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TMI Blog2021 (8) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... edible parts of plant which is prepared or preserved by any other process than these, are liable to be classified under Chapter 20. Chapter Heading 2008 of the Customs Tariff covers all roasted and fried vegetable products - Frying and roasting are two popular cooking methods that both use high temperature. It is not necessary that both the conditions are to be cumulatively satisfied for classifying a product under the category of roasted and fried products. Since according to chapter notes and description of tariff items, the products are classifiable under specific headings of Chapter 20 and hence they cannot be classified under Heading 2106 as food preparations not elsewhere specified or included. Applying the principles of interpretation in Rule 2 of the General Rules for Interpretation of the First Schedule to the Customs Tariff Act, 1975 the Jackfruit Chips, Banana Chips, Sharkara Varatty, Tapoica Chips and Potato Chips (Whether salted/ masala or otherwise) are classifiable under Tariff Heading 2008 19 40 of the Customs Tariff Act, 1975. Regarding classification of roasted /salted / roasted and salted Cashew nuts, Ground nuts and other nuts there are specific headings und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and when sold without a brand name can they be classified under HSN 2106.90.99 and taxed under Entry 101A of Schedule 1 of Central Tax (Rate) Notification No.1 of 2017? 4. Contentions of the Applicant: 4.1. The Jackfruit Chips, Banana Chips and Sarkara Varatty are sold without brand name. Jackfruit chips are made by frying the fruit in edible oil. Banana Chips are made by slicing raw / ripe bananas into thin round pieces and frying in edible oil. Salt and Turmeric are also applied. By adding masala fried banana masala chips are prepared. Sarkara Varatty is made by frying thick pieces of banana slices in edible oil. Thereafter, they are mixed thoroughly in dense syrup of jaggery and then mixed in powder of dried ginger and cardamom. Thus Jackfruit Chips, Banana Chips and Sharkara Varatty are edible preparations and the first two are savoury and Sharkara Varatty is a Sweetmeat. Accordingly, the applicant is levying GST at the rate of 5% by classifying the commodities under Entry 101A of Schedule I of Central Tax (Rate) Notification No.1 of 2017. 4.2. They intend to deal in salted and masala chips made from Tapioca and Potato. Tapioca and Potato are sliced into round pie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2106 90 99 Entry Other 4.3. IN RE: P.M. SANKARAN [KER/53/2019 Dated 21st June 2019] and KER/66/2019 dated SEPTEMBER 30, 2019 of this Honourable Authority, it is held that Jackfruit Chips, Banana Chips and Sharkara Varatty fall under HSN 2008.19.40 and have to be classified under Entry 40 of Schedule II of Notification No.1 of 2017 and tax at 12% is liable to be paid. Relevant entries are reproduced below for easy reference; Entry 40 / Sch.II of Notfn No.01 of 2017 HSN 2008 Fruits, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included; such as ground nuts, cashew nut roasted, salted or roasted and salted, other roasted nuts and seeds, squash of mango, lemon, orange, pineapple or other fruits. Chapter 20 Chapter Heading Preparations of vegetables, fruit, nuts or other parts of plants. Chapter 20 Chapter Note 1 This chapter does not cover: v) Veg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary Note No.6 of Chapter 21 of Customs Tariff Act. Note No.1 of Chapter 20 states that the chapter does not cover vegetables, fruit or nuts, prepared or preserved by the processes specified in Chapter 7, 8 or 11. Banana and jackfruit are classified under Chapter 8 of Customs Tariff Act, with HSN Code 0803 and 0810.90.90 respectively. So, chips and Sharkara Varatty are not covered by HSN 2008 and hence do not fall under Entry 40 of Schedule II of Central Tax (Rate) Notification No.1 of 2017. Entry 2008 19 40 of Customs Tariff Act refers to Other roasted and fried vegetable products . Banana and Jackfruit being not vegetables, its chips cannot be classified under this HSN. 4.5. Further, the Entry in Customs Tariff Act uses the words roasted and fried . So, it is a cumulative condition. Banana Chips, Jack Fruit Chips and Sharkara Varatty are made by frying banana/ jack fruit in edible oil. Being fruits and being not ROASTED AND FRIED , these cannot be classified under 2008.19.40. In any case, banana and jack fruit are covered by HSN Code 0803 and 0810.90.90 respectively and on this primary ground they cannot be classified under HSN 2008 Advance Ruling IN RE: P.M. SANKARAN [KER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or sold out of individual choice or taste probably to cater to their particular customers as part of their business method or marketing method. But, these Isolated or individual choices or taste for marketing particular goods will not and cannot render such goods as one covered by the words bakery products . 