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2021 (12) TMI 268 - AAR - GSTClassification of goods - Epoxidised Soya bean Oil - to be classified under tariff item 1518 of Schedule-I (taxable at 5%) or Schedule-II (taxable at 12%) of Notification No. 1/2017-Central Tax (Rate) dated June 28, 2017, as amended from time to time? - HELD THAT - The product Epoxidised soyabean oil is chemically modified (epoxidised) oil. The chemical modification is such that its double bond - the Epoxidised Soyabean Oil is covered under the above chapter heading 1518. In case of COMMISSIONER OF CENTRAL EXCISE, SURAT-II VERSUS CONSUMER PLASTICS PVT. LTD. 2005 (10) TMI 321 - CESTAT, MUMBAI , the Tribunal held that the Epoxidised vegetable Oil used as plasticisers or stabilisers in plastic industry, classifiable under Chapter 15 of Central Excise Tariff and not under Heading 38.12 ibid. Whether the product Epoxidised soyabean oil is covered under the Schedule-I or Schedule-II of Notification No.01/2017-CT dated 28.06.2017? - HELD THAT - The product Epoxidised Soya bean Oil is mainly manufactured from the raw material refined soyabean Oil which is a vegetable Oil and the said product obtained by treating vegetable oil by reaction in the presence of catalyst and in other words it can be said that the product is chemically modified vegetable Oil. On going through the description of goods mentioned above in Entry No.90 i.e. 'Vegetable fats and Oils oxidized by heat in vacuum or inert gas or otherwise chemically modified which covered the Epoxidised Soya Oil. Hence, the said Epoxidised soyabean oil obtained by oxidized by heat in vacuum or chemically modified oil is rightly fits/covered under the said entry No.90. On. the similar issue, in case of IN RE AGARWAL INDUSTRIES PVT. LTD. 2018 (9) TMI 973 - AUTHORITY FOR ADVANCE RULING - ANDHRA PRADESH it was observed that since the product under question is manufactured out of Vegetable fats/ oils and not from animal fats/ oils, therefore, the correct HSN Code of Energy-G premium Oil is HSN 1518 vide S. No. 90 of Schedule I of Notification dated 28-6-2017 and the applicable rate of tax is 5%. The Deputy Commissioner, Registrar, AAR, Andhra Pradesh informed that no appeal has been filed against the abovesaid order of AAR - It is found that in this case also the Epoxidised Soyabean Oil is manufactured from Soyabean refined Oil i.e. vegetable oil not from the animal fats/Oils. Hence the above order is applicable in this case also. The product epoxidized Soya Oil is a chemically modified soyabean oil and falls under chapter heading no.1518 and specifically covered under entry no.90 of Schedule-I of Notification No.01/2017 dated 28.06.2017.
Issues Involved:
1. Classification of Epoxidised Soyabean Oil under GST. 2. Determination of applicable GST rate for Epoxidised Soyabean Oil. Issue-wise Detailed Analysis: 1. Classification of Epoxidised Soyabean Oil under GST: The applicant, a manufacturer of Epoxidised Soyabean Oil (ESO), sought to classify the product under the appropriate tariff heading. The applicant argued that ESO, being a chemically modified vegetable oil, should be classified under Chapter Heading 1518 of the Customs Tariff Act (CTA), which aligns with the Harmonized System of Nomenclature (HSN). The manufacturing process involves oxidizing refined soyabean oil using hydrogen peroxide and a catalyst, resulting in a product that retains its fundamental structure and physical appearance. The applicant supported their claim with HSN explanatory notes, which include epoxidised oils under Chapter Heading 1518, and judicial precedents from the Supreme Court emphasizing the alignment of the Indian tariff with HSN. The applicant also referenced Advance Rulings and judicial decisions that supported the classification of similar products under Chapter Heading 1518. The applicant's additional submissions and laboratory reports confirmed that ESO is a chemically modified vegetable oil, further justifying its classification under Chapter Heading 1518. The authority reviewed the manufacturing process and the chemical properties of ESO, concluding that it fits the description under Chapter Heading 1518, which covers chemically modified vegetable oils. 2. Determination of Applicable GST Rate for Epoxidised Soyabean Oil: The applicant contended that ESO should be taxed at 5% GST under Entry No. 90 of Schedule I of Notification No. 1/2017-Central Tax (Rate), which covers vegetable fats and oils that are chemically modified. The applicant argued that the specific entry for chemically modified vegetable oils should prevail over the general entry for inedible mixtures or preparations of fats or oils under Entry No. 27 of Schedule II, which attracts a 12% GST rate. The applicant cited Rule 3(a) of the General Rules of Interpretation, which prefers the most specific description over general descriptions. They also referenced judicial precedents supporting the adoption of more beneficial classifications for the assessee. The concerned officer initially suggested that ESO should be classified under Entry No. 27 of Schedule II, attracting 12% GST. However, the authority found that Entry No. 27 covers products not specified elsewhere, while ESO is specifically included under Entry No. 90 of Schedule I. The authority also considered an Advance Ruling from Andhra Pradesh, which classified a similar product under Entry No. 90 of Schedule I, attracting 5% GST. They noted that other manufacturers and importers of ESO in India also classify the product under Chapter Heading 1518 and pay 5% GST. Based on the detailed analysis and supporting evidence, the authority ruled that ESO is correctly classifiable under tariff item 1518 and is subject to 5% GST under Entry No. 90 of Schedule I of Notification No. 1/2017-Central Tax (Rate). Ruling: 1. Classification: Epoxidised Soyabean Oil is rightly classifiable under tariff item 1518. 2. GST Rate: GST at 5% is leviable as the product is specifically covered under Entry No. 90 of Schedule I of Notification No. 1/2017-Central Tax (Rate). This ruling is valid subject to the provisions under section 103(2) until and unless declared void under Section 104(1) of the GST Act.
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