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TMI Blog2021 (1) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... on the following judgements in support of their contention: (1) Determination Order dated 11.9.2007 passed by the Joint Commissioner of Commercial Tax(Law) in the case of M/s. Jay Khodiyar Agency, Rajkot wherein Fryums have been held to be falling under entry 9(2) in Schedule I to the GVAT Act as papad. (2) Determination Order dated 11.2.2011 passed by the Joint Commissioner of Commercial Tax(Law) in the case of M/s. Kansara Trading, Surat wherein Fryums have been held to be falling under entry 9(2) in Schedule I to the GVAT Act as papad. (3) Judgement dated 26.02.2015 by the Gujarat VAT Tribunal, Ahmedabad in the case of M/s. Avadh Food products v/s. State of Gujarat wherein the Honourable Tribunal has clearly held that Fryums are nothing but PAPAD and clearly fall under entry 9(2) in schedule I to the GVAT Act and hence are exempt from payment of tax. (4) Judgement dated 03.07.2015 in the case of Rectification application No.31 of 2015 by the Gujarat VAT Tribunal, Ahmedabad in the case of The State of Gujarat v/s. M/s. Avadh Food products, above. (5) Judgement dated 29.04.2016 by the Gujarat VAT Tribunal, Ahmedabad in the case of M/s. Swethin Food products v/s. State o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02/2017-Central Tax(Rate) dated 28.06.2017; that in the case of M/s. Subramani Sumathi(supra), the issue was pertaining to Unfried Fryums/Pappad, however the Entry at S.No.96 of the Notification dated 28.06.2017 speaks of Pappadam by whatever name called, except when served for consumption; that the entry makes no distinction between fried or unfried pappad and even after frying, it still retains its original character of that of a pappad; that the term "by whatever name called" would include within its sweep all types of pappad known by whatever name in the common parlance and the only category of pappad excluded by Entry at S.no.96 is when it is served for consumption; that it is a settled legal position that served for consumption means served in hotel, eating house and meant for consumption at the place itself; that reference may be made to a determination order dated 20.08.2006 in the case of M/s. Gaylord Restaurant. 3. The applicant has submitted that the order in the case of M/s. Sonal Products(supra) is also erroneous on several other counts which are discussed hereinbelow; that it is a settled legal position that a specific description shall be adopted in place of a gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore Hon'ble Supreme Court and the issue can be decided one way or the other; that however, the fact of the matter is that the aforesaid judgement has not been stayed by the Hon'ble Apex Court and therefore no authority can refuse to follow such binding judgement simply on the ground that the same is in jeopardy in view of the settled legal position; that the judgement of Hon'ble Apex Court in the case of Union of India v/s. West Coast Paper Mills ltd. (2004) 164 ELT 375 (SC) deals with issues such as execution of a suit, doctrine of merger, etc.; that it does not lay down the proposition that a judgement in jeopardy has to be ignored by the authorities; that the said judgement which is even totally distinguishable on facts could not have been thus relied upon in the case of Sonal Products(supra). 5. The applicant has further submitted that the Hon'ble Apex Court in the case of TTK Health Care limited(supra) has held that fryums are not cooked food; that the said decision has no applicability to the present case as the issue herein is not as to whether the fryums are cooked food or not but is as to whether fryums are papad or not; that the Hon'ble Karnataka High Court in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The applicant has concluded his submission by stating that under the circumstances, the only conclusion that can be drawn is if the ingredients for the manufacture of the fryums in question are maida mixed with other additives, the same shall be considered as pappad only irrespective of its shape and size and it would also make no difference as to whether the same are fried or unfried. CONTENTION-AS PER THE CONCERNED OFFICER: 7. The contentions of the concerned officer are reproduced hereunder in brief: (1) A case has been booked against the applicant for evasion of duty of Rs. 5,78,40,077/- by the CGST officers of the Rajkot Commissionerate vide AE-II Sr.No.19/2018-19 dated 31.07.2018 issued from F.No.IV/0614/CEP/2018-19 wherein it is clearly mentioned that no exemption is available to the product 'Fryums" and it is correctly classifiable under Tariff Heading No.210690 instead of 19059040 of the Goods and Services Tax code, 2017. It was detected that the applicant has misclassified the product "Fryums" under Chapter Heading/Sub-heading/Tariff item code No.19059040 vide entry No.96 of Notification No.02/2017-Central Tax(Rate) dated 28.06.2017, with intent to evade GST and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt to hoodwink the Government authority by misstatement and delay the legal proceedings against them for evasion of substantial amount of GST revenue. DISCUSSION & FINDINGS: 8. We have considered the submissions made by the applicant in their application for advance ruling as well as the arguments/discussions made by their representative Shri Apurva N.Mehta, Advocate at the time of personal hearing. We have also considered the issues involved on which Advance Ruling is sought by the applicant. 