TMI Blog2022 (10) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... be under Chapter heading 2106 as the subject Parathas require to be cooked before the same can be consumed. The Chapter heading 2106 covers food preparations not elsewhere specified or included and Parathas do not fall under any specific chapter head. Further as per Rule 3(c) of Rules of Interpretation, when goods cannot be classifiable under Rule 3(a) or 3(b) then they shall be classified under the heading which occurs last in numerical order among those which merit consideration. Thus, among the headings 1905 and 2106, latter occurs last in the numerical order and hence heading 2016 would be more appropriate and right classification of appellant's product, even from this consideration. The Parathas supplied by the appellant are different from Plain Chapatti or Roti and cannot be treated as or covered under the Category of Plain Chapatti or Roti and appropriate classification of Parathas would be under Chapter heading 2106. - GUJ/GAAAR/APPEAL/2022/20 - - - Dated:- 15-9-2022 - MILIND TORAWANE AND VIVEK RANJAN, MEMBER Present for the appellant: Shri Amal Dave, Advocate At the outset we would like to make it clear that the provisions of the Central Goods and Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covers various eatables including bread and HSN explanatory notes includes unleavened bread having common ingredients viz. cereal flours, leavens and salt and may contain other ingredients. The appellant further submitted that roti, chapatti which is unleavened bread of Indian origin like paratha is covered under Sl.No. 99A of Schedule-I of Notification No. 01/2017-CT, as amended by Notification No. 34/2017-Rate; the appellant referred to Rule 3(b) of the Rules for Interpretation of Tariff for mixtures and composite goods which is called 'predominance test of classification' and in product namely Paratha. wheat flour is predominant material and therefore appellant submitted that Paratha, having close resemblance of roti and chapatti would merit classification under HSN Code 19059090 chargeable to GST @5% Adv. 5. The Gujarat Authority for Advance Ruling (herein after referred to as 'the GA AR'), vide Advance Ruling No. GUJ/GAAR/R/20/2021 dated 30.06.2021, inter-alia observed that appellant's product i.e. Parathas are not ready for consumption product but requires 3-4 minutes of cooking as well as they are not akin to roti or chapattis which are primarily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Rate) dated 14-11-2017) with effect from 15-11-2017 and liable to GST at the rate of 18% (9% SGST+9% CSGT). 7. Aggrieved by the aforesaid advance ruling, the appellant has filed the present appeal. 7.1 The appellant in the grounds of appeal has submitted that the GAAR erred in observing that Paratha is not classifiable under Chapter Heading 1905 as they require 3-4 minutes of cooking as in the GST Tariff and HSN explanatory notes to Chapter 19. it has not been mentioned that Heading 1905 only covers ready to eat products. The appellant submitted that GAAR also erred in observed that plain chapatti or roti does not require any processing before consumption as if paratha. chapatti or roti presented in packed condition and bought by consumer, they require to be subjected to heating process for making them eatable. The appellant referred that pizza bread, covered under Heading 1905, is also eligible for concessional rate of duty vide Notification No. 01/2017-CT (Rate) dated 28.06.2017 and 5% GST is applicable on pizza bread, rusk and toasted bread and it is clear that pizza bread and toasted bread require heating and cooking before consumption and this fact alone proves th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt relied upon the Appellate Advance Ruling in case of M/s Ramachandran Bror [2018 (18) GSTL 367] wherein it was held that goods which are not covered under specific heading are classifiable under heading appropriate to the goods to which they have the most similar character and that if such goods are similar to other goods, then the residual entry of classification should not be resorted to. The appellant also relied upon the ruling of Maharashtra Authority of Advance Ruling in case of M/s Signature International Foods India Pvt Ltd [2019 (20) GSTL 640] wherein it was held that paratha is covered under Entry 99A and liable to 5% GST. The appellant submitted that Maharashtra Authority while holding above, observed that various types of Indian Breads called by different names by users depending upon their regions like Roti, fulka, bhakhri. rotla etc. and therefore, classification should not merely be guided by nomenclature but it should be guided by the manner it is consumed. 