TMI Blog2022 (3) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... eparations 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. 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 and salted 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 he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also appropriately classifiable under. heading 2008 along with specifically covered goods viz. Roasted and salted nuts under examination (which is covered by Rule 3(a) of the said rules for interpretation). Further, chapter 21 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. The Jackfruit Chips are classifiable under Customs Tariff Heading 2008.19.40 and is liable to GST at the rate of 12% as per Entry at Sl No. 40 of Schedule II of Notification No. 01 /2017 Central Tax (Rate) dated 28.06.2017 - the classification of Jackfruit Chips by my supplier under HSN code 1903 is not correct - Roasted / salted / roasted and salted Cashew nuts are classifiable under Customs Tariff Heading 2008.19.10 and roasted / salted / roasted and salted Ground nuts and other nuts are clas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant submitted that they also intend to deal in Banana chips. They are made by slicing banana to thin round pieces and fried in edible oil. Salt and turmeric powder are also applied. In case of masala chips, appropriate type of masala is added. Sharkaraivaratty is made by frying, in edible oil, thick pieces of banana slices. Thereafter, they are mixed thoroughly in dense syrup of jaggery and thereafter in powder of dried ginger (chukku) and cardamom. The appellant claims that as banana chips (salted and masala), jack fruit chips, and Sharkaraivaratty are edible preparations, they are under the impression that the first two are savory and sharkaraivaratty is a sweetmeat. Hence, they are CGST / SGST/ IGST by classifying the commodities under Entry 101 A and 101 of Schedule I of Central Tax (Rate) Notification No. 1 of 2017. HSN 2106 of Custom Tariff Act and Entry 101 and 101 A of Notification No. 1 of 2017 are reproduced below for convenient reference of this Honourable Appellate Authority:- Entry 101 Sch. 1 of Notification 1 of 2017 HSN 2106.90 Sweatmeats Entry 101 A / Sch. 1 of Notification 1 of 2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .M. SANKARAN [KER/53/2019 Dated 21 June 2019], ruled that Baked Chips come under HSN 2008 19 40 and taxable at 12% vide Entry 40 of 2nd Schedule. [Notification No. 1/2017/CT(Rate) dtd. 28-06-2017 SRO. No. 360/2017]. From the Ruling, it appears that the applicant himself had conceded that banana chips supplied by him were baked chips . The Ruling is on the basis of ingredients and classification reported by the applicant and not on an analysis of the products. Relevant enteries of the impugned goods are reproduced below for easy reference:- Entry 40/ Sch. 2 of Notification 1 of 2017 HSN 2008 Fruits, nuts and other edible parts of plants, otherwise prepared of preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included; such as Groundnuts, Cashew nut roasted and salted or roasted and salted, Other roasted nuts and seeds, squash of Mango, Lemon, Orange, Pineapple or other fruits. Chapter 20 Chapter Heading Preparations of vegetables, fruits, nuts or other parts of plants. Chapter 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h or after mixing with masala. In case of tapioca, it is also fried by slicing to thin pieces of about l in length. 3.7. Roasted / Roasted and salted / salted preparations made out of Ground-nuts, Cashew nut and other seeds are commonly understood as NAMKEENS. Also, salted chips and masala chips of Tapioca and Potato are also commonly understood as NAMKEENS. They have to be classified as NAMKEENS in view of Supplementary Note No. 6 of Chapter 21 of Customs Tariff Act. In this context, Circular Number 113/32/2019-GST [F.NO. 354/131/2019-TRU], DATED 11-10-2019 is relevant. Paragraph 3.4 of the circular states 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 Sub heading 2106 90 as namkeens, bhujia, chabena and similar edible preparations and attract applicable GST rate. 3.8. Note No. 1 of Chapter 20 states that the chapter does not cover vegetables, fruit or nuts, prepared or preserved by the processes specified in Chapter 7, 8 or 11. I understand that Banana and Jackfruit are classified under Chapter 8 of Customs Tariff Act, with HSN Code 0803 and 0810.90. