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TMI Blog2022 (3) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... aracter of the preparations is given by such fruit, nuts or other edible parts of plants. Therefore, it is evident that the entry 2106.90 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. It is noticed that 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. It means that these items not being processed or preserved by the said processes shall be covered in chapter 20. The processes specified in chapter, 7, 8 or 11 are freezing, steaming, boiling, drying, provisionally preserving and milling. Chapter heading 2008 covers roasted, salted or roasted nuts and fruits such as ground nuts, cashew nuts, other seeds and nuts and these are specifically covered under said heading vide sl. No. 40 of schedule II to notification No. 1/2017-CT (rate) - there remains no doubt that the roasted/salted/roasted and salted ground nuts, cashew nuts and other seeds/nuts shall be appropriately classifiable under he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of tariff, the contention of the appellant regarding common parlance understanding of a goods does not hold water, as is therefore rejected. All the other contentions of the appellant are rejected being not tenable and impugned goods viz. Jackfruit Chips, Banana Chips, Tapoica Chips, Potato Chips, Chembu Chips and Pavakka Chips (Bittergourd) (Whether salted/ masala or otherwise) are held 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 under Chapter 20 that covers the products. Accordingly, roasted /salted / roasted and salted Cashew nuts are held classifiable under Tariff Heading 2008 19 10, and other roasted/ salted / roasted and salted nuts and seeds are classifiable under 2008 19 20 of the Customs Tariff Act, 1975. - ORDER No. AAR/16/2021 - - - Dated:- 14-12-2021 - Shyam Raj Prasad, IRS Chief Commissioner Central Tax, Central Excise Customs Thiruvananthapuram Zone And Dr. Rathan U. Kelkar, IAS Commissioner State Goods Service Tax Kerala Authorized Representative: CA Seshadri Nadan ORDER No. AA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 2017. This Entry and the applicable entries in Customs Tariff Act were reproduced for convenient reference of this Honourable Authority:- Entry 101 Sch. 1 of Notification 1 of 2017 HSN 2106.90 Sweatmeats Entry 101 A / Sch. 1 of Notification 1 of 2017 HSN 2106.90 Namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, other than those put up in unit container and, -(a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or any enforceable right in respect of such brand name has been voluntarily foregone, subject to the conditions as specified in the ANNEXURE Chapter 21 of Customs Tariff Act Supplementary Note No. 5 (b) Heading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter alia, includes: (b) preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d; such as Groundnuts, 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, fruits, nuts or other parts of plants. Chapter 20 Chapter Note 1 This Chapter does not cover: (a) Vegetables, fruit or nuts, prepared or preserved by the processes specified in Chapter 7, 8 or 11; Chapter 8 Chapter Heading EDIBLE FRUIT AND NUTS; PEEL OF CITRUS FRUIT OR MELONS HSN 0803 Entry Bananas, including plantains, fresh or dried HSN 0803 90 Entry Other HSN 0803 90 10 Entry Bananas, Fresh HSN 0803 90 10 Entry Other HSN 0810 Other fruit, fresh HSN 0810.90.90 Entry Other (submitted that jack fruit is class ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le preparations and attract applicable GST rate. 3.7. Note No. 1 of Chapter 20 states that this chapter does not cover vegetables, fruit or nuts, prepared or preserved by the processes specified in Chapter 7, 8 or 11. I understand that Banana and Jackfruit are classified under Chapter 8 of Customs Tariff Act, with HSN Code 0803 and 0810.90.90 respectively. So, chips and Sharkaraivaratty 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 . Bananas and Jackfruit being not vegetables, its chips cannot be classified under this HSN. Yet another aspect is that the Entry in Custom Tariff Act uses the words roasted and fried . So, it is a cumulative condition, Banana Chips, Jack Fruit Chips and Sharkaraivaratty 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thing 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. 3.9. Further ADVANCE RULING NO.KER/66/2019 dated SEPTEMBER 30, 2019, was also a case where applicant himself had raised the query whether Banana Chips, Chakka Chips, Chembu Chips, Kappa Chips, Sharkaraivaratty, KovakkaiVattal and PavakkaiVattal are classifiable under HSN Code 2008 19 40 - Other roasted and fried vegetable products and is liable to GST at the rate of 12% as per Sl. No. 40 of Schedule II of Notification No.01/2017 Central Tax (Rate), dated 28.06.2017. This query was answered by the Authority for Advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made out of both raw as well as ripe banana), Banana Chips (masala) sold without BRAND NAME are classifiable as NAMKEENS and are covered by HSN Code 2106.90.99 and taxable under Entry 101 A of Schedule of Central Tax (Rate) Notification 1 of 2017? Query 2: Whether the commodities Sharkaraivaratty and Halwa sold without BRAND NAME are classifiable as SWEET MEATS and are covered by HSN Code 2106.90.99 and taxable under Entry 101 of Schedule of Central Tax (Rate) Notification of 2017? Query 3: Whether Roasted and salted / salted / roasted preparations such as of Ground-nuts, Cashew nut and other seeds are NAMKEENS and when sold without a brand name can they be classified under HSN 2106.90.99 and taxed under Entry 101 A of Schedule I of Central Tax (Rate) Notification 1 of 2017? Query 4: Whether salted and masala chips of Potato and Tapioca are classifiable as Namkeens and when sold without a brand name can they be classified under HSN 2106.90.99 and taxed under Entry 101 A of Schedule I of Central Tax (Rate) Notification 1 of 2017? 