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TMI Blog2018 (10) TMI 1623X X X X Extracts X X X X X X X X Extracts X X X X ..... lavoured or containing added fruit or cocoa. Now while chapter head 0401 to 0406 are meant for natural dairy products viz. Milk, Cheese, Butter Milk, Butter, Whey etc. and other products made out of such items, the product in question i.e. Militry Malai Mithai contains Skimmed Milk Powder, Whey Powder, Sugar, Emulsifiers etc. as predominant ingredients, which would not make it entitles to be classified as a product of natural milk constituents as has been pleaded by the Applicant. By no stretch of imagination, the product in question can be brought under the ambit of Chpater 04 of the HSN - classification of the impugned product under Chapter 04 of the I-ISN is ruled out. Fitment of impugned product under Chapter 1704 - Held that:- The product ‘Militry Malai Mithai’ cannot be terms as ‘Chewing Gum’ (1704 10 00) or Jelly Confectionery (1704 90 10) or Boiled Sweet (1704 90 20) or Toffee, caramel etc (1704 90 30). Clearly the product is neither a gum nor boiled sweet nor toffee or caramel. That leaves residual entry ‘Others’ (1704 90 90) if at all the impugned product is to brought under the purview of Chapter 17. In other words, there is no specific entry under Chapter 17 which wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o GST at applicable rate under the said tariff entry, presently read with Notification No.01/2017-Central Tax (Rate) dtd.28.06.2017 (Sr. No. 101 to Schedule l) and corresponding notification under MPGST Act,2017. - Order No. 13/2018 and Case No. 09/2018 - - - Dated:- 18-9-2018 - RAJIV AGRAWAL AND MANOJ KUMAR CHOUBEY MEMBER Present on behalf of applicant: Shree Ajay Makhija, Director CA Pradeep Asawa And CA Palkesh Asawa PROCEEDINGS 1. BRIEF FACTS OF THE CASE: 1.1. M/S. Italian Edibles Pvt. Ltd. Indore [hereinafter referred to as the Applicant] is engaged in the manufacture, supply and export of confectionary and dairy/ sweet product. The applicant manufactures various product including flavoured wafers, Milk chocolates, Milk compound chocolates and other dairy / sweet products. The applicant is having a GST registration with GSTIN 23AACC12746N1ZG. 1.2. Further, the applicant is also engaged in the manufacture of an edible product under the brand name Militry Malai Mithai , which is, as per Applicant, identically known as Rabdi , and recognised as a Mithai or Misthan by the common parlance.it contains the following ingredients: i. Sugar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sweet and is most likely to be a sweet meat. 5. We are also marketing the said product as Mithai. That he name of the product itself is Militry Malai Mithai which is recognised in the market as such. We submit that packing the said product in such small sachets is useful in consuming the product in small quantities, which would be helpful for consumption of the product by children or other people casually. 6. Further, the CBEC, vide its FAQ on classification dated 29.09.2017, clarified that products like halwa, barfi (i.e. Khoa product), laddus, falling under HS Code 2106 are sweet meats and attract 5% GST. We submit that the Board has listed certain commonly known sweets which are similar to them. We submit that our product i.e. Rabdi, is also in the same class as those which are covered by the CBEC circular, and hence should be classified as sweet meat. B. Chapter 21 specifically includes sweet meats as per Chapter Note 5 - 7. As per chapter note 6 of chapter 21 of the GST tariff in India , Tariff item 2106 90 99 includes sweet meats commonly known as misthan or mithai or called by any other name. They also include products commonly known as Namkeens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sugar. D. The said product cannot be classified as a confectionery item - 16. We submit that at present, due to uncertainty and doubt, we are selling the aforementioned product as a sugar confectionery i.e. after paying GST at a higher rate of 18% to avoind any future tax burden on us. Without clarification if we charge a lower rate, we not be able to pass on any unforeseen future tax liability to our consumers since our product is a retail product 17. However we are of a firm opinion that our product is not a sugar confectionery. That the HSN code for sugar confectionery items i.e. heading number 1704 covers Sugar Confectionery (including white chocolate), not containing cocoa . 18. We submit that heading 1704 covers confectionery . That confectionery is a preparation in the form of candies or preserves. Confectionery means products such as candies or other flavoured sweets which are marketed as toffees. That our product is not a confectionery since we are not marketing the same in the form of candy or a toffee. 