9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (4) TMI 1545 - AAAR - GSTClassification of goods - Breaded Cheese - Whether the product Breaded Cheese ( impugned goods ) is classifiable as cheese under Heading 0406 - taxable at the rate of 6 percent each under S. No. 13 of the Schedule-II appended to Notification No. 1/2017-Central Tax (Rate) dated June 28, 2017? - HELD THAT - The cheese forms most important constituent (55% of total volume) of the product and the impugned goods cannot be formed without cheese. The batter and bread coating are not essential and can be easily substituted. It is only cheese that differentiates the impugned goods from any other product. As Heading 0406 includes processed cheese , which may also contain cream or other dairy products, salts, spices, flavouring, colouring and water - it is undisputed that impugned goods are neither sweetmeat nor are they in the nature of namkeens, bhujia etc. The impugned goods thus are not coveted by Supplementary Chapter Note 6. The HSN and Explanatory Notes which form essential guidance for interpretation of any Heading make it abundantly clear that cheese which contain various additions that are battered or breaded and pre-cooked are included as Cheese under Heading 0406. Ingredients and characteristics of the product with which we are concerned do not contain any material or feature, which will take the said product out of goods falling under Heading 0406. Thus, Goods under reference are classifiable under S. No. 13 of Schedule II of Notification 1/201 7 of Central tax (Rate). vide Heading 0406 and taxable @ 12% GST.
Issues Involved:
1. Classification of the product 'Breaded Cheese' under HSN 0406 or HSN 2106. 2. Applicable GST rate for the product. Issue-wise Detailed Analysis: 1. Classification of the product 'Breaded Cheese' under HSN 0406 or HSN 2106: The appellant, M/s. Savencia Fromage and Dairy Pvt. Ltd., argued that their product 'Breaded Cheese' should be classified under HSN 0406 as 'other cheese'. They relied on explanatory notes under Heading 0406, which state that the presence of ingredients like meat, fish, herbs, spices, vegetables, etc., does not affect the classification as long as the product retains the character of cheese. They also cited U.S. Customs Ruling HQ 963175 and other case laws to support their claim. The process of making 'Breaded Cheese' involves: - Cutting processed cheese into small pieces and mixing with spices. - Coating these pieces with batter and bread crumbs. - Partially frying in vegetable oil. - Freezing and packing. The appellant emphasized that cheese constitutes 55% of the product by volume, and the batter and bread coating are not essential components. They argued that the product retains the essential characteristics of cheese and should therefore be classified under Heading 0406. The appellate authority examined the ingredients and processes and noted that the composition of the product was not in dispute. They referred to the Customs Tariff Act and the Harmonized System of Nomenclature (HSN) for interpreting the classification. Chapter 4 of the Customs Tariff Act, which deals with dairy produce, includes products under Heading 0406 if they retain the character of cheese, even if they contain other ingredients or are coated with batter or bread crumbs. The authority found that 'Breaded Cheese' meets the criteria for classification under Heading 0406, as it retains the characteristics of cheese despite the addition of other ingredients and processes. 2. Applicable GST rate for the product: The appellant sought a ruling that the product be taxed at the rate of 6% CGST and 6% SGST under S. No. 13 of Schedule II of Notification No. 1/2017-Central Tax (Rate). The original ruling by the Authority for Advance Ruling classified the product under Heading 2106, which would subject it to 18% GST. The appellate authority, after extensive deliberation, concluded that the product should be classified under Heading 0406. Consequently, the product falls under S. No. 13 of Schedule II of Notification No. 1/2017-Central Tax (Rate) and is taxable at 12% GST (6% CGST + 6% SGST). Ruling: The appellate authority modified the original ruling to classify the product 'Breaded Cheese' under Heading 0406 of the Customs Tariff Act. The product is thus taxable at 12% GST (6% CGST + 6% SGST) under S. No. 13 of Schedule II of Notification No. 1/2017-Central Tax (Rate).
|