8. We are of the view that the Appellate Tribunal was in error in holding that the words bakery products will take within its fold anything dealt with or marketed or connected with the bakery. In order to say that particular goods are covered by the said word, those goods should be understood in their natural, ordinary or common parlance as bakery goods. So viewed, we are of the opinion that the mere fact that banana chips, tapioca chips, murukku, achappam, pakkavada and mixture were sold or marketed by the dealer, who is really a baker, cannot be covered by the entry bakery products within the meaning of those words as occurring in the Kerala General Sales Tax Act. This is so especially in the context and collocation of words occurring in the First Schedule to the Kerala General Sales Tax Act. 4.7. The ADVANCE RULING NO. KER/66/2019 dated SEPTEMBER 30, 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SAFETY AND STANDARDS (FOOD PRODUCTS STANDARDS AND FOOD ADDITIVES) REGULATIONS, 2011, it is stated that that banana chips and similar fried products such as Chiwda, Bhujia, Dalmoth, Kadubale, Kharaboondi, Spiced and fried dais, sold by any name are traditional foods ie., Snacks of Savouries (Fried Products). 5. CONTENTIONS OF THE JURISDICTIONAL OFFICER: 5.1. The Jurisdictional Officer submitted that Chapter 20 covers 'Preparations of vegetables, fruit, nuts or other parts of plants'. As per Explanatory Notes to Chapter 20, it does not cover vegetables, fruit or nuts prepared or preserved by the processes specified in Chapter 7, 8 or 11. It is seen that these processes in Chapter 7, 8, or 11 are freezing, steaming, boiling, drying, provisionally preserving and milling. Therefore, any edible part of plant which is prepared or preserved by any other process than these is classifiable under Chapter 20. The banana is sliced, fried and the flavours added. But the essential nature of the product is still the same. As long as the essential nature is retained, the edible parts of plants are classifiable under CTH 2008. [ In re: Gourmet Popcornica LLP [TS-491-AAR-2020-NT-Tam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .06.2017. 7.2. Chapter 21 of the Customs Tariff covers Miscellaneous edible preparations . The Heading 2106 of the Chapter 21 covers food preparations not elsewhere specified or included. Those food preparations, not specified or included elsewhere in the tariff being preparations for use either directly or after processing for human consumption are to be classified under this head. Therefore, it is evident that the entry is a residuary entry in respect of edible preparations and hence the edible preparations shall be classified under this entry only if the same are not classifiable under any of the other specific entries for edible preparations. 7.3. The Explanation appended to the Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017 reads as follows; Explanation :- (1) In this Schedule, tariff item, heading, sub-heading and Chapter shall mean respectively a tariff item, heading, sub-heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise description of the goods (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. Rule 4: Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin. 7.5. Chapter 20 of Customs Tariff specifically covers 'Preparations of vegetables, fruits, nuts or other parts of plants. As per Chapter Note 1 (a) to Chapter 20, the Chapter does not cover vegetables, fruits or nuts prepared or preserved by the processes specified in Chapter 7, 8 or 11. Therefore, all the vegetable, fruit or nut products or preparations made other than by the processes specified in Chapters 7, 8 or 11 are included in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not elsewhere specified or included; such as Ground-nuts, Cashew nut, roasted, salted or roasted and salted, Other roasted nuts and seeds, squash of Mango, Lemon, Orange, Pineapple or other fruits. On a plain reading of the above entry it is evident that all the products that fall under Chapter Heading 2008 of the Customs Tariff Act, 1975 attract GST at the rate of 12 % [6% CGST + 6% SGST]. In view of the observations as above, the following rulings are issued; RULING 1. Whether Jackfruit chips and Banana chips (salted and masala varieties) made out of raw as well as ripe banana and sold without BRAND NAME are classifiable as NAMKEENS and are covered by HSN code 2106.90.99 and taxable under Entry 101A of schedule of Central Tax (Rate) Notification No.1 of 2017? No. The Jackfruit Chips and Banana Chips are classifiable under Customs Tariff Heading 2008.19.40 and liable to GST at the rate of 12% [6% - CGST + 6% - SGST] as per Entry at SI No. 40 of Schedule II of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. 2. Whether Sharkara Varatty sold without BRAND NAME is classifiable as SWEET MEATS and covered by HSN code 2106.90.99 and taxa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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