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TMI Blog2021 (12) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... s a vegetable Oil and the said product obtained by treating vegetable oil by reaction in the presence of catalyst and in other words it can be said that the product is chemically modified vegetable Oil. On going through the description of goods mentioned above in Entry No.90 i.e. 'Vegetable fats and Oils oxidized by heat in vacuum or inert gas or otherwise chemically modified which covered the Epoxidised Soya Oil. Hence, the said Epoxidised soyabean oil obtained by oxidized by heat in vacuum or chemically modified oil is rightly fits/covered under the said entry No.90. On. the similar issue, in case of IN RE : AGARWAL INDUSTRIES PVT. LTD. [ 2018 (9) TMI 973 - AUTHORITY FOR ADVANCE RULING - ANDHRA PRADESH] it was observed that since the product under question is manufactured out of Vegetable fats/ oils and not from animal fats/ oils, therefore, the correct HSN Code of Energy-G premium Oil is HSN 1518 vide S. No. 90 of Schedule I of Notification dated 28-6-2017 and the applicable rate of tax is 5%. The Deputy Commissioner, Registrar, AAR, Andhra Pradesh informed that no appeal has been filed against the abovesaid order of AAR - It is found that in this case also the Epoxid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rwise I 5% 2. 27 1518 Animal Fats and animal oils and their fractions, boiled, oxidized, dehydrated, sulphurised, blown. Polymerised by heat and vaccum or in inert gas or otherwise chemically modified, excluding those of heading 1516; II 12% 3. 27. 1518 Inedible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this chapter, not elsewhere specified or included. II 12% iii) Manufacturing Process of Epoxidised Soyabeen Oil (ESBO) :- The product Epoxidised Soya bean Oil is a Chemically Modified Vegetable Oil. The Raw material Refined Soybean Oil is oxidized in a rector by the use of Oxidizing agent i.e. Hydrogen Peroxide in presence of a Catalyst. After such process of oxidation etc. Soya-vegetable oil is oxidized under vacuum. The manufacturing process is described as under :- a) Major Raw Material Required : Refined Soyabean Oil, Hydrogen Perox ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edule Description of excisable goods Rate Condition No. 11 1517 90 or 1518 All goods (other than margarine and similar edible preparations) Nil - Further, ESO was attracting levy of VAT/Sales Tax @4% or 5% as amended from time to time. Thus, it is clear that overall, the net incidence of indirect tax on ESO was 4% to 5% depending upon the rate prescribed in the schedules appended to State VAT Acts. (v) The applicant submits that the product Epoxidised Oil is primarily made up of Soya edible oils, which are vegetable fats/oils and not animal fats/oils. Therefore, the product in question should be classified under the more specific entry under Schedule-I. under Entry No. 90 of Schedule I of Notification No. 1/2017- Central Tax (Rate) dated 30.06.2017 bearing the description under the Chapter Heading 1518 and charging GST at the effective rate of 5%. (vi) As can be seen from the above, there are two categories of products which are covered under Heading1518: One category covers vegetable fats and oils a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oils). (iii) Dehydrated castor oil is obtained by dehydrating castor oil in the presence of a catalyst. It is used in the preparation of paints or varnishes. (iv) Sulphurised oils are oils which have been treated with Sulphur or Sulphur chloride to cause polymerization in the molecules. Oil thus processed dries more rapidly and forms a film which absorbs less water than the usual film of dried oil, and has greater mechanical strength. Sulphurised oils are used for anti-rust paints and varnishes. (v) Oils polymerised by heat in vacuum or in inert gas are certain oils (particularly linseed oil and tung oil) which have been polymerised by simply heating, without oxidation, at 250 C to 300 C. Either in inert carbon dioxide gas or in a vacuum. This process produces thick oils commonly called stand-oils used for the manufacture of varnishes forming a particularly supple and waterproof film. Stand-oils from which the non-polymerized portion has been extracted (Teka oils) and mixtures of stand-oils are included in this heading. (vi) The other modified oils in the heading include: (a) Maleic oils obtained by treating. e.g.. soya-bean oil with limited am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The products covered herein are subjected to processes which modify their chemical structure thereby improving their viscosity, drying power (i.e., the property of absorbing oxygen when exposed to the air and forming elastic films) or modifying their other properties, provided they retain their original fundamental structure. The Oil is subjected to epoxidation process, which is a chemical treatment resulting in better oxirane oxygen contents and higher molecular weight. The Oil manufactured retains its fundamental structure as well as physical appearance even after the chemical treatment. 3. It includes Epoxidised oils obtained by treating, for example, soya bean oil with peracetic acid pre-formed or formed in situ by reaction between hydrogen peroxide and acetic acid in the presence of a catalyst. The product under consideration is poxidised oil itself, which is manufactured by a similar chemical treatment involving addition of hydrogen peroxide and formic acid/acetic acid into soya bean oil. which undergoes a reaction under strictly- controlled process conditions in the reactor. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons. The said entry No 27 includes within its purview inedible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this chapter, not elsewhere specified of included. Therefore Epoxidised Soya Oil cannot be covered under entry no. 27 of Sch. II. (xii) The applicant submitted that, since the entry contained in Schedule I is more specific and covers all kinds of vegetable oils, whether or not chemically modified and whether or not such vegetable oils are edible. Hence, the Epoxidised oil manufactured by the Applicant from the vegetable oils, merit classification under Schedule I of Chapter Heading 1518. In view of the specific entry under the GST provisions, the product Epoxidised oil should fall under Schedule-I and should be taxable at 5%. Moreover, the entry under Schedule-I does not specifically mention about the vegetable fats or oils being edible or inedible, which means that both edible and inedible oils are covered under this entry. If the intention of the Government was to cover either edible oils or inedible oils, the same would have been mentioned specifically in the description, as can be observed in the descr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether chemically modified or not, the same merits classification under Schedule-I under tariff heading 1518.The Applicant submits that the product manufactured by the Applicant i.e. Epoxidised oil is also a similar kind of product. As the entry specifically uses the term otherwise chemically modified which means that even if the mixture of edible oils is modified chemically. still the same would fall under Schedule-I. (xv) Under such circumstances, the Oil, which is in the nature of a 'vegetable oil qualifying the description specified in the Entry, will classify under Chapter Heading 1518 of the CTA, 1975 as supported by the following judicial precedents(Copies Annexed):- (i). CCE, Surat vs. Consumer Plastics Pvt. Ltd. 2006 (194) E.L.T. 214 (Tri. - Mumbai); (ii). Adjudication Order No. 15/COLLR/CEX/ADJ/94 dated 29.03.1994 passed in the case of M/s. National Peroxide Ltd., Dewas by the Ld. Collector of Central Excise;( Para 13 to 18) (iii). M/s. IVP Ltd. by the Ld. Assistant Collector of Central Excise in Case No. F/110/1990, Order dated 27.08.1992. In support of above, we are enclosing herewith Two Laboratory reports wherein it has been ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inders, whereas Excise Tariff cover only engines therefore hydraulic cylinder is clearly under the heading 8431 of Central Excise tariff and need no interference The Appeal is filed by appellant is decided in above manner. That the Authority of Advance Rulings, Andhra Pradesh in case of M/s. Agrawal Industries Private Limited (copy enclosed) vide Para 1, 3, 4 5 have held as follows :- 1. M/s. Agrawal Industries P. Ltd Plot No. 5A/1 Vakalapudi, IDA Kakinada533007 (hereinafter also referred as applicant) having GSTIN 37AACCA0094R1ZA are engaged in manufacturing of ingredients of poultry feed, particularly involved in the manufacturing of substitute of Rice bran oil, which is used in the preparation of poultry feed. They named their product as Energy -G premium Oil and stated that their product is inedible or not fit for human consumption and purely, for manufacturing of poultry feed. 3. A personal hearing was fixed on 21st May 2018 which was attended by Shri M. Rama Chandra Murthy, authorized representative on behalf of the applicant. The applicant is of the view that the said Energy - G premium Oil fills under the HSN Code : 1518 of Schedule I as per the Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specific for epoxidised soya oil, nothing is mixed, it is not a mixture. It is edible in nature hence epoxidised soybean oil will specifically fall under enter number 90 of Schedule-I of GST rate Not No. 1/2017-Central Tax (Rate) dated 28:07.2017 and will attract 5% IGST. 9. It is also a settled law that no word can be added in the entry prescribed in the notification. Thus for classifying the product, End Use condition cannot be added. 10. We would like again to be heard in person before making a decision on our AAR application. - 4. QUESTIONS RAISED BEFORE THE AUTHORITHY:- The following questions have been posted before the Authority in the application:- Whether Epoxidised Soya bean Oil can be classified under tariff item 1518 of Schedule-I (taxable at 5%) or Schedule-II (taxable at 12%) of Notification No. 1/2017-Central Tax (Rate) dated June 28, 2017, as amended from time to time? 5. CONCERNED OFFICER'S VIEW POINT: Asstt. Commissioner(Tech) CGST Centra Excise Ujjain vide his letter C.No.IV(16)19-95/GST/Tech/Misc-Corres.-H/2018-19/ dated 10.02.2021 forwarded comments received from the Division Pithampur vide letter C.No.1V(16)30-01/17-18/Pith/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excluding those of heading 1516: inedible mixtures or preparation of animal or vegetable fats or oils or of fractions of different fats or oils of this chapter. not elsewhere specified or included. As per the heading given above, we find that the Epoxidised Soyabean Oil is covers under the above chapter heading 1518. 7.3 Further, in case of Commissioner of Central Excise, Surat-II Vs. Consumer Plastic Pvt. Ltd. 2006 (194) E.L.T.214 (Tri.Mumbai), the Tribunal held that the Epoxidised vegetable Oil used as plasticisers or stabilisers in plastic industry, classifiable under Chapter 15 of Central Excise Tariff and not under Heading 38.12 ibid. Hence, we find that there is no doubt for classification of Eposidised soyabean oil under chapter heading No.1518. 7.4 For find out that whether the product Epoxidised soyabean oil is covered under the Schedule-I or Schedule-II of Notification No.01/2017-CT dated 28.06.2017. the relevant entries of the Rate Notification are reproduced here under :- Sr. No. Entry No. Chapter Heading Description of Goods Schedule Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssification of goods under tariff item 1518 but want to covers the said goods under entry No.27 of Schedule-H without any supporting. Further no justification has been given why the said product is not covered under Entry No.90 of Schedule-I .We observe that in the Entry No.27 of Schedule -II of the Notification No.01/2017-Central Tax(Rate) dated 26.06.2021 only those products are covered which are not elsewhere specified or included whereas in this case the Epoxidised Soyabean Oil is rightly specified/included under entry No.90 of schedule-1, hence no relevance of entry no.27 of Schedule-II. The applicant is manufacturing and supplying the said goods epoxidised Soya Oil classifying under heading no.1518 and paying tax @5% under entry No.90 schedule-I and regularly filed return to the department. Further, as the said product specifically covered under the entry no.90 of Schedule I as mentioned above, the question of entry no.27 of schedule-II does not arise. 7.8 On. the similar issue, in case of M/s Agrawal Industries Pvt. Ltd., the Andhra Pradesh Authority for Advance Ruling vide order dt.8/6/2018 observed that since the product under question is manufactured out of Vegetab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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