2024 (3) TMI 936 - AT - Customs

Classification of goods - Nutrition/Dietary Supplements classified under Tariff item 21069099 attracts IGST at the rate of 18 % under serial No. 453 and/or 23 of Schedule III of Notification No. 1/2017- Integrated Tax (Rate) dated 28-06-2017 as claimed by the appellant or the said goods is covered under serial No. 9 of Schedule IV of the said notification which provided for IGST at the rate of 28% as claimed by the Revenue? - HELD THAT - The case of the department is that since goods are covered under Serial No. 9 the same will not fall under either Serial No. 453 or 23 of Schedule III, which is absolutely incorrect. Other than the specified goods covered under Serial No. 9 all other goods fall under Serial No. 453 and/or 23 of any chapter falls under the discerption given therein. We find that the Adjudicating Authority has not given any heed to a vital fact that discerption mentioned in serial No. 9 is only for some specific items which does not cover the goods of the present case. Therefore, the appellant s goods does not fall under Serial No. 9. Accordingly, the Serial No. 453 and/or 23 of Schedule III is the correct entry where the appellant s goods fall. Hence, the correct rate of IGST applied by the appellant i.e. 18% is correct and legal. The identical issue has been considered by this Tribunal in the case of NEUVERA WELLNESS VENTURES P. LTD. VERSUS C.C. MUNDRA 2023 (10) TMI 964 - CESTAT AHMEDABAD wherein it was held that From tariff entry of 2106, it can be seen that the entry covers various food preparation not elsewhere specified or included. However, out of the many items provided under tariff item 2106, the serial No. 9 described only some of those goods. This also establish that Serial No. 9 is not a general entry which covers entire entry of 2106 but only some of the goods which are specified in the description of goods are provided under serial no. 9 of Schedule IV,. This fact also strengthens the claim of the appellant that their goods are not covered under serial no. 9 of the schedule IV of Notification 1/2017-IGST-Rate and correctly falls under Serial No. 453 according to which the rate of IGST is 18%. The appellants have correctly declared their goods under Serial No. 453 and/or 23 of Schedule III of Notification No. 1/2017- Integrated Tax (Rate) which attracts 18% of IGST. Therefore, the impugned order is not sustainable. The impugned order is set aside. Appeal is allowed.

Summary

Issues Involved:
1. Classification of Nutrition/Dietary Supplements under IGST Notification.
2. Correct IGST rate applicable.
3. Validity of demand for differential IGST and associated penalties.

Summary:

1. Classification of Nutrition/Dietary Supplements under IGST Notification:
The primary issue for consideration was whether the appellant's goods, i.e., Nutrition/Dietary Supplements classified under Tariff item 21069099, attract IGST at the rate of 18% under serial No. 453 and/or 23 of Schedule III of Notification No. 1/2017-Integrated Tax (Rate) dated 28-06-2017, as claimed by the appellant, or under serial No. 9 of Schedule IV, which provides for IGST at the rate of 28%, as claimed by the Revenue.

2. Correct IGST rate applicable:
The appellant argued that their goods are covered under serial No. 453 and/or 23 of Schedule III, attracting 18% IGST, while the Revenue contended that the goods fall under serial No. 9 of Schedule IV, attracting 28% IGST. The Tribunal found that the description under serial No. 9 of Schedule IV covers only specific items, and the appellant's goods do not fall under this category. Therefore, the goods are correctly classified under serial No. 453 and/or 23 of Schedule III, attracting 18% IGST.

3. Validity of demand for differential IGST and associated penalties:
The Tribunal referenced a similar case (Neuvera Wellness Pvt. Ltd) and concluded that the goods in question do not fall under serial No. 9 of Schedule IV but under serial No. 453 of Schedule III. The Tribunal also found that the demand for differential IGST was time-barred, as the show cause notice was issued long after the physical assessment of the bill of entry. Consequently, the demand for differential IGST and associated penalties was not sustainable.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal and confirming that the correct IGST rate for the appellant's goods is 18% under serial No. 453 and/or 23 of Schedule III of Notification No. 1/2017-Integrated Tax (Rate). The demand for differential IGST and associated penalties was deemed unsustainable and time-barred.