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TMI Blog2021 (1) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... red. 3. The Papad turns out to be a papad when the dough is moulded and given the shape, usually a palm size round or may be smaller or bigger. However, with changing of time and considering the different demands of different class of consumers innovations are made in shapes and sizes also and now Papad comes in different shapes and sizes. It does not require any extra effort to do the same i.e. change the shape and size of a Papad. The dough remains the same with minor variations in proportions of ingredient and the dough is moulded in the desired shapes and size may be round, may be square, may be semi-circle, may be hollow circle with bars in between or may be square with bars in between intersecting each other or may be of shape of any instrument, equipment, vehicle, aircraft, animal etc. The shape may vary, the size may vary but the ingredients, the proportion of ingredients, the composition and the recipe remains similar, if not exactly the same. 4. The applicant further submitted that they do not sell the Papad of different shapes and sizes manufactured by it in ready to eat condition. The applicant manufactures Papad of different shape and size, which remains in an un-coo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elp in meeting with the market demand of manufacturing and supplying of Papads of different shapes and sizes. 6.5 The applicant further submitted that today PAPAD does not resemble the same age old traditional round shaped papad. Today, due to huge change in market trend, huge change in the taste buds of the masses and huge change in the technology, the manufactures like applicant are able to bring the some changes in shapes and sizes of traditional papad and the same is accepted and appreciated in the market. Due to advancement of the technology, it has become possible to bring change/ modification in the mind-set of the people also that now PAPAD does not resemble the traditional round shape but now Papad can be in any desired shape and size. Considering the same, the rules of viewing a product and interpretation about its classification also need to be modified and upgraded with the overall advancement of commercial scenario. 6.6 The applicant has referred a few judicial pronouncements wherein Hon'ble Courts including Hon'ble Supreme Court have resorted to encouragement of development of principles of interpretation according to the changing scenario. 6.6.1 In the case of Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the country e.g. PAPAD, PAPAD, PAPPADAM, ALAM, KHICHIYA, etc. Similarly, the modern day PAPAD with different shapes and sizes is also known and recognised by different nomenclature in different parts of the country keeping in mind the shape and size thereof e.g. PAPAD, FRYUMS, BHUNGLA, NADDA, GONGO, PONGA, GOLD FINGER, WHITE FINGER, FINGER, NALI, etc. The applicant further submitted that keeping in mind this diversity in the different nomenclature given to same commodity in different parts of the country and to avoid confusions and probable litigation, the entry relating to PAPAD has been deliberately worded as "PAPAD, BY WHATEVER NAME IT OS KNOWN" and not as only "PAPAD". 6.9 The applicant has referred the order passed by the Authority for Advance Ruling, Tamilnadu in the case of Subramani Sumathi- Order No. 07/AAR/2019 dtd. 22/01/2019 wherein the issue of classification of PAPAD made of maida was for consideration before Advance Ruling Authority and it has been held therein that the product in question was eligible to be classified as PAPAD under Tariff Heading 19050540. 6.10 The applicant further submitted that the issue as to whether PAPAD of different shapes and sizes an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant and subject to verification, Honourable Supreme Court has neither granted any stay on operation and execution of the decision of Honourable Karnataka High Court and as per settled legal position, till a judgment is stayed or reversed, it is the authority prevailing and the judicial discipline demands that the said judgment be honoured and followed. The applicant would like to place reliance upon the observation made by the Honourable Supreme Court in the case of Collector of Customs, Bombay Vs. Krishna Sales (P) Ltd. - AIR 1994 SC 1239 wherein Hon'ble Supreme Court has observed that - Mere filing of appeal does not operate as a stay or suspension of the order appealed against. 6.13 On the issue of classification and the principles of classification, it would be profitable to refer to the decision of Honourable Supreme Court in the case of Commissioner of Commercial Tax, UP Vs. A. R. Thermosets (P) Ltd.