19. We further that boiled sweets in heading 1704 90 20 includes toffees. Boiled sweets are prepared using sugar syrups that are heated and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n our product @18% would be against the trade interest and not viable for business. 1.6. In view of above, the Applicant has filed the instant application seeking clarification on classification of their product marketed under the brand name Militry Malai Mithai . 2. QUESTIONS RAISED BEFORE THE AUTHORITY: The following questions have been posted before the Authority : Whether the product having brand name Militry Malai Mithai , manufactured and supplied by the applicant containing the ingredients Sugar, Vegetable Fat, Skimmed Milk Powder, Whey Powder, Emulsifier and other permitted Flavours, which is identical to the commonly known Indian sweet Rabdi , should be classified under the Tariff Heading 2106 as Sweet Meats or under Tariff Heading 0404 as other dairy product consisting of natural milk constituents or under the Tariff Heading 1704 as a Sugar confectionery.? 3. DEAPRTMENT S VIEW POINT: The CGST Central Excise Commisionerate has furnished its opinion through the Joint Commissioner, CGST Central Excise, Indore. The department has merely opined that since the Applicant had been classifying the impugned product under Chapter Head 1704 as Confecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared by the Applicant before respective authorities. We thus do not find these reports/certificates of much help for arriving at the correct classification of the impugned product particularly for taxation purpose. 5.4. We have also considered the opinion of the department which is nothing but the reiteration of the existing position regarding classification of impugned product, as has already been admitted and narrated by the Applicant in the application. Thus we do not find the departmental opinion of any help as it does not throw any light on the merits of the issue and merely reiterates the existing position and recommends staus quo. However, we would not let ourselves be prejudiced with either the prevailing position or the insufficient information available from the documents available before us. 5.5. We find that the Applicant has vehemently opposed classification of the impugned product under Chapter 1704, the heading under which they are supplying the product at present. On a closure look we sense that the Applicant s reservations against Chapter Head 1704 are driven, among other things, by financial grounds. Because, against Chapter Head 1704 they would have to coug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectionery has been classified as under: 1704 Sugar Confectionery (Including white chocolate), not containing cocoa 1704 10 00 - Chewing Gum, whether or not sugar coated 1704 90 - Other: 1704 90 10 --- Jelly Confectionery 1704 90 20 --- Boiled Sweets, whether or not filled 1704 90 30 --- Toffees, Caramels and similar sweets 1704 90 90 --- Others 5.9. Now, putting the impugned product to test against each of the entries above, we find that the product Militry Malai Mithai cannot be terms as Chewing Gum (1704 10 00) or Jelly Confectionery (1704 90 10) or Boiled Sweet (1704 90 20) or Toffee, caramel etc (1704 90 30). Clearly the product is neither a gum nor boiled sweet nor toffee or caramel. That leaves residual entry Others (1704 90 90) if at all the impugned product is to brought under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chapter is decided, a careful examination of different entries under Chapter 21, the quest for appropriate classification rests finally at 2106 90 99, the residual entry, as the product itself does not find specific place anywhere else in the Chapter 21. We thus conclude that the impugned product viz. Militry Malai Mithai would merit classification as Miscellaneous Edible Product under Chapter Heading 2106 90 99, as Sweetmeat and chargeable to GST as applicable. 5.12. Having observed as above, we further hold that the impugned goods shall be aptly classifiable under Chapter Head 2106 90 99 as Sweetmeats and shall be entitled to benefit of Notification No.01/2017-Central Tax (Rate) dtd.28.06.2017 (as amended) and corresponding notification under MPGST Act,2017 at present attracting GST @5% Adv. [(2.5% CGST + 2.5% SGST) or 5% IGST as the case may be) as envisaged under Serial Number 101 Schedule I to the said Notification. 5.13. We also find it necessary to mention here that the classification decided by this Ruling shall be effective prospectively and this ruling shall not entail any right of the Applicant to claim refund of any tax which they may have paid prior to thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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