9911796707
TMI Blog2021 (1) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, the Applicant seeks Advance Ruling on the following questions : (i) Whether any tax is payable in respect of sale /supply of Fryums manufactured by the applicant? And if the answer is in affirmative, the rate of tax thereof? Applicant's interpretation of law : 4. The applicant submitted that it is settled legal position that Fryums are Papad. Since Papad is exempt as per entry at Sr. No. 96 of Tariff item No. 1905 of Not No. 02/2017-CT (rate) dated 28.06.2017, the Fryums manufactured and sold / supplied by the applicant would also be exempt from payment of tax. 5. The applicant has placed reliance on the following judgements of VAT era. Honourable GVAT Tribunal in the case of M/s. Avadh Food Products Vs. State of Gujarat -First Appeal No.1/2015 read with Rectification Application No.31/2015 in First Appeal No.1/2015 Dt;-03/07/2015 reported in 2015 GSTB -II -405 and in the case of M/s. Swethin Food Products Vs. State of Gujarat -2016 GSTB -I 296, Honourable Karnataka High Court in the case of State of Karnataka Vs. Vasavamba Stores -[2013] 60 VST 19 (Karn.)and Honourable Supreme Court in the case of Shiv Shakti Gold Finger Vs. Assisstant Commissioner, Commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a resort can be made to the heading 2106 given at Sr. No. 23 of Schedule III of Not. No. 01/2017-Ct (rate) dated 28.06.2017 which is general in nature as it includes food preparations not elsewhere specified or included. Several determining authorities, Honble GVAT Tribunal, Hon'ble Karnatak High Court and Hon'ble Supremee Court of India had an occasion to consider this issue and as all the authorities and Hon'ble Courts have ultimately come to a conclusion that Fryums are papad. The determination orders and judgements have not been reversed by any authority and Court and therefore it has a binding force. The applicant further submitted that whether the relied upon judgements have considered the Customs Tariff Act, 1975 or not is hardly relevant as it is plain interpretation that Fryums are papad. Even if law is amended or new law is enacted, the said interpretation will still hold the field since the Entry No. 96 of Papad is retained. The product under the earlier law would not become something else simply because there is a new law in place. 8. The applicant submitted that Hon'ble Karnataka High Court in the case of State of Karnataka Vasavamba Stores [ (2010) 60VST 19 (Kar)] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hape consisting of all the ingredients whether it is pulses, rice, maida etc. 11. The applicant further submittted that the decision of Hon'ble CEGAT in the case of TTK Pharma Ltd. [1993] 63 ELT 446 (Tribunal) relied upon in the case of Sonal Products (supra) wherein it has been held that Fryums put up in unit containers and ordinarily intended for sale are classifiable under sub-heading 2107.91 as a namkeen. The said judgement of Hon'ble CEGAT has no applicability for several reasons. One, it is with respect to the interpretation of sub-heading 2107. Which no longer forms part of the tariff and hence the goods falling therein have been included elsewhere including heading 1905 which covers "papad". Secondly, it is with respect to interpretation of an exemption notification which referred to the goods falling under 2107 which is not the issue at hand. Lastly, the present issue is concerning the interpretation of the term "papad" and whether the same requires further frying or not and hence whether the same is "namkeen" or not as was the issue in the said judgement. 12. The applicant also submitted that the Hon'ble Apex Court in the case of Ponds India Ltd. Vs. Commissioner of Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification." 18. What is 'Papad' has not been defined or clarified under Customs Tariff Act, 1975, the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the 'CGST Act, 2017), the Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as the 'GGST Act, 2017'), Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the IGST Act, 2017 or the Notifications issued under the CGST Act, 2017/GGST Act, 2017/IGST Act, 2017. 18.1 It is now well settled principle of interpretation of statute that the word not defined in the statute must be construed in its popular sense, meaning 'that sense which people conversant with the subject matter with which the statute is dealing would attribute to it'. It is to be construed as understood in common language ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise regime was examined by the Hon'ble Customs, Excise and Gold Appellate Tribunal (CEGAT, as it was known then) in the case of T.T.K. Pharma Ltd. v. Collector of Central Excise [1993 (63) E.L.T. 446 (Tribunal)]. In this case, the Hon'ble Tribunal, inter alia, observed as follows:- 6. A reading of these sub-headings makes it clear that the product is not a Prasad or Prasadam, Sterilised or pasteurised miltone. Therefore, it will not come within the sub-headings 2107.10 or 2107.20. As the item is not put in a unit container and ordinarily intended for sale, it will not come within the Heading 2107.91. Therefore, the product has to be brought under the residuary sub-heading 2107.99 as 'Other' carrying nil rate of duty. As we have classified the product under the residuary product under the heading "Edible preparations not elsewhere specified or included which carries nil rate of duty, the question of raising any demand or of Excise duty may not arise. However, as arguments have been adduced with regard to the Notification No. 12/90, dated 20-3-1990, it would be proper for us to give finding in regard to the same. 7. ...... 8 ......... The Sl. No. 8 reproduced above m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant product can be equated with "Namkeen" and not with Papad. 