9. At the outset, we would like to state that the provisions of both the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to similar provisions of the GGST Act. 10. As per the written submission made by the applicant, the main issue involved in the case is regarding classification of "Papad" of different shapes and sizes. The applicant in his submission has tried to equate Fried Fryums with "Papad" under Tariff Item 1905 90 40. 11. It is observed that the Explanation (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... swal Agro Mills Ltd. v. Collector of Central Excise [1993 (66) E.L.T. 37 (S.C.)]. While reiterating the principle that in absence of statutory definitions, they have to be construed according to their common parlance understanding, Hon'ble Supreme Court, in the case of Commissioner of Central Excise v. Connaught Plaza Restaurant (P) Ltd. [2012 (286) E.L.T. 321 (S.C.)], has referred to various decisions on the subject and observed as follows :- Common Parlance Test : "18. Time and again, the principle of common parlance as the standard for interpreting terms in the taxing statutes, albeit subject to certain exceptions, where the statutory context runs to the contrary, has been reiterated. The application of the common parlance test is an extension of the general principle of interpretation of statutes for deciphering the mind of the law maker; "it is an attempt to discover the intention of the Legislature from the language used by it, keeping always in mind, that the language is at best an imperfect instrument for the expression of actual human thoughts." [(See Oswal Agro Mills Ltd. (supra)]." 15. It needs to be, therefore, examined whether different shapes and size of 'Fried F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Chabena which are mostly taken as a side dish. It can also be preferred to be eaten after sweetmeat. The item in question being like a Chabena is also a namkeen. The learned Collector's placing restriction that it is to be eaten only after frying and therefore, is not covered under the notification is a very strict way of reading a notification. The notification cannot be read in a way as to whittle down its expression or to make the notification otios. The words 'such as' is only illustrative and not exhaustive. So long as the item satisfies the term Namkeen, the benefit of notification cannot be denied on the ground that it requires to be fried before use. There is no such understanding placed in the notification with regard to the frying of the item. Even if that be so, then the same would apply to all other items which are namkeens like Papad, Idli-mix, Dosa-mix, Jalebi-mix etc. which are required to be fried before they can be eaten. [underlining supplied] 17. Thus, in the aforesaid decision, the product 'Fry Snack Foods called Fryums' have been considered as 'Namkeen' and not as 'Papad'. In the instant case, the applicant is manufacturing "fried Fryums" on which masala i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT has decided that the Fryums are "Namkeen". Hence in view of the above discussion, applicant's contentions are baseless and misleading because Hon'ble CEGAT has taken account of each and every aspect of the product "Fryums" and then considered the said Product "Fryums" as "Namkeen" and not "Papad". Therefore, in the applicant's case the aforesaid judgement is squarely applicable as such the applicant is engaged in the manufacture of fried Fryums and same is not like papad as claimed by the applicant. 19. In the case of Commercial Tax, Indore v. T.T.K. Health Care Ltd. [2007 (211) E.L.T. 197 (S.C.)], the issue before the Hon'ble Supreme Court was regarding tax rate of 'Fryums' under M.P. General Sales Tax Act, 1958/M.P. Commercial Tax Act, 1994. In this case, Hon'ble Apex Court observed as follows: - "12. In the present case we have quoted the definition of the term 'cooked food'. It is an inclusive definition. It includes sweets, batasha, mishri, shrikhand, rabari, doodhpak, tea and coffee but excludes ice-cream, kulfi, icecandy, cakes, pastries, biscuits, chocolates, toffees, lozenges and mawa. That the item 'cooked food' is inclusive definition which indicates by illustratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apad' even after roasting or frying are known and used as 'Papad' only whereas the fried Fryums with masala are known as "Fryums" only. Therefore, in commercial or trade parlance also, the 'fried Fryums with masala' cannot be said to be known as 'Papad'. This can be understood by visualizing the photograph of both the product i.e. "Papad" and "Fryums". PAPAD FRYUMS 21. From the above photos, it can be seen that PAPAD is a thing entirely different and distinct from FRYUMS. Therefore, in common parlance or in market, Fryums are not sold as "PAPAD". Instead "PAPAD" is sold as papad and Fryums are sold as Fryums. Both the products are different and have their individual identity. Accordingly, in common parlance test, the applicant's product i.e. "different shapes and sizes of fried Fryums" is not "Papad" but is "Fryums". 