-AIR 2016 SC 321 : (2016) 94 VST 258 (SC) wherein, issue was as to whether BITUMEN EMULSION was eligible to be classified under the entry which read as BITUMEN. The stand of the Revenue was that the concerned entry was restrictive as it used the only word "BITUMEN" while t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stare decisis a well established valuable principle of precedent which cannot be departed from unless there are compelling circumstances to do so. The judgments of the court and particularly the Apex Court of a country cannot and should not be unsettled or ignored. Precedent keeps the law predictable and the law declared by Apex Court, being the law of the land, is binding on all courts/tribunals and authorities in India in view of Article 141 of the Constitution. The judicial system "only works if someone is allowed to have the last word" and the last word so spoken is accepted and religiously followed. The doctrine of stare decisis promotes a certainty and consistency in judicial decisions and this helps in the development of the law. Besides providing guidelines for individuals as to what would be the consequences if he chooses the legal action, the doctrine promotes confidence of the people in the system of the judicial administration. Even otherwise it is an imperative necessity to avoid uncertainty, confusion. Judicial propriety and decorum demand that the law laid down by the highest Court of the land must be given effect to. Union of India (UOI) and Ors. vs. S.P. Sharma a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication No. 02/2017-CT (Rate) dated 28.06.2017 and, thus, attracts NIL rate of tax under IGST, CGST and SGST. 7. Further, the applicant has furnished the Additional submission dated 06.08.2020, as below: (i) The issue was already decided in case of M/s. Subramani Sumathi vide Order No. 7/AAR/2019 dated 22.01.2019 by Tamilnadu Advance Ruling Authority, who has held that Maida Vadam/ Papad is classifiable under '109050540'. As GST being promoted as one nation one tax, one needs to follow it by heart and by spirit also by having truly one nation one tax theory. If different tax rates are there for the same product in different States then there will be clear cut violation of One Nation One Tax theory which is ultimate goal of bringing GST into existence. (ii) HSN classification is being followed by Customs authorities years before the CGST came into existence and the exporters are exporting the papad under the HSN code 19059040 even under the product description Fryums as they understand that the Fryums is nothing but a brand name and not product nomenclature. They also submitted the copy of Shipping Bill of Export. After going through the same, it will be clear that exporters a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in absurdity. So the product manufactured by the applicant shall be classified under HSN 1905 which is already held in case of M/s. Subramani Sumathi vide Order No. 7/AAR/2019 dated 22.01.2019 by Tamilnadu Advance Ruling Authority. (iii) The statement of objects and reasons of the GST- The constitutional (122nd amendment) Bill, 2014 clearly says that "The GST shall replace the number of indirect taxes being levied by the union and state governments and to provide for a common national market for goods and services. The statement of objects and reasons of the CGST clearly states that The GST is being brought in to mitigate the difficulty of variety of VAT laws in the country with disparate tax rates and dissimilar tax practices divides the country into separate economic spheres. If this object is to be met then one need to accept the AAR ruling of Tamilnadu Advance Ruling Authority in case of M/s. Subramani Sumathi. If this is not accepted, then the law will result in absurdity as AAR of different states will classify the same product in into many different rates and the object of the constitutional amendment and the CGST and GGST will not be fulfilled. DISCUSSION AND FINDINGS: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s understood in common language. In the case of Indo International Industries v. Commissioner of Sales Tax, U.P. [1981 (8) E.L.T. 325 (S.C.)], Hon'ble Supreme Court has held as follows : "4. It is well settled that in interpreting Items in statutes like the Excise Tax Acts or Sales Tax Acts, whose primary object is to raise revenue and for which purpose they classify diverse products, articles and substances resort should be had not to the scientific and technical meaning of the terms or expressions used but to their popular meaning, that is to say, the meaning attached to them by those dealing in them. If any term or expression has been defined in the enactment then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted. ........." 12.2 This view was upheld by Hon'ble Supreme Court in the case of Oswal 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. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Sl. No. 8 reproduced above mentions about various goods coming within sub-heading 2107.91. It has given illustration to the items Namkeens such as Bhujiya, Chabena. Now the question is as to whether these namkeens given in the notification is a general one including all types of namkeens or only to the type given therein like Bhujiya, Chabena by illustration. The learned Collector has interpreted the word 'such as' to mean namkeen should be of a kind of Bhujiya and Chabena. Although it is not in dispute that the item in question is a namkeen. As can be seen from the various items given in Sl. No. 8 namely Papad, Idli-mix, Vada-mix, Dosa-mix, Jalebi-mix, Gulabjamun-mix are all of a type which cannot be eaten straightaway but it requires to be fried. Chabena also comes in a type of item which requires to be chewed like Potato chips or fried Channa Masala or various types of fried masala dals. There can be any number of examples of namkeens in the form 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 ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent 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] 14.1 In this case, Hon'ble Supreme Court was of the view that 'FRYUMS' were like 'seviyan'. 15. The applicant in their application has submitted that such 'different shapes and sizes un-fried Papad is not a cooked food and actually it is ready to cook food. 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 different shapes and sizes like round, square, semi-circle, hollow circle with bars in between or square with bars in between intersecting each other or shape of any instrument, equipment, vehicle, aircraft, animal types Papad. But, when customer asks the FRYUMS from the shopkeeper, then he shows all such type of different shape and size of FRYUMS, as mentioned above. The applicant has not mentioned this fact because it is crystal clear that Papad is a distinct commodity and it cannot be equated w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of State of Karnataka v. 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. 17.1 However, the State of Karnataka has filed Special Leave Petitions (C) No. 29023-29083/2013 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 the said Special Leave Petitions. Therefore, the aforesaid judgment of the Hon'ble Karnataka High Court is in jeopardy, in view of the judgment of Hon'ble Supreme Court in the case of Union of India v. West Coast Paper Mills Ltd. [2004 (164) E.L.T. 375 (S.C.)], wherein it has been held as under: - "14. Article 136 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. ....... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in sub-section (2) of section 97 for advance ruling; (b) on the concerned officer or the jurisdictional officer in respect of the applicant. 20. The applicant has claimed that the main ingredient of their products i.e. so called Papad and papad products of different shapes and sizes are Cereals, Flour, Starch etc. and so, the applicant is of the view that its products fall in the Chapter 19 of the First Schedule to the Customs Tariff Act, 1975. We find that main ingredient of Papad is batter of Pulses i.e. Moong dal, Udad Dal, black pepper etc. In the market most popular papad are of "Moong dal Papad" and "Udad dal papad". Therefore, main ingredients of both the Products i.e. "Fryums" and "Papad" are not same but are different. Further, the manufacturing processes of both the product have also some differences. In Fryums, some sort of moisture are maintained at specific temperature whereas Papad are required to be completely dried in sun light otherwise "Papad" will become rotten if some moisture remains in Papad and cannot be useful for consumption. Further, it is worthwhile to mention that only ingredients of the product itself cannot be deciding factor for the classification o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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." 22.3 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. Chapter Note 6 pertaining to Tariff Item 2106 90 99 also provides inclusive definition and products mentioned therein are illustrative only. 22.4 Taking all these aspects into consideration, we hold that the product 'different shapes and sizes un-fried FRYUMS' manufactured and supplied by the applicant is appropriately classifiable under Tariff Item 2106 90 99. 23. 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), da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered as Namkeen only and not as Papad - In its decision reported in 1993 (63) E.L.T. 446 (Tribunal), CESTAT had taken similar view in respect of these very goods - Apex Court judgment relied by applicant was in respect of Papad 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." 25. The above Rulings of Advance Authorities are squarely applicable in the applicant case. In view of the said Rulings, it can be concluded that applicant's product of different shape and sizes is "un-fried Fryums" and it cannot be called as "Papad" as claimed in the application and, therefore, merits classification under Tariff Heading 21069099 of the Custom Tariff Act, 1975, attracting GST @ 18% (CGST 9% + GGST 9% or IGST 18%). 26. In light of the foregoing, we rule as under:- RULING Question 1: Under which Tariff Heading ..... X X X X Extracts X X X X X X X X Extracts X X X X
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