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2019 (7) TMI 46 - AAAR - GSTClassification of goods - Gudakhu - levy of compensation cess - liability of NCCD - whether classified under CETH 2403 99 90 or under the tariff item 24031110 ? - rate of tax - HELD THAT - By applying the interpretative rules, which are statutory guidelines for interpreting the tariff and taking into consideration the relevant sub-heading note, we are in agreement with the rulings of the Advance Ruling Authority that Gudakhu being manufactured by the Appellant for use as a tooth paste is appropriately classifiable under residuary tariff item 2403 9990. Neither in the appeal petition nor during the hearing of the case, the appellant could produce any case law/judgments of High Court/order of CESTAT, where-in products manufactured by the appellant was ordered for classification under Tariff item 240311. Scope of the forum - higher rate of Compensation Cess for sub-heading 2403 9990 vis-a-vis 2403 11 10 - HELD THAT - The fixation of rate of duty is beyond the scope of this forum. The Ruling pronounced by the Advance Ruling Authority, is thus correct and justified - appeal dismissed.
Issues Involved:
1. Appropriate Classification of Gudakhu under the GST Tariff Heading. 2. Determination of the liability to pay NCCD (National Calamity Contingency Duty). Issue-wise Detailed Analysis: 1. Appropriate Classification of Gudakhu under the GST Tariff Heading: The appellant is engaged in the manufacture and sale of Gudakhu, a tobacco product in paste form used orally. The appellant sought to reclassify Gudakhu under tariff item 2403 11 10, which pertains to Hookah or Gudakhu Tobacco intended for smoking in a water pipe. The Odisha Authority for Advance Ruling (AAR) initially classified it under tariff item 2403 99 90, a residual category for other manufactured tobacco products. The AAR noted that Gudakhu in paste form used as toothpaste is distinct from hookah tobacco, which is granular and used for smoking. The sub-heading 2403 11 specifically covers water pipe tobacco intended for smoking, which includes a mixture of tobacco and glycerol. The product manufactured by the appellant does not fit this description as it is not intended for smoking. The appellant argued that the classification under 2403 99 90 was done under instructions from Central Excise officials and that Gudakhu should be classified under 2403 11 10 based on its composition and expert opinions. However, the AAR maintained that Gudakhu in paste form does not qualify as water pipe tobacco and should remain classified under the residual category 2403 99 90. The appellate authority upheld the AAR's decision, emphasizing that Gudakhu intended for use as toothpaste does not meet the criteria for classification under 2403 11 10. The classification under 2403 99 90 is appropriate as it covers other forms of tobacco not specified in preceding sub-headings. 2. Determination of the liability to pay NCCD (National Calamity Contingency Duty): The AAR clarified that the determination of liability to pay NCCD is beyond its jurisdiction as NCCD is levied under the Central Excise Act and not under the CGST/OGST/IGST Act. The scope of issuing a ruling under Section 98 of the OGST/CGST Act is limited to matters prescribed in Section 97(2) of the OGST/CGST Act. Therefore, the AAR cannot rule on the appellant's liability to pay NCCD. Conclusion: The appellate authority upheld the AAR's ruling, confirming that Gudakhu in paste form is correctly classified under tariff item 2403 99 90. The appellant's arguments regarding reclassification and expert opinions were not supported by statutory provisions. Additionally, the determination of NCCD liability was deemed outside the AAR's jurisdiction. The appeal was dismissed, and the ruling of the Odisha Authority for Advance Ruling was affirmed.
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