22. Further, the applicant himself has mentioned the fact in their application that they are engaged in the manufacture of fried Fryums with masala. Hence this fact indicates that applicant himself knows that in the market in common parlance their product is called Fryums and not "Papad" as such the fact is that in the market Papad is known as "Papa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that their product fried Fryums are known as "papad" is totally baseless and misleading. 25. The applicant has relied upon the judgment of Hon'ble Supreme Court in the case of Shivshakti Gold Finger wherein the Hon'ble Supreme Court examined the matter under Rajasthan Sales Tax Act, whether 'Gol Papad' manufactured out of Maida, Salt and Starch are Papad or not. It was held that size or shape is irrelevant and that Papad of all shapes and sizes are covered under the entry 'Papad'. However, in the case of Shivshakti Gold Finger, Hon'ble Supreme Court has not examined the issue of 'Fried Fryums'. Therefore, the said case is not found to be applicable in the facts of the present case. 26. The applicant has also relied upon the judgement of Hon'ble High Court of Karnataka in the case of State of Karnataka Vs. Visavamba Stores and Others, wherein the issue involved was whether the Fryums can be treated as Pappad under Entry 40 of the I Schedule to the KVAT Act. 27. The State of Karnataka has filed Special Leave Petitions (C) No. 2902329083/2013 in the Hon'ble Supreme Court against the said judgment of Hon'ble High Court of Karnataka. The Hon'ble Supreme Court has granted leave to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e all the judgements/decisions of the erstwhile laws do not appear to be applicable in the case of the applicant. Therefore, the 'Fried Fryums' are not classifiable as 'Papad' under Tariff Item 1905 90 40. 29. The next issue which arises for consideration is appropriate classification of 'Fried Fryums'. Chapter Heading 2106 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) reads as under :- HS Code Description of goods Unit (1) (2) (3) 2106 Food preparations not elsewhere specified or included 2106 10 00 - Protein concentrates and textured protein substances kg. 2106 90 - Other : --- Soft drink concentrates : 2106 90 11 ---- Sharbat kg. 2106 90 19 ---- Other kg. 2106 90 20 --- Pan masala kg. 2106 90 30 --- Betel nut product known as "Supari" kg. 2106 90 40 --- Sugar-syrups containing added flavouring or colouring matter, not elsewhere specified or included; lactose syrup; glucose syrup and malto dextrin syrup kg. 2106 90 50 --- Compound preparations for making nonalcoholic beverages kg. 2106 90 60 --- Food flavouring material kg. 2106 90 70 --- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the heading 1905 is the legal principle of Ejusdem Generis. The application of this Rule is necessitated because of the use of a general phrase preceded by specific words. The words 'ejusdem generis' means 'of the same kind or nature'. Ejusdem generis is a rule of interpretation that where a class of things is followed by general wording that is not itself expansive, the general wording is usually restricted things of the same type as the listed items. The principle of ejusdem generis is applicable in interpreting the CTH No.1905 whereby the phrase 'by whatever name it is known", should be read in conjunction with the terms 'Papad' and hence the scope of the term "Papad" would get limited to only such word which is similar to Papad or such class of individuals. In the instant case, the applicant's goods fried Fryums is not similar to Papad or such class of Individuals. 33. The Punjab and Haryana High Court in the case of CIT v. Rani Tara Devi [2013] 355 ITR 457 (P & H) held as below: "The expression 'by any other name' appearing in Item (a) of clause (iii) of Section 2 (14) of the Income Tax Act has to be read ejusdem generis with the earlier expressions i.e. municipal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pad of different shapes and not in respect of Fryums and hence not applicable - Since Heading 2106 ibid covers all kind of edible preparations not elsewhere specified and items and processes specifically mentioned therein are only illustrative, Fried Fryums are appropriately classifiable under Tariff Item 2106 90 99 ibid - Said goods chargeable to GST @ 18% (9% CGST + 9% SGST) - Section 9 of Central Goods and Services Tax Act, 2017" [paras 7.8, 7.9, 7.10, 7.11, 7.12, 7.14] (ii) Gujarat Advance Authority in case of M/s. Sonal Product G {Advance Ruling No. GUJ/GAAR/R/2019/03, dated 22-2-2019} has held that, "Papad and Papad Pipes - Classification of - Products commonly known as unfried Fryums having different shape, sizes and varieties and made from raw materials such as maida floor, starch powder, rice powder, poha, salt, soda bycarb, baking powder, food colour, water and plastic bags for packing - Word 'Papad' not defined either under Customs Tariff or under Central Goods and Services Tax Act, 2017/Gujarat Goods and Services Tax Act, 2017/Integrated Goods and Services Tax Act, 2017 or Notifications issued thereunder, therefore, its meaning to be construed in its popular sense a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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