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , gulab jamun and fried food articles such as banana chips, tapioca chips, murukku, pakkavada, etc., it will only show that making of such goods is their individual choice or preference or taste. It is also a matter of common knowledge that modern marketing has many dimensions. For convenience of the customers, certain bakeries may sell pickles, pappadom or even stationery articles. They are goods made or sold out of individual choice or taste probably to cater to their particular customers as part of their business method or marketing method. But, these isolated or individual choices or taste for marketing particular goods will not and cannot render such goods as one covered by the words bakery products . 3.9.2. We are of the view that the Appellate Tribunal was in error in holding that the words bakery products will take within its fold anything dealt with or marketed or connected with the bakery. In order to say that particular goods are covered by the said word, those goods should be understood in their natural, ordinary or common parlance as bakery goods. So viewed, we are of the opinion that the mere fact that banana chips, tapioca chips, murukku, achappam, pakkavada an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dish. Origin From Urdu namkin salty or savoury food , from Persian. 3.12. CESTAT, New Delhi has observed in paragraph 8 of its order reported as PEPSICO INDIA HOLDINGS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, CHANDIGARH-I, [2015 (318) E.L.T. 278 (Tri. - Del.)] that salted food preparations are namkeen . 3.13. In Para 3.1.1 of Chapter 3 of FOOD SAFETY AND STANDARDS (FOOD PRODUCTS STANDARDS AND FOOD ADDITIVES) REGULATIONS, 2011, it is stated that that banana chips and similar fried products such as Chiwda, Bhujia, Dalmoth, Kadubale, Kharaboondi, Spiced and fried dals, sold by any name are traditional foods i.e., Snacks of Savouries (Fried Products). 3.14. Based on the position stated above, the following queries were raised before Honourable Authority for its Ruling: - Query 1: Whether Jack Fruit Chips sold without BRAND NAME are classifiable as NAMKEENS and are covered by HSN Code 2106.90.99 and taxable under Entry 101 A of Schedule of CT(Rate) Notification No. 1 of 2017? Query 2: Whether the classification of jack fruit chips by my supplier under HSN Code 1903 is correct? Query 3: Whether Roasted and salted / salted / roasted prepar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... boondi, Spiced and fried dals, sold by any name are traditional foods i.e., Snacks of Savouries (Fried products). 4.4 In common/ commercial parlance, NAMKEEN is a ready to eat SAVOURY / SNACKS and is a products prepared by applying salt, masala and the like. As the term NAMKEEN is not defined under CGST Act, common parlance test ought to have been applied. That common parlance meaning has to be applied is clear from the wordings of Supplementary Note No. 6 of Chapter 21 - 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 chips made from banana, jackfruit, tapioca, chembu and potato and kovakkai and pavakkai vattal are NAMKEENS and classifiable under HSN 2106.90.99 and Entry 101 A of Schedule 1 of Central Tax (Rate) Notification 1 of 2017. 4.5. Supplementary Note No. 6 in Chapter 21 makes HSN 2106.90.99 a specific entry. So, chips made from banana (ripe as well as raw), tapioca, jack fruit, potato and chembu and kovakk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1/2017 Central Tax (Rate). From a plain reading of latter part of the description of Entry 40 of Schedule 2 of Central Tax (Rate) Notification No. 1 of 2017 it emerges 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 NUT or SQUASH of any fruit, this entry is not attracted. 4.8. 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 Halwa are sweetmeats and chips of banana, jackfruit, tapioca, chembu, potato, kovakkai and pavakkai vittal and similar preparations are namkeen. In 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 Sub heading 2106 90 as namkeens, bhujia, chabena and similar edible preparations and attract applicable GST rate. 4.9. It is also highlighted that GST Rate for the fruits or tubers [Banana (HSN 0803), Jackfruit (HSN 0810.90.90), Potato (HSN 0701) and tapioca (HSN 0714.90.90)] GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 2106 90 as namkeens, bhujia, chabena and similar edible preparation and attract applicable GST rate . Banana and Jackfruit are mentioned in CHAPTER 8 [EDIBLE FRUIT AND NUTS; PEEL OF CITRUS FRUIT OR MELONS]. Chapter 21 includes items processed out of vegetables like tomato, soya etc., HSN 2103.20.00. Therefore, a product made out of fruit or vegetable need not necessarily fall under Chapter 20 if they are included under any other chapter by specific inclusion. 