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TMI Blog2021 (10) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... oper - Even otherwise, classifying the products Upma Mix Flour, RavaIdli Mix Flour, Muthiya Mix Flour and Khichu Mix Flour under Chapter Heading 23.02 of the CTA, 1975 does not appear correct. Chapter Heading 23.02 of the CTA, 1975 covers Bran, sharps and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants . Thus, it is evident that the Chapter Heading 23.02 covers Bran, sharps and other residues of cereals or of leguminous plants whereas the products Upma Mix Flour, RavaIdli Mix Flour, Muthiya Mix Flour and Khichu Mix Flour cannot be said to be containing bran, sharps and other residues of cereals or of leguminous plants - the products Upma Mix Flour, RavaIdli Mix Flour, Muthiya Mix Flour and Khichu Mix Flour are not classifiable under Chapter Heading 23.02 of the CTA, 1975. Chapter Heading 21.06 and specifically Tariff Item 2106 90 99 is not confined to processed or semi processed food, cooked or semi cooked food, preserved food and ready to eat food. In fact, any product which is a food preparation and which is not elsewhere specified or included in the CTA, 1975, gets covered under Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and condiments; that recipe for preparing farsan/eatables is printed on the packet of product and by following the direction of recipe, farsan/eatables can be prepared instantly after adding such other ingredients as required. The process followed by the applicant (Talod) was narrated as under: (a) Talod purchases food grains and pulses from open market. (b) Such pulses are sorted and washed and then send to grinding machine. (c) Pulses are grinded into flour in grinding machine e.g. where Grams is purchased, it results into gram flour by following grinding process. In certain cases, Talod purchases grinded flour directly from the vendors. (d) Now, certain spices are mixed in flour and such mixed flour is packed in various packings. (e) Mixed Flour (commercially known as 'Instant Mix Flour') are sold in open market or through distributors to consumers. (f) End consumer of such 'Instant Mix Flour' is required to follow certain food preparation process before such product can be consumed as eatable. (g) Hence, 'Instant Mix Flour' cannot be consumed as it is, but it is required to follow certain cooking procedures before consumption. Hence the product manufactured and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idissima). 3. Dhokla Mix Flour Rice, Udad dal, Chana dal, Sugar, IodisedSalt, Sodium Bicarbonate, Citric Acid, Asafoetida. 4. Handwa Mix Flour Rice, Udad dal, Chana dal, Sugar, Iodised salt, Sodium Bicarbonate, Citric Acid, Turmeric, Chillies, Garam Masala (powder of Curry Leaves Bundian, Fennel Seeds, Black Pepper, TajPatta, Clove Leaves). 5. Idli Mix Flour Rice, Udad dal, IodisedSalt, Sodium Bicarbonate, Citric Acid. 6. Dosa Mix Flour Rice, Udad dal, Iodised Salt, Sodium Bicarbonate, Citric acid. 7. Dahi-wada Mix Flour Moong dal, Udad dal, IodisedSalt, Sodium Bicarbonate, Citric Acid. 8. Dalwada Mix Flour Moong dal, Udad dal, IodisedSalt, Sodium Bicarbonate, Citric Acid. 9. Khichu Mix Flour Paddy & Sago (in powder form), IodisedSalt, Cumin Seeds, Carbonate of Soda. 10. Upma Mix Flour Wheat Granule, IodisedSalt, Sugar, Gram dal, Udad dal, Mustard Seeds, Cummin Seeds, Neem Leaves (Sweet), Green Chilli, Hydrogenated Vegetable Oil, Citric Acid. 11. RavaIdli Mix Flour Gram dal, Udad dal, Rava, Citric Acid, Iodised Salt, Green Chilli, Curry Leaves, Mustard Seeds. 12. Medu Vada Mix Flour Udad dal, Gram dal, Rice, Iodised Salt, Sodium Bicarbonate, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 and Notification No.01/2017-State Tax (Rate) dated 30.06.2017, Notification No.01/2017-Integrated Tax (Rate) dated 28.06.2017 (collectively referred to as the 'Rate Notifications'). (2) Whether on the basis of facts of the case narrated above, Chutney Powder mentioned above in Sr.No.18 in above table can be classified under Tariff Item 2106 vide Entry No.100A of Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 and Notification No.01/2017-State Tax (Rate) dated 30.06.2017, Notification No.01/2017-Integrated Tax (Rate) dated 28.06.2017 (collectively referred to as the 'Rate Notifications'). (3) If not, whether on facts and circumstances of the case, Mixed flour and Chutney Powder mentioned above are to be classified in any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit." (4) Chutney powder when supplied with Gota Mix flour and Bhajiya Mix flour, should be considered as Composite Supply having HSN of principal supply i.e. 1106 and 5% GST should apply. 