TMI Blog2022 (3) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... the preparations made from fruit, nuts or other edible parts of plants of heading 20.08, 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. 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 freezing, 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) - there remains no doubt that the roas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 under Tariff Heading 2008 19 10, and other roasted/ salted / roasted and salted nuts and seeds are classifiable under 2008 19 20 of the Customs Tariff Act, 1975 - it is evident that all the products that fall under Chapter Heading 2008 of the Customs Tariff Act, 1975 attract GST at the rate of 12%. - ORDER No. AAR/15/2021 - - - Dated:- 14-12-2021 - Shyam Raj Prasad, IRS Chief Commissioner Central Tax, Central Excise Customs Thiruvananthapuram Zone And Dr. Rathan U. Kelkar, IAS Commissioner State Goods Service Tax Kerala Authorized Representative: CA Shri C. Seshadri Nadan ORDER No. AAR/15/2021 dated 14/12/2021 1. The appeal stands filed under Section 100(1) of the GST Act, 2017, by Sri. Abdul Aziz, M/s. GLOW WORM CHIPS having a registered office at 12/34, Kurichamkullam, Kallekkad, Palakkad - 678006, bearing GSTIN 32BBHPA7155F1Z2 (hereinafter referred as the appellant). The app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these items as Namkeens under heading 2106.90 in view of Entry 101A of Schedule I to Notification No. 1/2017-CT(rate) and supplementary notes 6 of chapter 21 of Customs Tariff Act. The appellant is levying CGST / SGST / IGST @5% by classifying the commodities under Entry 101 A and 101 of Schedule I to Notification No. 1/2017-Central Tax (Rate). 3.3. The appellant raised following queries before Honourable Advance Ruling Authority, Kerala for its Ruling: - Query 1 : Whether Jack Fruit Chips and Banana Chips (salted and masala varieties) made out of raw as wen as ripe banana 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 Schedule of Central Tax (Rate) Notification 1 of 2017? Query 2: Whether Sharkaraivaratty sold without BRAND NAME is classifiable as SWEET MEATS and covered by HSN Code 2106.90.99 and taxable under Entry 101A of Schedule of Central Tax (Rate) Notification 1 of 2017? Query 3 : 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 fried dale, 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 / SNACK and is a product 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 wording of Supplementary Note No. 6 of Chapter 21 - commonly known as Misthans or Mithai or caned 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-heading 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Entry 101 and 101 A of Schedule 1 of Notification No. 1/2017 Central Tax (Rate). Moreover 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 SQU SH of any fruit, this entry is attracted. 4.8. Further by applying the principles of para 3.3 and 3.4 of Circular No. 113/32/2019- GST [F. No. 354/131/2019-TRU], dated 11-10-2019, Sharkkaraivaratty and Halwa are sweetmeats and chips of bananan, jackfruit, tapioca, chembu, potato, kovakkai and pavakkai vattal 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 namkeen, bhuji ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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:- - 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 pavakka and sharkkarai varatty are Namkeens/ Sweetmeats and hence classified 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 sweetening matter or spirit, not elsewhere specified or included. It is submitted 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 in para 29 of the judgment in H.P.L. Chemicals Ltd. v. Commissioner of Customs, Chandigarh (2006) 2006 taxmann.com 42 (SC), if Revenue is resorting to a classification different from that of the assessee, bur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm, 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 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 processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption . The appellant has contended that Supplementary Note No. 5 (b) of Chapter 21 of Customs Tariff Act states that Heading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter alia includes preparations for use, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rfi (i.e. khoya product), laddus falling under HS Code 2106, 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 20.08, provided that the essential character that the preparation is given by such fruits, nuts or other edible parts of plants (heading 20.08) Similarly the chapter note 1 to chapter 21 provides as under: 1. - This chapter does not cover: (a) Mixed vegetables of heading 07.12; (b) Roasted coffee substitutes containing coffee in any proportion (heading 09.01); (c) Flavored tea (heading 09.02); (d) Spices or other products of heading 09.04 to 09.10; (e) Food preparations, other than the products described in heading 21.03 or 21.04, containing more than 20% by weight of sausage, meat, meat offal, blood fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uit or vegetable juices, neither fermented nor containing added alcohol, or of an alcoholic strength by volume not exceeding 0.5 % vol. (f) 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. (g) 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. (h) 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 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. It includes, inter alia: (1) Almonds, ground-nuts, areca (or betel) nuts and other nuts, dry-roasted, oil-roasted or fat-roasted, whether or not containing or coated with vegetable oil, salt, flavours, spices or other additives. (2) Peanut butter , consisting of a paste made by gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) dated 28.06.2017 read as follows: Sl. No. Chapter/ heading/ sub-heading /Tariff item Description of goods 40 2008 Fruits, 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; such as Ground nuts, Cashew nuts, roasted, salted or roasted and salted, Other roasted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Application of rule 2(a) of the general rule of interpretation of the import tariff by the learned authority for advance ruling is unwarranted. In this regard, reference is made to the provisions of Notification 1/2017 CT (rate) dated 28-6-2017 which specifies about tax rate of goods and classification applicable to them. The Explanation appended to the Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017 reads as follows; Explanation:- (1) In this Schedule, tariff item, heading, sub-heading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 be classified as if they consisted of the material or component which gives them their essential character, insofar 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 numerical order among those which equally merit consideration. Rule 4: Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most aki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 of 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.T. 287 (S.C.) observed, inter alia, as follows; It is well settled that resort could not be had to the residuary item if the product comes within the ambit of any other tariff item. (2) In the case of Western India Plywoods Ltd. v. Collector of Customs reported in 2005 (188) E.L.T. 365 S.C. the Hon'ble Supreme Court, inter alia, held that; Application of residuary item only when no other heading expressly or by necessary implication applies. (3) In the case of Commissioner of Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 under Tariff Heading 2008 19 10, and other roasted/ salted / roasted and salted nuts and seeds are classifiable under 2008 19 20 of the Customs Tariff Act, 1975. 6.18. In the light of the discussion above, it can be seen that the impugned products are classifiable under different Tariff Items of Heading 2008 of Chapter 20 of the Customs Tariff Act, 1975. Regarding rate of GST applicable to the said goods, the entry at Sl. No. 40 of Schedule II of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017 read as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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