4.14. It is further submitted by the appellant that application of Rule 2(a) of the General Rules for the interpretation of Import Tariff by Learned Authority for Advance Ruling is unwarranted for the following reasons:- 4.14.1 Application of Rule 2 was made by disregarding Rule 1 of the General rules of Interpretation. Supplementary Note 6 of Chapter 21 established that chips made from banana, tapioca, jack fruit, potato, chembu, kovakka and povakka and sharkkarai varatty are Namkeens / Sweetmeats and hence classifiable under HSN 2106.90.99. HSN 2008 stipulates that it takes into its fold fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etmeats under the HSN 2106.90.90 of the Customs tariff and taxed to GST @ 5% as per entry 101A of Schedule I to Notification No. 1/2017-CT(rate) dated 28.06.2017. The relevant entry as specified under schedule I to the notification no. 1/2017 - CT (rate) dated 28-06-2017 reads as follows:- Entry 101 A of Sch. I of Notification 1 of 2017 HSN 2106.90 Namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, other than 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 any enforceable right in a court of law is available [other than those where any actionable claim or any enforceable right in respect of such brand name has been voluntarily foregone, subject to the conditions as specified in the ANNEXURE 6.3. The appellant has relied upon Supplementary Note No. 5 (b) of chapter 21 to claim classification under heading 2106.90, which provides as under: Heading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter alia, includes: (b) preparation for use, either directly or after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made with jaggery as sweetener, are also sweetmeats. They contended that this submission is fortified by supplementary Note 6 in Chapter 21 as well as the press release dated 29/09/2017 of CBIC containing an FAQ relating to GST Rates. Hence, the question of including Sharkkaraivaratty and Halwa under HSN 2008 does not arise. Relevant portion of FAQ is extracted below:- What is the HS Code and GST rate on chena products, halwa, barfi (i.e. khoya product), lahdu? Products like halwa, barfi (i.e. khoya product), laddus falling under HS Code 2706, are sweetmeats and attract 5% GST. 6.5. We find that Chapter 21 of the Customs tariff covers Miscellaneous edible preparations and the relevant entries of heading 2106 are as under: 21.06 - Food preparations not elsewhere specified or included. 2106.10 - Protein concentrates and textured protein substances 2106.90 - other The explanatory notes to the heading 2106 further excludes: (a) preparation made from fruits, nuts or other edible parts of plants of heading 20.8, provided that the essential character that the preparation is given by such fruits, nuts or other edible parts of plants (heading 20.08 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ures 6.7. We find that the General explanatory notes to chapter 20 provides that this Chapter includes: i. Vegetables, fruit, nuts and other edible parts of plants prepared or preserved by vinegar or acetic acid. ii. Vegetables, fruits nuts, fruit-peel and other parts of plants preserved by sugar. iii. Jams, fruit jellies, marmalades, fruit or nut purees, fruit or nut pastes, obtained by cooking. iv Homogenized prepared or preserved vegetables and fruit. v. Fruit or vegetable juices, neither fermented nor containing added alcohol, or of an alcoholic strength by volume not exceeding 0.5 % vol. vi. Vegetables, fruit, nuts and other edible parts of plants prepared or preserved by other processes not provided for in chapter 7,8 or 11 or elsewhere in the Nomenclature. vii. Products of heading 07.14, 11.05 or 11.06 (other than flour, meal and powder of the products of Chapter 8), which have been prepared or preserved by processes other than those specific in Chapter 7 or 11. viii. Fruit preserved by osmotic dehydration. Further the explanatory notes to heading 2008 reads as follow:- This heading covers fruit, nuts and other edible parts of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducts of this heading are generally put up in cans, jars or airtight containers, or in casks, barrels or similar containers. The heading also excludes products consisting of a mixture of plants or parts of plants (including seeds or fruits) of different species or consisting of plants or parts of plants (including seeds or fruits) of a single or of different species mixed with other substances such as one or more plant extracts, which are not consumed as such, but which are of a kind used for making herbal infusions or herbal teas (e.g., heading 08.13, 19.09 or 21.06). The heading does not cover fruit, nuts or other edible parts of plants transformed into sugar confectionery (including those based on natural honey), of heading 17.04. The heading further excludes mixtures of plants, parts of plants, seeds or fruit (whole, cut crushed, ground or powdered of spices falling in different Chapters (e.g., Chapters 7, 9, 11, 12) not consumed as such, but of a kind used either directly for flavouring beverage or for preparing extracts for the manufacture of beverages (Chapter 9 or heading 21.06). 