7.1 The GAAR, inter-alia referred to Notification No. 1/2017-Central Tax (Rate) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 10 00, therefore these products mentioned at Sl. No. 3, 5 and 6 above have been held by the GAAR to be classifiable under Tariff Item 1106 10 00 of the CTA, 1975 attracting Goods and Services Tax @ 5% as per Sl. No. 59 of Schedule - I of Notification No. 1/2017-Central Tax (Rate). 7.4 As the Upma Mix Flour and RavaIdli Mix Flour (Sl. No. 14 and 15 above) contain 70% Suji Flour (Wheat Granules), these products were found classifiable under Chapter Heading 11.03; Muthiya Mix Flour (Sl. No. 16) containing 90% Wheat Flour was found classifiable under Chapter Heading 11.01; and Khichu Mix Flour containing 95% Rice Flour was found classifiable under Chapter Heading 11.02. Thereafter, the GAAR referred to Chapter Notes of Chapter 11, according to which products falling under Heading 11.01 to 11.04 have to meet some criteria of Starch Content, Ash Content, Rate of passage through a sieve with an aperture of 315 micrometers / 500 micrometers, in order to be classified under the said headings, otherwise they fall under Chapter Heading 23.02. As the details in respect of Starch Content, Ash Content, Rate of passage through a sieve in respect of these products were not furnished by the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on with effect from 15.11.2017. The GST liability on the said product was 18%(9% CGST + 9% SGST)upto 14.11.2017 and 5%(2.5% CGST + 2.5% SGST) with effect from 15.11.2017. (d) The supply of Gota Mix and Chutney powder will be considered as a 'mixed supply' of goods and will be considered as a supply of Gota Mix (falling under Sub-heading 11061000 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975)) on which the GST liability will be 5%(2.5% CGST + 2.5% SGST). The supply of Bhajiya Mix and Chutney powder will be considered as a 'mixed supply' of goods and will be considered as a supply of Bhajiya Mix (falling under Sub-heading 11061000 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975)) on which the GST liability will be 5%(2.5% CGST + 2.5% SGST). 8.1 Aggrieved by the aforesaid ruling, the Assistant Commissioner, Central Goods and Services Tax, Division - Himmatnagar, Gandhinagar Commissionerate (Jurisdictional Officer) (herein after referred to as the "appellant") has filed the present appeal wherein it has been inter-aliasubmitted that the subject advance ruling is erroneous inasmuch as the GAAR has erroneously classified the Instant Food Mix under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid products are commercially known as 'Instant Mix Flour' in the market and the end consumer of such Instant Mix Flour is required to carry out food preparation process prescribed on food packet such as boiling in water, frying or cooking etc. for preparation of products / Indian dishes before such products can be consumed as eatable. Thus, the aforesaid products are not to be categorized as "Flour Mix" but are "Instant Food Mix" / "Mixture" of various flours, spices and preservatives, which is being used for preparation of Indian dishesviz. Khaman, Gota, Dahi Wada, Dal Wada, Dhokla, Idli and Dosa, after processing, such as cooking, frying or boiling in water etc., for human consumption. It has, therefore been submitted that these products are to be classified as "Food Preparation" / "Instant Food Mix" under Chapter Sub Heading 2106 90 99 (others) of the CTA, 1975, as per the Supplementary Note 6 of Chapter 21 of the CTA, 1975 read with Explanatory Notes to HSN of Heading 21.06. The reliance was also placed on the judgement of the Hon'ble Supreme Court in the case of CCE Vs. INARCO [(2015) 318 ELT 604 (SC)]. 