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2022 (3) TMI 624 - AAAR - GSTClassification of goods - rate of tax - NAMKEENS or not - Jack Fruit Chips and Banana Chips (salted and masala varieties) made out of raw as well as ripe banana and sold without brand name - roasted and salted/ salted /roasted preparations such as of Ground-nuts, Cashew nut and other seeds, sold without a brand name - covered by HSN Code 2106.90.99 and taxable under Entry 101 A of Schedule of Central Tax (Rate) Notification 1 of 2017 or not - HELD THAT - From plain reading of the contents of chapter 21, it reveals that it includes the food preparations which are not elsewhere specified in the customs tariff. Those food preparations not specified or included elsewhere in the tariff being preparations for use either directly or after processing for human consumption are to be classified under this heading 2106. Further the heading 2106 specifically excludes the preparations made from fruit, nuts or other edible parts of plants of heading20.08, provided that the essential character of the preparations is given by Such fruit, nuts or other edible parts of plants. Therefore, it is evident that the entry 2106.90 is a residuary entry in respect of edible preparations and hence the edible preparations shall be classified under this entry only if the same are not classifiable under any of the other specific entries for edible preparations. It is noticed that as per chapter note 1(a) to chapter 20, the chapter does not cover vegetables, fruits or nuts prepared or preserved by the processes specified in chapter 7, 8 or 11. It means that these items not being processed or preserved by the said processes shall be covered in chapter 20. The processes specified in chapter, 7, 8 or 11 are freeing, steaming, boiling, drying, provisionally preserving and milling. Chapter heading 2008 covers roasted, salted or roasted nuts and fruits such as ground nuts, cashew nuts, other seeds and nuts and these are specifically covered under said heading vide sl. No. 40 of schedule II to notification No. 1/2017-CT (rate). Hence there remains no doubt that the roasted/salted/roasted and salted ground nuts, cashew nuts and other seeds/nuts shall be appropriately classifiable under heading 2008 of customs tariff. Even otherwise also, heading 2106.90 being a residuary heading shall not stand against a specific heading 2008 as per Rules of interpretation of the tariff. Banana chips - tapioca chips - potato chips - jackfruit chips - sharkara varatty - HELD THAT - By applying the rules for interpretation of the tariff, specially rule 1, 2 and 3 of the same, it is evident that the impugned goods are appropriately classifiable under heading 2008 and not under heading 2106. Rule 2(a) provides that any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance - Further, chapter 21 covers Miscellaneous edible preparations, whereas chapter 20 specifically covers Preparations of vegetables, fruits, nuts or other parts of plants. Hence, when there is a specific entry providing for the most specific description in the heading 2008 to the impugned products over the residuary heading description of heading 2106.90, the said impugned goods is held appropriately classifiable under heading 2008, by virtue of rule 3(a) of the rules for interpretation. In view of clear provisions in GST laws for interpretation of tariff, the contention of the appellant regarding common parlance understanding of a goods does not hold water, as is therefore rejected. Thus, all the other contentions of the appellant are rejected being not tenable and impugned goods viz. Jackfruit Chips, Banana Chips, Tapoica Chips, Potato Chips, Chembu Chips and Pavakka Chips (Bittergourd) (Whether salted/ masala or otherwise) are held classifiable under Tariff Heading 2008 19 40 of the Customs Tariff Act, 1975 - Regarding classification of roasted/salted/roasted and salted Cashew nuts, Ground nuts, and other nuts, there are specific headings under Chapter 20 that covers the products. Accordingly, roasted /salted / roasted and salted Cashew nuts are held classifiable under Tariff Heading 2008 19 10, and other roasted/ salted / roasted and salted nuts and seeds are classifiable under 2008 19 20 of the Customs Tariff Act, 1975.
Issues Involved:
1. Classification of Jackfruit Chips, Banana Chips, Tapioca Chips, Potato Chips, Chembu Chips, Pavakka Chips, and Sharkaraivaratty. 2. GST rate applicable to the above products. 3. Classification of roasted/salted/roasted and salted preparations of Ground nuts, Cashew nuts, and other seeds. 4. Applicability of HSN Code 2106.90.99 for the above products. Issue-wise Detailed Analysis: 1. Classification of Chips and Sharkaraivaratty: The appellant argued that Jackfruit Chips, Banana Chips, Tapioca Chips, Potato Chips, Chembu Chips, Pavakka Chips, and Sharkaraivaratty should be classified under HSN 2106.90.99 as "Namkeens" or "Sweetmeats" and taxed at 5% GST under Entry 101A of Schedule I of Notification No. 1/2017. The appellant relied on Supplementary Note No. 6 of Chapter 21, which includes products commonly known as "Namkeens" and "Sweetmeats" under HSN 2106.90.99. However, the Appellate Authority upheld the classification under HSN 2008.19.40, as these products are essentially prepared or preserved fruits and vegetables, falling under Chapter 20, which covers preparations of vegetables, fruits, nuts, or other parts of plants. The authority emphasized that the essential character of the fruits or vegetables remains unchanged after processing, and thus they are appropriately classifiable under heading 2008. 2. GST Rate Applicable to Chips and Sharkaraivaratty: The Appellate Authority confirmed that products classified under HSN 2008.19.40 attract a GST rate of 12% (6% CGST + 6% SGST) as per Entry 40 of Schedule II of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. This decision was based on the specific inclusion of such products under Chapter 20 of the Customs Tariff Act. 3. Classification of Roasted/Salted Preparations of Nuts and Seeds: The appellant contended that roasted and salted/salted/roasted preparations of Ground nuts, Cashew nuts, and other seeds should be classified under HSN 2106.90.99 as "Namkeens" and taxed at 5% GST. However, the Appellate Authority held that these products are specifically covered under Chapter 20, with roasted/salted cashew nuts classified under HSN 2008.19.10 and other roasted/salted nuts and seeds under HSN 2008.19.20. These classifications attract a GST rate of 12% (6% CGST + 6% SGST) as per Entry 40 of Schedule II of Notification No. 01/2017 Central Tax (Rate). 4. Applicability of HSN Code 2106.90.99: The appellant's reliance on HSN 2106.90.99 was rejected by the authority, which emphasized that HSN 2106 is a residuary entry for food preparations not elsewhere specified or included. Since the products in question are specifically covered under Chapter 20, they cannot be classified under the residuary entry of HSN 2106. The authority applied the rules for interpretation of the Customs Tariff, particularly Rule 1, 2, and 3, which prioritize specific headings over general or residuary ones. Conclusion: The Appellate Authority upheld the Advance Ruling No. KER/115/2021 dated 26/05/2021, confirming the classification of the impugned products under various headings of Chapter 20 and the applicable GST rate of 12%. The appeal filed by the appellant was rejected, and the products were not classified under HSN 2106.90.99 as "Namkeens" or "Sweetmeats."
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