 101 A of First Schedule of Central Tax (Rate) Notification 1/2017? No. The Jackfruit Chips, Banana Chips, Potatoto Chips, Tapioca Chips, Chembu Chips and Pavakka Chips are classifiable under Customs Tariff Heading 2008.19.40 and is liable to GST at the rate of 12% [6% - CGST + 6% SGST] as per Entry at Sl. No. 40 of Schedule II of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. Q2. Whether roasted and salted /salted / roasted preparations such as of Ground nuts, Cashew nut and other seeds are NAMKEENS and when sold without a brand name can they be classified under HSN 2106.90.99 and taxed under Entry 101A of schedule I of Central Tax (Rate) Notification No. 1 of 2017? No. Roasted/ salted / roasted and salted Cashew nuts are classifiable under Customs Tariff Heading 2008. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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