3.13. Unfortunately, without adverting to above stated facts and legal position, Learned Authority for Advance Ruling held that all the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r called by any other name. Such products remain classified in these sub-headings irrespective of the nature of their ingredients . Therefore chips made from banana, jackfruit, tapioca, chembu and potato and kovakkai and pavakkai vattal are NAMKEENS and classifiable under HSN 2106.90.99 and Entry 101 A of Schedule I of Central Tax (Rate) Notification 1 of 2017. 4.5. Supplementary Note No. 6 in Chapter 21 makes HSN 2106.90.99 a specific entry. So, chips made from banana (ripe as well as raw), tapioca, jack fruit, potato and chembu and kovakka and pavakka vattal, ought to have been held as NAMKEENS and liable for tax under Entry No. 101 A of Central Tax (Rate) Notification No. 1/ 2017 dated 27/06/2017. So, the question of including them under any other Chapter like Chapter 20 does not arise. Similarly, Sharkaraivaratty and Halwa are sweetmeats by application or common parlance test and, Supplementary Note No. 6 of Chapter 21, as is evident from the words commonly known as Misthans or Mithai or called by any other name. They also include products commonly known as Namkeens , mixtures , Bhujia , Chabena or called by any other name. Such products remain classified in these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kkai and pavakkai vittal and similar preparations are namkeen. In Paragraph 3.4 of the Circular, it is stated that However, if the above dried leguminous vegetable is mixed with other ingredients (such as oil, salt etc) or sold as namkeens then the same would be classified under Sub heading 2106 90 as namkeens, bhujia, chabena and similar edible preparations and attract applicable GST rate. 4.8. It is also highlighted that GST Rate for the fruits or tubers [Banana (HSN 0803), Jackfruit (HSN 0810.90.90), Potato (HSN 0701) and tapioca (HSN 0714.90.90)] GST Rate is NIL and they attract 5% GST when sold as ready to eat food preparations. 4.9. Chapter 21 includes items processed out of vegetables like tomato, soya etc., as can be seem from 2103.20.00 (tomato ketchup and other tomato sauces). Therefore a product made out of fruit or vegetable need not necessarily fall under Chapter 20 if they are included under any other chapter by specific inclusion. 4.10. For these amongst other grounds that may be raised and evidence adduced at the time of hearing, it is prayed that Honourable Appellate Authority for Advance Ruling may kindly hold that sharkkaraivaratty, halwa, chips made o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Authority for Advance Ruling is unwarranted for the following reasons:- 4.13.1 Application of Rule 2 was made by disregarding Rule 1 of the General rules of Interpretation. Supplementary Note 6 of Chapter 21 established that chips made from banana, tapioca, jack fruit, potato, chembu, kovakka and povakka and sharkkarai varatty are Namkeens / Sweetmeats and hence classifiable under HSN 2106.90.99. HSN 2008 stipulates that it takes into its fold 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 . It is submitted that the words not elsewhere specified or included is material as Supplementary Note No. 6 of Chapter 21 stipulates that products now under consideration are covered by HSN 2106.90.99. 4.15. Further in para 29 of the judgment in H.P.L. Chemicals Ltd. v. Commissioner of Customs, Chandigarh (2006) 2006 taxmann.com 42 (SC), if Revenue is resorting to a classification different from that of the assessee, burden of proof is on the Revenue. In the impugned order, learned Authority has not adduced any reasons for not cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or any enforceable right in respect of such brand name has been voluntarily foregone, subject to the conditions as specified in the ANNEXURE 6.3. The appellant has relied upon Supplementary Note No. 5 (b) of chapter 21 to claim classification under heading 2106.90, which provides as under: Heading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter alia, includes: (b) preparation for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption . The appellant has contended that Supplementary Note No. 5 (b) of Chapter 21 of Customs Tariff Act states that Heading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter alia includes preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption. Supplementary Note No. 6 of Chapter 21 of Customs Tariff Act states that HSN 2106 90 99 includes sweet meats commonly known Misthans or Mithai or called by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pter 21 of the Customs tariff covers Miscellaneous edible preparations and the relevant entries of heading 2106 are as under: 21.06 - Food preparations not elsewhere specified or included. 