20.2 The applicant has contended that the above judgement has no applicability for following reasons that, it is in respect of interpretation of sub-heading 2107 which is no longer forms part of tariff; that it is with interpretation of exemption Notification which referred to the goods falling under 2107 and the present issue is concerning the interpretation of the term "papad" and not whether the same requires further frying or not. The applicant said arguments are not tenable as such applicant is interpreting the aforesaid judgement as per their convenience because in the said case Hon'ble CEGAT was to decide whether the said Product i.e. "Fryums" can be equate with Namkeen or not so that assessee can get benefit the exemption from payment of duty. The assessee (M/s. TTK Pharma) in the case had claimed that their product "Fryums" is a Namkeen and not claimed as "Papad" where as in the exemption entry "Papad, Idli-Mix, Vada-Mix, Dosa-Mix, Jalebi-Mix, Gulabjamun-Mix or Namkeens such as Bhujia, Chabena" both the product i.e. "Papad" and "Namkeen" were exempted. The assessee (M/s. TTK Pharma) emphasised that his pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... semi-food. There is also no doubt that in the case of 'fryums' a further cooking process was required. It is not in dispute that the 'fryums' came in plastic bags. These 'fryums' were required to be fried depending on the taste of the consumer. In the circumstances we are of the view that 'fryums' were like seviyan. 'Fryums' were required to be fried in edible oil. That oil had to be heated. There was certain process required to be applied before 'fryums' become consumable. In these circumstances the item 'fryums' in the present case will not fall within the term 'cooked food' under Item 2 Part I of Schedule II to the 1994 Act. It will fall under the residuary item "all other goods not included in any part of Schedule I". [underlining supplied] 21.1 In this case, Hon'ble Supreme Court was of the view that 'fryums' were like 'seviyan'. 22. The applicant in their application has submitted that such 'different shapes and sizes Fryums are fried and masala powder is added. This is a fact that when a person goes in the shop for purchase of Papad, shopkeeper shows him different types of Papad like 'Moong dal Papad' 'Udad dal Papad', 'Chaval ke Papad' etc. but shopkeeper never shows dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng unfinished or semi-finished product which is not ready to eat but can be consumed only after being fried by ultimate consumer, is specifically classifiable as 'papad' under Tariff Item 1905 05 40 of GST Tariff which is exempt from CGST/SGST vide Sl. No. 96 of Notification No. 2/2017-C.T. (Rate) as amended and Notification No. II(2)/CTR/532 (d-5)/2017 vide G.O. (Ms) No. 63." In the said Ruling the Advance Authority was to decide the classification of "Papad" made from "Maida" i.e. fine wheat flour and not the classification of "Fryums". Accordingly, the facts of the said Ruling of the Advance Authority are totally different. Therefore, the said Ruling of Advance Authority is not applicable in the applicant case. Further, as per Section 103 of the CGST Act, 2017 any Advance Ruling is binding on the Applicant who has sought it and on the concerned officer or the jurisdictional officer in respect of the Applicant. Accordingly, AARs Ruling as cited above can't be relied upon in the present case of the Appellant. 24. Further it is state that the main ingredient of their product i.e. so called Papad of different shapes and sizes i.e. "Fryums" is wheat flour, superfine wheat flour, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36 of the Constitution of India confers a special power upon this Court in terms whereof an appeal shall lie against any order passed by a Court or Tribunal. Once a Special Leave is granted and the appeal is admitted the correctness or otherwise of the judgment of the Tribunal becomes wide open. In such an appeal, the court is entitled to go into both questions of fact as well as law. In such an event the correctness of the judgment is in jeopardy. .......... .......... 38. In the aforementioned cases, this Court failed to take into consideration that once an appeal is filed before this Court and the same is entertained, the judgment of the High Court or the Tribunal is in jeopardy. The subject matter of the lis unless determined by the last Court, cannot be said to have attained finality. Grant of stay of operation of the judgment may not be of much relevance once this Court grants special leave and decides to hear the matter on merit. 27. The applicant has placed reliance on following case laws of VAT regime: (i) M/s. Avadh Food Products Vs. State of Gujarat and M/s. Swethin Food Products Vs. State of Gujarat. These case laws are not applicable in the instant case beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption; (c) ...... (d) ...... (e) ...... (f) ...... (g) ...... (h) ...... (i) ...... 6. Tariff item 2106 90 99 includes sweet meats commonly known as "Misthans" or "Mithai" or called by any other name. They also include products commonly known as "Namkeens", "Mixtures", "Bhujia", "Chabena" or called by any other name. Such products remain classified in these sub-headings irrespective of the nature of their ingredients." 28.4 Thus, Heading 2106 is an omnibus heading covering all kind of edible preparations, not elsewhere specified or included. Chapter Note 5 provides an inclusive definition of this heading and covers preparations for use either directly or after processing, for human consumption. In 5(b) above preparation for use after processing has been included and mentioned therein such as cooking, dissolving or boiling in water, milk or other liquids. Obviously, the term 'such as' is purely illustrative but not exhaustive and therefore processing includes frying also, hence fried goods are also covered under ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 905 of Custom tariff Act, 1975. 30. Taking all these aspects into consideration, we hold that the product 'different shapes and sizes "fried Fryums' is appropriately classifiable under Tariff Item 2106 90 99. 31. Sl. No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017, as amended vide Notification No. 41/2017-Central Tax (Rate), dated 14-11-2017 issued under the CGST Act, 2017 and corresponding Notification No. 1/2017-State Tax (Rate), dated 30-6-2017, as amended, issued under the GGST Act, 2017 covers "Food preparations not elsewhere specified or included [other than roasted gram, sweetmeats, batters including idli/dosa batter, namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, khakhra, chutney powder, diabetic foods]" falling under Heading 2106. Therefore, Goods and Services Tax rate of 18% (CGST 9% + GGST 9% or IGST 18%) is applicable to the product 'fried Fryums' as per Sl. No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017, as amended, issued under the CGST Act, 2017 and Notification No. 1/2017-State Tax (Rate), dated 30-6-2017, as amended, issued under the GGS ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