9.1 The applicant has submitted counter reply / cross objection vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions in the cases of (a) Jindal Vijaynagar Steels Ltd. Vs. Commissioner of Central Excise, Mangalore [2008 (11) STR 108 (Tri. - Bang.)]; (b) Union of India Vs. Arviva Industries Ltd. [2007-TMI-1095-Supreme Court of India; (c) Paper Products Ltd. Vs. Commissioner of Central Excise [(1999) 7 SCC 84]. 9.4 The applicant has also submitted that the decision in the case of CCE Vs. INARCO (supra) relied upon by the appellant department is clearly distinguishable on the basis of facts of the case and not applicable to applicant's case. The applicant has relied upon the following decisions - (a) M/s. Mahalakshmi Store, Shri Chellasamy Nadar Deivarajan [Order No. TN/55/AAR/2019 dated 23.12.2019 of the Tamilnadu Authority for Advance Ruling. (b) M/s. ITC Limited [Order No. 11/WBAAR/2020-21 dated 12.10.2020 of the West Bengal Authority for Advance Ruling. The applicant has also relied upon the following Determination Orders under VAT regime in relation to classification of cereal or pulse flour. (a) Kitchen Express Overseas Ltd., Santej [Determination Order No. 2010/D/171-177/No. 356-359 dated 12.08.2010. (b) Vitagreen Products Pvt. Ltd. -Matoda, Rajkot [Determination Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e classifiable under Tariff Item 1106 10 00 of the CTA, 1975 and the remaining products are classifiable under Tariff Item 2302 30 00 / 2302 40 00 of the CTA, 1975.In the appeal filed by the CGST Department, it has been contended that all these products are classifiable as "Food Preparation" / "Instant Food Mix" under Tariff Item 2106 90 99 of the CTA, 1975whereas the applicant has contended that these products are classifiable under Chapter 11 (Chapter Heading 1106, 1103, 1102) of the CTA, 1975. 13.1 We observe that as per Para 2(A) of the Explanatory Notes of HSN for Chapter 11, products from the milling of the cereals listed in the table (Wheat and Rye, Barley, Oats, Maize and Grain, Sorghum, Rice, Buckwheat) fall in this chapter if they satisfy some characteristics. Further, as per Para 2(B) of the Explanatory notes of HSN for Chapter 11, products falling in this Chapter under the provisions of Para 2(A) shall be classified in Heading 11.01 or 11.02 if the percentage passing through a woven metal wire cloth sieve with the aperture of 315 micrometers (microns) / 500 micrometers (microns), is not less, by weight than that shown against the cereal concerned, otherwise, they fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the applicant contain Spices and other ingredients apart from flour of dried leguminous vegetables, rice and wheat, in different proportions. The Spices and other ingredients contained in these products include Sugar, Iodised Salt, Chili Powder, Garam Masala [powder of Chili, Cloves, Baciliyam, Black Pepper, Coriander, TejPatta (Clove Leaves)], Sodium Bicarbonate, Citric Acid, Asafoetida, Ajma, Sounff, Mustard Seeds, Cummin Seeds, Neem Leaves (Sweet), Green Chilli, Hydrogenated Vegetable Oil, Citric Acid etc. These Spices and ingredients are other than those substances mentioned in the Explanatory Notes of HSNfor Chapter Heading 11.01 and 11.02 which could be added in very small quantities to improve or enrich the flours and the resultant product still remain classified in those Chapter Headings. The proportion of Spices and other ingredients contained in these products ranges from 2% to 34%. The proportion of Spices and other ingredients is 34% in Khaman Mix, 25% in Gota Mix, 15% in Handwa Mix, 10% in Dhokla Mix, Idli Mix, Dhosa Mix, Upma Mix, RavaIdli Mix, Muthiya Mix, 7% in Bhajiya Mix, 6% in Dahiwada Mix, 5% in Dalwada Mix, Meduvada Mix, Mung Bhajiya Mix, 4% in Pudla Mix, 3% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said clarification is not applicable in the present case as the products being supplied by the applicant contain Spices and other ingredients, which is not the case with the 'Chhatua or Sattu'. 