7.4 The appellant submitted that the GAAR erred in classify the goods under residual entry i.e. Heading 2106 as residual entry covers all the items which are nowhere specified or are not classifiable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordance with the Customs Tariff Act, 1975. the rate of tax applicable would be arrived at on the basis of notifications issued under GST by the respective Governments. 13. The appellant claimed that Paratha is classifiable under Chapter Heading 1905 of Customs Tariff Act, 1975 which is reproduced below: CHAPTER 19 1905 - BREAD, PASTRY, CAKES, BISCUITS AND OTHER BAKERS' WARES, WHETHER OR NOT CONTAINING COCOA; COMMUNION WAFERS, EMPTY CACHETS OF A KIND SUITABLE FOR PHARMACEUTICAL USE, SEALING WAFERS, RICE PAPER AND SIMILAR PRODUCTS 1905 10 00 Crispbread 1905 20 00 Gingerbread and the like Sweet biscuits; waffles and wafers; 1905 31 00 Sweet biscuits 1905 32 Waffles and wafers: Communion wafers: 1905 32 11 Coated with chocolate or containing chocolate 1905 32 19 Other 1905 32 90 Other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Parathas do not merit classification under Heading 1905. 14. The appellant in their grounds of appeal stressed on the point that their product i.e. parathas are akin to roti or chapatti which is classifiable under Heading 1905 and liable to 5% GST by virtue of Entry at 99A of Schedule to Notification No. 01/2017 -Central Tax (Rate) 28.06.2017. The appellant has also contended that, while determining classification of Paratha. Rule 3(b) of Rules of Interpretation of Tariff is squarely applicable. According to the said rule Paratha would be classifiable as per the component which gives it. it's essential character, which in this case is wheat flour and accordingly Paratha is more appropriately classifiable under Heading 1905 instead under residual entry al Heading 2106. 14.1 As regard the appellant's contention that their product is similar to roti or chapatti, we have gone through the composition of various types of parathas as provided by the appellant and found that they have one common ingredient wheat flour (36% to 62% depending upon the type of paratha) and other ingredients are water, edible vegetable oil, salt, anti-oxidant, alu (potato), vegetables, mooli (rad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods 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 3(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 3(a) or 3(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 akin. 14.3 On examining the above rules of interpretation and the contention of the appellant that in their case Rule 3(b) is applicable for classifying Paratha under chapter heading 1905 as the component viz. wheat flour which gives Paratha its essential character is akin to Roti or Chapatli, we find that the said contention does not hold ground as appellant's products i.e. different varieties of Parathas are different from Roti and Chapatti. The only common thread between these items is usage of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90 50 --- Compound preparations for making non-alcoholic beverages 2106 90 60 --- Food flavouring material 2106 90 70 --- Churna for pan 2106 90 80 --- Custard powder 0 --- Other : 2106 90 91 -- Diabetic foods 2106 90 92 -- Sterilized or pasteurized millstone 2106 90 99 --- Other 14.5 The supplementary note 5 to Chapter 21 of the Customs Tariff which explains the scope of tariff heading 2106 is as under: 5. Heading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter alia, includes: a. protein concentrates and textured protein substances: b. preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption; c. preparations consisting wholly or partly of foodstuffs, used in the making of beverages of food preparations for human consumption: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by appellant, wherein it is mentioned that heat on a medium flame for about 3-4 minutes (flipping after every 30 seconds) pressing gently till Paratha is golden brown on both sides . On going through the above, we observe that the above process of 3-4 minutes of heating amounts to cooking of the Parathas as the color of the Parathas changes and the frozen Parathas become ready for consumption. As compared to Roti or Chappati or items falling under Chapter heading 1905 which are ready to eat and does not require any further processing before consumption, the appellant's products have to be cooked before the same can be consumed. 15. The appellant has contended that GAAR had mainly gone on the test of nomenclature and not given any importance to end user test as to how the product is known in the market and the way it is being consumed; that Paratha is similar to roti or chapatti and both are consumed in similar fashion. In this regard we refer to the Supreme Court's judgment in case of CCE Vs Carrier Aircon Ltd [2006 (199) E.L.T. 577 (S.C.)] wherein the apex court has observed that End use to which the product is put to by itself cannot be determinative of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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