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TMI Blog2019 (12) TMI 1573X X X X Extracts X X X X X X X X Extracts X X X X ..... ganic manure. The contention put during the time of hearing that the dung with AMI can be used as fertiliser appears to be a weak attempt to justify their claim of the product as fertilizer. The dung is used as the base for the culture of AMI and this AMI growth in no way adds to the fertilizing property of dung. Moreover, the company is manufacturing and selling AMI for bio degrading human waste and not AMI infused dung as fertilizer. Thus, it is not the AMI which is organic manure but at the most the products resulting out of its actions which can be put into use as manure, though that too has not been claimed. Though the Ld AAR has discussed the nature of AMI in their ruling quite elaborately, but appear to have failed to understand the issue in the proper perspective. Obviously, the contention of the authorized representatives is wrong and the inference drawn by the Ld. AAR on the issue is also completely inaccurate and misconceived. Therefore, by no stretch of imagination can AMI be considered as organic manure and hence it cannot be classified under HSN 3101. In the present case, on a detailed scrutiny of the details of AMI as submitted by the party as well as the desc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable tax rate to be used under GST or their product i.e. AMI (Anaerobic Microbial Inoculums). Therefore, in terms of said Section 97 (2)(a) (e) of CGST/SGST Act, 2017, the said application was admitted. 2. Following the personal hearing given to the applicant on 11.01.2019, the members of the Advance Ruling Authority for the state of Uttarakhand vide Advance Ruling No. 18/2018-19 dated 06.02.2019 ruled that: Anaerobic Microbial Inoculurns (AMI) will be classified under chapter sub-heading 31010099 of the heading 3101 of the GST Tariff and accordingly, the supply of these products will attract GST @ 5% [CGST @ 2.5% + SGST @ 2.5%] as on date. 3. GROUNDS OF APPEAL:- 3.1 Aggrieved by the said order passed by the Authority for Advance Ruling for the State of Uttarakhand, the department, represented by Shri Rajeev Kumar, Assistant Commissioner (Review), CGST Commissionerate, Dehradun, has filed the instant appeal dated 28.03.2019 on the following grounds: a. Hon'ble Advance Ruling Authority, (Uttarakhand) has overlooked the fact that while classifying any goods we have to look into the name, character and use of the said good. In instant case the AM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nil 35079062 --Streptokinase-- kg. 9% 9% 18% Nil 35079069 --Amylases enzymes-- kg. 9% 9% 18% Nil c. The party misrepresented the nature of AMI by quoting the alternate use as 'Organic Manure' while the AMI is primarily used in the decomposition of biological waste generated by humans into useable water and gases in an eco-friendly manner. This character of AMI is of enzyme and same should be classifiable under the chapter heading 3507 of Goods and Service Tax Tariff, 2017. Therefore the Advance Ruling Authority, Uttarakhand appears to have erred in classifying the AMI under chapter sub-heading 31010099 of the heading 3101 of the GST Tariff. d. Hence in the view of the above of facts, it appears that AMI has been wrongly classified under chapter sub-heading 31010099 of the heading 3101 of the GST Tariff. 3.2 Accordingly, in light of the aforementioned submissions, the department has sought relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 6. Since there has been a delay of only 14 days in fling appeal against the Advance Ruling Authority order which has been attributed to engagement of the concerned officers in election related duties we condone the delay in terms of proviso to sub section (2) of the Section 100 of the CGST Act, 2017. The appeal is registered as UKGST ARA 03/02/15.11.2019. 7. The point of contention is the correct classification of 'Anaerobic Microbial Inoculum' (hereinafter referred to as 'AMI') and the applicable GST rate. We find that the manufacturers, in their application before the AAR, had contended that one of the uses of their said product i.e. AMI was as organic manure. The Ld. AAR, appear to have been influenced by this contention of the party and thereby deciding to classify AMI under HSN code 3101which covers animal or vegetable fertilizers or organic fertilizers. 8. At the very outset, we find that though the authorized representatives of the party had contended that the alternate use of AMI was as organic manure, the website of the party viz. www.elefobiotech.com , does not show organic manure as one of its manufactured products. The said website, whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus an enzyme has to be a product of living cell. However, in the present case, on a detailed scrutiny of the details of AMI as submitted by the party as well as the description given on their website and other relevant information, it is found that the product 'AMI' are not any product of living cell or organism,' rather they are themselves culture/colonies of bacteria put in the medium of dung. They are also not acting as a catalyst in the strict sense rather they digest the waste products releasing water and gases as by products. Therefore. 'AMI' cannot be classified under the heading of 'Enzyme' as contended in the appeal filed by the CGST officer. During the hearing the party's representative Shri Bathla also stated that their product may get covered as live bacteria. 10. After a careful study of the GST Tariff, we find that it contains a specific entry which appropriately applies to products having properties of AMI and accordingly conclude that AMI is classifiable under SI. 61 of notification No.1/2017-Central Tax (Rate), dated 28th June, 2017, [as amended from time to time] HSN 3002 [cultures of micro-organisms (excluding yeasts) and s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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