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TMI Blog2021 (1) TMI 1194X X X X Extracts X X X X X X X X Extracts X X X X ..... code of the product namely Popcorn is 19041090 attracting rate of tax @ 9% each under Central and State Tax (cumulatively 18%) as per Sl. No. 15 of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 , as amended. - UP ADRG 71/2021 - - - Dated:- 1-1-2021 - Shri Abhishek Chauhan and Shri Dinesh Kumar Verma, Member Represented by : Ms. Shuchi Sethi (C.A. Authorized representative) ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 UNDER SECTION 98(4) OF THE UPGST ACT, 2017 1. M/s. Shyam Sundar Sharma, 21, Icon Vatika Vigyan Vihar, Bharmoli, Ahir Road, Agra-282009 (hereinafter referred to as the 'applicant') is an individual planning to initiate a business of manufacturing and sale of eatable item ready to eat 'Popcorn' with various flavors in retail packs under the Brand name 'Yo Popcorn'. The brand name will be registered under the applicable laws. As of now, the applicant is not registered under GST and he is desirous of obtaining GST registration for this business 2. The applicant has submitted application for Advance Ruling dated 05.10.2020 enclosing dully filled Form ARA-01 (the application form for Advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakes 19041020 --- Paws, Mudi and the like 19041030 --- Bulgur wheat 19041090 --- Other 19042000 - Prepared foods obtained from unroasted cereal flakes or from mixtures of unroasted cereal flakes and roasted cereal flakes or swelled cereals 19043000 - Bulgur wheat 19049000 - Other Chapter Note 4 to Chapter 19 states as under: 4. For the purposes of heading 1904, the expression otherwise prepared means prepared or processed to an extent beyond that provided for in the headings of or Notes to, Chapter 10 or 11. Chapter 21 Miscellaneous edible preparations 2106 FOOD PREPARATIONS NOT ELSEWHERE SPECIFIED OR INCLUDED 21061000 - Protein concentrates and textured protein substances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust be: (i) prepared foods, (ii) such food must be obtained only by swelling or roasting and (iii) it should be obtained by swelling or roasting of cereals or cereal products. The second part of the Heading appears to include precooked or otherwise prepared cereal in grain form or in the form of flakes or other worked grains which not elsewhere specified or included. It excludes the products prepared from following: Maize (corn) Any cereal in flour and meal form (vi) It is clear from the above two parts of the Heading is that any product prepared from Maize (corn) cannot fall under the second part. Hence 'Popcorn' obtained by various processes on Maize(corn) cannot fall under this part (vii) the product flavoured popcorn is not prepared just by swelling or roasting of cereals. The list of ingredients in itself very clearly sets out that there are more products involved in manufacture of popcorn other than just the cereal Corn (maize). The manufacture process involves mixing of oil and salt and seasoning to the maize corn in appropriate quantity for bringing the required flavour in the popcorns like salted, butter, cheese, tomat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny other name (xi) Further coming to HSN 2106, it is submitted that it is an omnibus Heading covering all kinds of edible preparations, not elsewhere specified or included. Note 5 to Chapter 21 provides an inclusive definition of this Heading and covers preparations for use either directly or after processing, for human consumption. The product 'Popcorn' to be manufactured by applicant can be used directly for human consumption, hence it is well covered in the inclusive part of Note 5 to Chapter 21. (xii) Further keeping in view, the ingredients being oil, salt and seasonings for flavours and method of preparation, the product is aptly classifiable as namkeen and similar edible preparations. (xiii) As a settled principle of classification, common parlance theory has to be given supreme importance. According to this theory, the nature of product as understood by the trade in general, including the customers or sellers, has to be adopted for classification of product in the relevant descriptions in Tariff. (xiv) Delhi Tribunal in case of Pepsico India Holdings Pvt. Ltd. Versus Commr. of C. Ex. S.T., Chandigarh-I 2015 (318) E.L.T. 278 (Tri. - Del.). for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d over general one. However as already explained, 'Popcorn' does not get covered in the description of Heading 1904. Hence it cannot be a specific description for the product. Then the product is not composite goods or mixture, hence Rule 3(b) is also not applicable. Rule 3(c) states that when goods are not classifiable as per above two sub-rules, then Heading which comes last in numeric order should be adopted. (xvii) Hence even on application of these rules, the product is classifiable under HSN 2106 occurring last among HSN 1904 or HSN 2106. Such a view has also been taken in AAR pronounced by Karnataka Authority of Advance Ruling in case of ID Fresh Food (India) Private Limited (KAR/ADRG/38/2020 dated 22.05.2020) while considering classification of parota, held as not classifiable under HSN 1905 but under HSN 2106 and taxable at the rate of 12% under GST. (xviii) for the purpose of determination of GST rate, the entries in Notification No. 01/2017-Central Tax (Rate) for products falling under HSN 2106 are as under: S.No. Chapter / Heading/ Sub-heading / Tariff item Description of Goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e vide his letter C.No. 1371/GST-Advance Ruling/2020-21/Ad.Com.Grade I, Va. Ka, Aa. Dated 27.11.2020 forwarded report dated 11.11.2020 of the Deputy Commissioner, Commercial Tax, Division-3, Agra, wherein it has been opined that popcorn supplied under brand name 'Yo Popcorn' will attract GST @ 18% (9% CGST 9% SGST) under Tariff item 2106. 6. The applicant was granted a personal hearing on 14.12.2020 which was attended by Ms. Shuchi Sethi, Authorized Representative during which she reiterated the submissions made in the application of advance ruling. DISCUSSION AND FINDING 7. At the outset, we would like to make it clear that the provisions of both the CGST Act and the UPGST Act 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 the same provision under the UPGST Act. Further for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / UPGST Act would be mentioned as being under the 'CGST Act'. 8. We have gone through the submissions made by the applicant and have examined the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... popular sense, meaning that sense which people conversant with the subject matter with which the statue is dealing, would attribute to it . It is to be construed as understood in common language. In the case of Indo International Industries Vs. 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 13. This view was upheld by Hon'ble Supreme Court in the case of Oswal Agro Mills Ltd. Vs. Collector of Central Excise [1993 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2010 (258) ELT 321 (S.C.)], has observed in para 12 of its order as follows :- [12. In Collector of Central Excise, Shillong v. Wood Crafts Products Ltd. reported in (1995) 3 SCC 454, it was held by this Court that as expressly stated in the statements of objects and reasons of the Central Excise Tariff Act, 1985, the Central Excise Tariffs are based on the Harmonious System of Nomenclature (HSN) and the internationally accepted nomenclature was taken into account to reduce disputes on account of tariff classification. Accordingly, for resolving any dispute relating to tariff classification, a safe guide is the internationally accepted nomenclature emerging from the Harmonious System of Nomenclature (HSN). Although, the decision in the case of Woodcraft Products (supra) dealt with the interpretation of the provisions of the Central Excise Tariff there can be no doubt that the HSN Explanatory Notes are a dependable guide even while interpreting the Customs Tariff.] 17. It is observed that the product in question i.e. 'POP CORN' is manufactured from maize corn by heating in an electric kettle and due to the heat of kettle, they turn into puffed corns/popcorns and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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