9911796707
TMI Blog2025 (5) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... 7;। कच्ची तम्बाकू को एक बड़े मिक्सर में डाला जायेगा। ↓ फिर उसमें लाइम पेस्ट डाला जायेगा। ↓ मिक्सर मशीन से अच्छी तरह मिलाया जायेगा।. ↓ फिर पाउच पैकिंग मशीन द्वारा विभिन्न ग्रामेज में पाउच पैक किया जायेगा। ↓ ê ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l number 56 of notification No. 1/2017-Compensation Cess dtd 28.6.2017; * that they would like to rely on the judgement of the Hon'ble SC in the case of Osnar Chemical P Ltd 2012-TIOL-03-SC-CX and Damodar J Malpani 2002 (146) ELT 483-SC; * that they would like to rely on the ruling in the case of M/s. Gynkeer Products P Ltd Ruling No. Raj/AAR/22-23/07 dtd 1.6.2022 and M/s. Pandey Traders Ruling No. 8/AAAR/09/08/2023 dtd 9.8.2023. 4. In view of the aforesaid, the applicant has sought advance ruling on the below mentioned questions viz 1. What will be the classification of the goods viz 'sada tambaku pre-mixed with lime' proposed to be manufactured & supplied by them? 2. What will be the rate of GST & compensation cess of the goods viz 'sada tambaku pre-mixed with lime; proposed to be manufactured and supplied by them? 5. Personal hearing in the matter was held on 26.11.2024 wherein the applicant was represented by Shri V K Agrawal, Advocate, Shri R J Thakker and Shri P M Pandya. They reiterated their submission made in the application and submitted a compilation of case laws. Revenue's submission: 6. Deputy Commissioner, CGST, Division-VI, Ahmedabad North Commissionerate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central CGST State/UT SGST/ UTGST Inter-State IGST Compensation Cess 28% IGST or 14% CGST + 14% SGST/UTGST : Heading No. 2401 Unmanufactured tobacco; tobacco fuse [other than tobacco leaves)- Vide Notification Nos. 1/2017-C.T. (Rate) & 1/2017-I.T. (Rate), dated 28-6-2017 end SGST/ UTGST Notifications. 2401 10 Tobacco, not stemmed or stripped: 2401 10 10 --- Flue cured Virginia tobacco kg. 14% 14% 28% $ 2401 10 20 --- Sun cured country (natu) tobacco kg 14% 14% 28% $ 2401 10 30 --- Sun cured Virginia tobacco kg. 14% 14% 28% $ 2401 10 40 --- Burley tobacco kg. 14% 14% 28% $ 2401 10 50 - Tobacco for manufacture of biris, not stemmed kg 14% 14% 28% $ 2401 10 60 --- Tobacco for manufacture of chewing tobacco kg. 14% 14% 28% $ 2401 10 70 --- Tobacco for manufacture of cigar and cheroot kg. 14% 14% 28% $ 2401 10 80 --- Tobacco for manufacture of hookah tobacco kg. 14% 14% 28% $ 2401 10 90 - Other kg 14% 14% 28% $ 2401 20 -Tobacco, partly or wholly stemmed or stripped: $ 2401 20 10 --- Flue cured Virginia tobacco kg 14% 14% 28% $ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r/Heading /Sub-heading/Tariff item Description of Goods (1) (2) (3) 13. 2401 Unmanufactured tobacco; tobacco refuse [other than tobacco leaves] 15. 2403 Other manufactured tobacco and manufactured tobacco substitutes; "homogenised" or "reconstituted" tobacco; tobacco extracts and essences [including biris] * Relevant extracts of compensation cess notification Notification No. 1/2017-Compensation Cess (Rate) New Delhi, the 28th June, 2017 G.S.R. (E) .- In exercise of the powers conferred by sub-section (2) of section 8 of the Goods and Services Tax (Compensation to States) Act, 2017 (15 of 2017), the Central Government, on the recommendations of the Council, hereby notifies the rate of cess as specified in column (4) of the Schedule appended to this notification, that shall be levied on the intra-State supplies or inter-State supplies of such goods, the description of which is specified in the corresponding entry in column (3) and falling under the tariff item, sub- heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedule. Schedule S.No. Chapter /Heading /Sub-heading /Tariff item Description of Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturing process is already mentioned supra. The applicant is of the opinion that their product premixed with lime is an unmanufactured tobacco which will fall under HSN 24012090. Per-contra Revenue feels that owing to the process carried by the applicant, the raw tobacco becomes ready for use by the consumer, and hence the said process amounts to manufacture; that therefore, the proposed product is classifiable under HSN 24039910-Chewing tobacco-without lime tube, attracting GST @ 28%; that the compensation cess is also leviable in terms of notification No. 03/2023-Compensation Cess (Rate) dtd: 26.07.2023. 11. HSN 2403, is reproduced below for ease of understanding: CHAPTER 24 GST Tariff - Goods Chapter/ Heading/ Sub-heading/ Tariff Item Description of goods Unit GST Rates* Central CGST State/UT SGST/ UTGST Inter-State IGST Compensation Cess (1) (2) (3) (4) (5) (6) (7) 2403 Other manufactured tobacco and manufactured tobacco substitutes; "homogenised" or "reconstituted" tobacco; tobacco extracts and essences » 28% IGST or 14% CGST + 14% SGST UTGST: Heading No. 2403 : Other manufactured tobacco and manufactured tobacco substitutes; "homogenised" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) Tobacco compressed or liquored for making snuff. (5) Manufactured tobacco substitutes, for example, smoking mixtures not containing tobacco. However, products such as cannabis are excluded (heading 12.11). (6) "Homogenised" or "reconstituted" tobacco made by agglomerating finely divided tobacco from tobacco leaves, tobacco refuse or dust, whether or not on a backing (e.g., sheet of cellulose from tobacco stems), generally put up in the form of rectangular sheets or strip. It can be either used in the sheet form (as a wrapper) or shredded/chopped (as a filler). (7) Tobacco extracts and essences. These are liquids extracted from moist leaves by pressure, or prepared by boiling waste tobacco in water. They are used mainly for the manufacture of insecticides and parasiticides. The heading does not cover : (a) Nicotine (the alkaloid extracted from tobacco) (heading 29.39). (b) Insecticides of heading 38.08. 