13.6 The applicant has also relied upon the advance ruling No. TN/55/AAR/2019 issued by the Tamilnadu Authority for Advance Ruling in the case of M/s. Mahalakshmi Store (Shri Chellasamy Nadar Deivarajan). The question raised in that case was as follows - "Whether the unbranded mixture of flour of pulses and grams i.e. leguminous vegetables and cereal flours fall under the HSN Code 1106 and 1102 respectively through blending of leguminous flour added with very small quantity of rice flour or maize flour (without adding salt or any masala product) fall under exemption as per the circular no. 80 dated 31.12.2018 ?" As the products involved in the case of M/s. Mahalakshmi Store contained mixture of flour of pulses and grams only without adding salt or any masala product, the said advance ruling is not applicable in the present case where various products contain Spices and other ingredients in different proportions, apart from flour of dried leguminous vegetables, rice and wheat. 13.7 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat certain products (e.g. wine lees, argol, oilcake) also have industrial uses. Obviously,the products Upma Mix Flour, RavaIdli Mix Flour, Muthiya Mix Flour and Khichu Mix Flour are not residues and wastes derived from vegetable materials used by food-preparing industries. 14.4 Chapter Heading 23.02 of the CTA, 1975 covers "Bran, sharps and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants". Thus, it is evident that the Chapter Heading 23.02 covers Bran, sharps and other residues of cereals or of leguminous plants whereas the products Upma Mix Flour, RavaIdli Mix Flour, Muthiya Mix Flour and Khichu Mix Flour cannot be said to be containing bran, sharps and other residues of cereals or of leguminous plants. The applicant has neither submitted that these products are made from bran, sharps and other residues of cereals or of leguminous plants nor claimed these products to be classifiable under Chapter Heading 23.02 of the CTA, 1975. 14.5 Therefore, we hold that the products Upma Mix Flour, RavaIdli Mix Flour, Muthiya Mix Flour and Khichu Mix Flour are not classifiable under Chapter Heading 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CTA, 1975. As these products are not specifically mentioned under any specific Tariff Item of Chapter Heading 21.06 of the CTA, 1975, these products are classifiable under the residuary entry i.e. Tariff Item 2106 90 99 as "Other". 15.4 The applicant has submitted that the Instant Mix / Ready Mix Flour is by all means not a processed food, neither cooked food, nor semi-processed food, nor semi cooked food, nor preserved food or not a ready-to-eat food. Instant Mixed Flour is a flour of grains and pulses mixed with spices, condiments and flavours. It has also been submitted by the applicant that the end consumer of such instant mix flour is required to follow certain food preparation process before such product can be consumed as eatable, hence Instant Mix Flour cannot be consumed as it is, but it is required to follow certain cooking procedures before consumption. Hence the product manufactured and sold by the applicant is not 'ready to eat' but can be said as 'ready to cook'. In this regard, we observe that Chapter Heading 21.06 and specifically Tariff Item 2106 90 99 is not confined to processed or semi processed food, cooked or semi cooked food, preserved food and ready to eat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Instant Food Mixes such as Pongal mix, Vadai mix, Pacoda mix, Payasam mix, Gulab Jamun mix, RavaDosa mix, Idli mix, Dosai mix, Murruku mix, and Kesari mix, supports our view that various Instant Food Mixes (Instant Mix / Ready Mix Flour) being supplied by the applicant are appropriately classifiable under Chapter Heading 21.06 of the CTA, 1975. 15.7 In view thereof, we hold that the aforementioned 17 products (various Instant Mix Flour / Ready Mix Flour) of the applicant are classifiable under Chapter Heading 21.06 and Tariff Item 2106 90 99 of the CTA, 1975. APPLICABLE RATE OF GOODS AND SERVICES TAX 16.1 The various Instant Mix / Ready Mix Flour being supplied by the applicant are classifiable under Chapter Heading 21.06 and Tariff Item 2106 90 99 of the CTA, 1975. 16.2 In the Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended, entry at Sr. No. 23 of Schedule - III read as follows - S.No. Chapter/Heading/ Sub-heading/ Tariff item Description of Goods 23. 2106 Food preparations not elsewhere specified or included [other than roasted gram, sweetmeats, batters including idli/dosa batter, namkeens, bhujia, mixture, chabena and similar edible preparatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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