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2020 (9) TMI 590 - AAR - GSTClassification of goods - Maize Bran (cattle feed) - classifiable under Heading 23021010 of Central Excise Tariff Act, 1985 or otherwise - whether chargeable to CGST @2.5% under Sr.No.103A of Notification No.1/2017 or chargeable to NIL rate as per Sr.No.102 of Notification No.2/2017? - HELD THAT - The products which were left out from Sr.No.103A of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 have found mention in Sr.No.102 of Notification No.2/2017-Central Tax (Rate) dated 28.06.2017. The applicant has supplied 19.520 tonnes of Maize Bran Dry to Shri Ramdev Oil Industries, Patan, a manufacturer who is engaged in the manufacture of cattle feed ( as per the data available online). Thus for the above manufacturer, maize bran is just an input/ingredient which is used in the manufacture of their final product i.e.cattle feed. It can therefore be concluded that the maize bran sold by the applicant is used by the above company as in input in the manufacture of cattle feed but is not a cattle feed by itself. It is also seen that Maize Bran is specifically mentioned in Sub-heading No.23021010 of the First Schedule to the Custom Tariff Act, 1975 (51 of 1975) and the word Bran is specifically mentioned in Sr.No.103A of Notification No.2/2017-Central Tax (Rate) dated 28.06.2017 - thus, the product maize bran does not warrant classification under Sr.No.102 of Notification No.2/2017-Central Tax (Rate) as the product does not classify as cattle feed and is correctly classifiable as Bran under Sr.No.103A of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017. The product Maize Bran manufactured and supplied by M/s. Gujarat Ambuja Exports ltd. is covered under Entry Sr.No.103A of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 of the CGST Act, 2017 on which rate of GST chargeable is 5%.
Issues Involved:
1. Classification of Maize Bran under GST. 2. Applicable GST rate for Maize Bran. 3. Eligibility for exemption under specific GST notifications. Detailed Analysis: 1. Classification of Maize Bran under GST: The applicant, engaged in the manufacture and taxable supply of Maize starch and its derivatives, produces Maize Bran as a by-product. The applicant contends that Maize Bran, being a by-product of maize processing, should be classified under Heading 23021010 of the Central Excise Tariff Act, 1985, as it was prior to the GST regime. The relevant entry for Maize Bran is found at Sr.No.103A of Schedule-I of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017, which includes "Bran, sharps and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants." 2. Applicable GST Rate for Maize Bran: The applicant seeks determination on whether Maize Bran, used as cattle feed, is chargeable to CGST at 2.5% under Sr.No.103A of Notification No.1/2017 or at NIL rate as per Sr.No.102 of Notification No.2/2017. The Notification No.1/2017 specifies a 2.5% CGST rate for goods under Schedule I, including Maize Bran. Conversely, Notification No.2/2017 specifies a NIL rate for certain goods, including cattle feed, but explicitly excludes "Bran, sharps and other residues" under Sr.No.102. 3. Eligibility for Exemption under Specific GST Notifications: The applicant argues that Maize Bran, widely used as a major ingredient in cattle feed, should be exempt under Sr.No.102 of Notification No.2/2017, as it is understood in common parlance as cattle feed. The applicant supports this with various case laws emphasizing classification based on trade parlance and beneficial notification interpretation. Discussion & Findings: The Authority for Advance Ruling (AAR) examined the submissions and the legal provisions. It was noted that Maize Bran falls under Sub-heading 23021010 of the Customs Tariff Act, 1975, and is specifically covered under Sr.No.103A of Notification No.1/2017. The definition and composition of Maize Bran indicate it is a supplement added to cattle feed to enhance its quality, not a cattle feed itself. The sample invoice provided by the applicant showed Maize Bran supplied to a manufacturer engaged in cattle feed production, further supporting that Maize Bran is an ingredient rather than the final product. Citations and Judgments: The applicant cited several judgments to support their contention, including: - United Copiex (India) Pvt. Ltd. v/s CST: Classification based on statutory definition or trade parlance. - Plasmac Machine Mfg. Co. Pvt. Ltd. v/s CCE: Classification according to popular commercial meaning. - CCE v/s Favourite Industries: Liberal construction for beneficial notification. - Rhino Machines Pvt. Ltd. v/s CCE, Vadodara: Goods assessed in the form cleared from the factory. - Share Medical Care v/s UOI: Entitlement to benefit under two different notifications. - HCL Ltd. v/s Collector of Customs, New Delhi: Option to choose between multiple exemptions. The AAR concluded these judgments were not applicable as there was no confusion regarding the classification of Maize Bran, no entitlement to dual notifications, and no pluralities of exemptions available. Ruling: The Authority ruled that the product 'Maize Bran' is correctly classified under Entry Sr.No.103A of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017, with a GST rate of 5% (2.5% SGST + 2.5% CGST).
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