12. Let us first examine the applicant's claim of the product being unmanufactured tobacco. In the supplementary notes, the term tobacco stands defined. There is no definition for the term unmanufactured tobacco. However, the explanatory notes of HSN 24.01 covers unma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs as under : "Preparation and Form Chewing Tobacco : Chewing tobacco typically comes in loose leaf or twist form. It consists of cured and fermented tobacco leaves. Chewing tobacco is usually taken by placing a portion of it between the cheek and gum, where it releases nicotine over time as it's slowly chewed. ............ Flavour and Aroma Chewing Tobacco : Chewing tobacco can come in various flavours, but it may not always be as strongly scented or flavoured as Zarda. The flavours can range from natural tobacco flavours to menthol, wintergreen, or other fruit and spice flavours. Use with Betel Nut and Paan Chewing Tobacco : While chewing tobacco can be used alongside betel nut and paan, it is not exclusive to this combination. Chewing tobacco can be used independently as well. 15. Manufacture is defined under CGST Act, 2017 under section 2 (72) to mean processing of raw materials or inputs in any manner that results in emergence of a new product having a distinct name, character and use. The process undertaken by the applicant, as is reproduced in paragraph supra, reveals that raw tobacco is mixed with lime paste in a big mixer consequent to which the same is pack ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etation of fiscal statute and [b] manufacture, the details of which are as under: [a] Interpretation of fiscal statute -Baroda Rayons Corporation 2023 (383) ELT 375. -VVF India Ltd 2023 (70) GSTL 444 (SC). -A V Fernandez AIR 1957SC 657. -Ranbaxy Laboratories Ltd 2011 (273) ELT 3 (SC). -Intas Pharmaceuticals Ltd 2013 (289) ELT 256 (Guj). We have gone through the aforementioned judgements and are in respectful agreement with the judgement in so far as it lays down the principle as to how the fiscal statutes are to be interpreted. [b] Manufacture (i) Satnam Overseas Ltd 2015 (318) ELT 538 (SC). The Hon'ble SC held that addition of dehydrated vegetables and spices to raw rice, does not lead to a different product since its primary and essential character remained same. Further, processing original product with addition of value is not sufficient unless its original identity also undergoes transformation and it becomes distinctive and new product. (ii) Crane Betel Nut Powder Works 2007 (210) ELT 171 (SC) The Hon'ble SC held that crushing betel nuts into smaller pieces and sweetening it with essential/non-essential oils, menthol, sweetening agents etc. did not result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Hon'ble SC held that departmental clarifications of CBEC neither withdrawn nor cancelled despite subsequent Larger Bench decision against it, is binding on department even if view taken therein was not warranted by language of statute. As is evident, the facts of the case are not similar. The reliance therefore placed on this case is not tenable. (ix) Muthuvelappa Gounder & Sons 2010 (256) ELT 320 Tri. The finding of the Hon'ble Tribunal in the case is reproduced below for ease of understanding viz 2. After hearing both sides we find that the respondents are merely curing the tobacco outside their premises by treating the same with jaggery water for preventing moulding and drying. Such treatment merely results in production of cured tobacco which as per the HS Explanatory Notes under Heading 2401 remains covered as unmanufactured tobacco under the said heading. Accordingly, we find no merit in the case of the Department. Consequently, we uphold the impugned order and dismiss the appeal filed by the Revenue. We have gone through the aforementioned judgement. We find that the facts of the case are not forthcoming. Even otherwise, in this matter the tobacco was treated with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal); 2002 (147) E.L.T. 1184 (Tribunal); 1962 (3) STC 202; 2000 (117) E.L.T. 743 relied on]. [paras 2.2(a), 2.3 (b), (c)&(e)] The department feeling aggrieved filed an appeal before the Hon'ble Apex Court, which after condoning the delay dismissed the CA No. D3948 of 2006 filed by CCE, Surat-II. On going through the judgement, we find that the facts are not similar in so far as the Hon'ble Tribunal in this case held that the raw leaf treated with tobacco solution Quimam and other flavours including saffron water had not resulted in the raw tobacco leaf undergoing any irreversible change and that it remained raw leaf tobacco unmanufactured. The Tribunal further held that the mixture was too concentrated for comfortable consumption by human beings and fails to meet test of marketability of product as 'chewing tobacco'. This is not the case with the product in question 'sada tambaku pre-mixed with lime' as post mixture of the tobacco with lime paste, it is fit for consumption/chewing. (x) Gyankeer Products P Ltd Ruling No. Raj/AAR/2022-23/07 dated 1.6.2022. The reliance of the applicant is not tenable owing to [a] section 103 of the CGST Act, 2017 and also owing to the specif ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