6.8. Further the entry at Sl. No. 40 of Schedule II to Notification No. 1/20017-CT (rate) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts only. The process of frying in oil and roasting are cooking methods wherein high temperature is used for processing of the edible parts of the fruit or vegetables as in this case. According to the World Book Dictionary Preparation means the act of preparing, making ready a medicine, food, or mixture of any kind made by a special process . The process of roasting and frying has not been excluded in Note 1 to Chapter 20 and as such Note 1 is applicable to Roasted and fried vegetables, fruits, nuts and edible parts of plants. Further the explanatory notes to heading 2008 specify that this heading covers fruit, nuts and other edible parts of plants, whether whole, in pieces or crushed, including mixtures thereof, prepared or preserved otherwise than by any of the processes specified in other Chapters or in the preceding headings of this Chapter. When according to chapter notes and description of tariff items, the products are classifiable under specific headings of Chapter 20, they cannot be classified under Heading 2106 as food preparations not elsewhere specified or included or under Chapter 8 as claimed by the appellant. 6.11. The appellant had raised a contention that Appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance with other materials or substances. Any reference to goods of a given material or substances shall be taken to include a reference to goods consisting wholly or partly of such material or substances. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3. Rule 3: When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the KGST Act 1963. This decision is based on the schedule of KGST Act which was the taxation law applicable then. In GST, there is no separate entry for classification of bakery products Instead, the classification under GST laws is based on customs tariff, which has been applied properly as detailed above. Therefore, this case law is not applicable to the case in hand. Another case relied upon by the appellant is the decision in case of Pepsico India holdings P Ltd Vs Commissioner of Central Excise and ST Chandigarh 2015 (318) ELT 278. It was held that potato wafers packaged in retail packing are prima facia classifiable under item number 2005 20 00 of chapter 20 hence eligible for exception under notification issued under Central Excise Tariff Act 1985. Further, the contention of the departments to classify same under heading 2106 90 99 was not held appropriate as against heading 2005 20 00 as far as classification is concerned. This instead re-enforces the decision taken in this case by the lower authority. 6.15. Moreover, we rely upon the following case laws: (1) Hon'ble Supreme Court in the case of CCE v. Jayant Oil Mills Pvt. Ltd. reported in 1989 (40) E.L. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of for the purpose of the classification of the goods are the composition, the product literature, the label, the character of the product and the use to which the product is put. 6.16. The case of Advance ruling authorities RE; MR. P.M. SANKARAN [KER/53/2019 Dated 21 June 2019] and KER/66/2019 dated SEPTEMBER 30, 2019, it is held that Jackfruit Chips, Banana Chips and Sharkaraivaratty fall under HSN 2008.19.40 and have to be classified under Entry 40 of Schedule 2 of Notification No. 1 of 2017 and tax at 12% is to be paid. 6.17. Accordingly, on the basis of the above stated law and facts, all the other contentions of the appellant are rejected being not tenable and impugned goods viz. Jackfruit Chips, Banana Chips, Tapoica Chips, Potato Chips, Chembu Chips and Pavakka Chips (Bittergourd) (Whether salted/ masala or otherwise) are held classifiable under Tariff Heading 2008 19 40 of the Customs Tariff Act, 1975. Regarding classification of roasted/salted/roasted and salted Cashew nuts, Ground nuts, and other nuts, there are specific headings under Chapter 20 that covers the products. Accordingly, roasted /salted / roasted and salted Cashew nuts are held classifiable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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