2106.10 - Protein concentrates and textured protein substances 2106.90 - other The explanatory notes to the heading 2106 further excludes: (a) preparation made from fruits, nuts or other edible parts of plants of heading 20.08, provided that the essential character that the preparation is given by such fruits, nuts or other edible parts of plants (heading 20.08) Similarly the chapter note 1 to chapter 21 provides as under: 1. - This chapter does not cover: i) Mixed vegetables of heading 07.12; ii) Roasted coffee substitutes containing coffee in any proportion (heading 09.01); iii) Flavored tea (heading 09.02); iv) Spices or other products of heading 09.04 to 09.10; v) Food preparations, other than the products described in heading 21.03 or 21.04, containing more than 20% by weight of sausage, meat, meat offal, blood fish or crustaceans molluscs or other aquatic invertebrates, or any combination thereof (chapter 16); vi) Yeast put up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 0.5 % vol. (f) Vegetables, fruit, nuts and other edible parts of plants prepared or preserved by other processes not provided for in chapter 7, 8 or 11 or elsewhere in the Nomenclature. (g) Products of heading 07.14, 11.05 or 11.06 (other than flour, meal and powder of the products of Chapter 8), which have been prepared or preserved by processes other than those specific in Chapter 7 or 11. (h) Fruit preserved by osmotic dehydration. Further the explanatory notes to heading 2008 reads as follow:- This heading covers fruit, nuts and other edible parts of plants, whether whole, in pieces or crushed, including mixtures thereof, prepared or preserved otherwise than by any of the processes specified in other Chapter or in the preceding headings of this Chapter. It includes, inter alia: (1) Almonds, ground-nuts, areca (or betel) nuts and other nuts, dry-roasted, oil-roasted or fat-roasted, whether or not containing or coated with vegetable oil, salt, flavours, spices or other additives. (2) Peanut butter , consisting of a paste made by grinding roasted ground-nuts, whether or not containing added salt or oil. (3) Fruit (including fruit-peel and seeds) pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other edible parts of plants transformed into sugar confectionery (including those based on natural honey), of heading 17.04. The heading further excludes mixtures of plants, parts of plants, seeds or fruit (whole, cut crushed, ground or powdered of spices falling in different Chapters (e.g., Chapters 7, 9, 11, 12) not consumed as such, but of a kind used either directly for flavouring beverage or for preparing extracts for the manufacture of beverages (Chapter 9 or heading 21.06). 6.8. Further the entry at Sl. No. 40 of Schedule II to Notification No. 1/20017-CT (rate) dated 28.06.2017 read as follows: Sl. No. Chapter/ heading/ sub-heading /Tariff item Description of goods 40 2008 Fruits, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirits, not elsewhere specified or included; such as Ground nuts, Cashew nuts, roasted, salted or roasted and salted, Other roasted nuts and seeds, squash of mango, lemon, Orange, Pineapple or other fruits. 6.9. It is noticed that as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other edible parts of plants, whether whole, in pieces or crushed, including mixtures thereof, prepared or preserved otherwise than by any of the processes specified in other Chapters or in the preceding headings of this Chapter. When according to chapter notes and description of tariff items, the products are classifiable under specific headings of Chapter 20, they cannot be classified under Heading 2106 as food preparations not elsewhere specified or included or under Chapter 8 as claimed by the appellant. 6.11. The appellant had raised a contention that Application of rule 2(a) of the general rule of interpretation of the import tariff by the learned authority for advance ruling is unwarranted. In this regard, reference is made to the provisions of Notification 1/2017 CT (rate) dated 28-6-2017 which specifies about tax rate of goods and classification applicable to them. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise 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. 6.13. By applying the rules for interpretation of the tariff, specially rule 1, 2 and 3 of the same, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifiable under item number 2005 20 00 of chapter 20 hence eligible for exception under notification issued under Central Excise Tariff Act 1985. Further, the contention of the departments of classify same under heading 2106 90 99 was not held appropriate as against heading 2005 20 00 as far as classification is concerned. This instead re-enforces the decision taken in this case by the lower authority. 6.15. Moreover, we rely upon the following case laws: (1) Hon'ble Supreme Court in the case of CCE v. Jayant Oil Mills Pvt. Ltd. reported in 1989 (40) E.L.T. 287 (S.C.) observed, inter alia, as follows; It is well settled that resort could not be had to the residuary item if the product comes within the ambit of any other tariff item. (2) In the case of Western India Plywoods Ltd. v. Collector of Customs reported in 2005 (188) E.L.T. 365 S.C. the Hon'ble Supreme Court, inter alia, held that; Application of residuary item only when no other heading expressly or by necessary implication applies. (3) In the case of Commissioner of Central Excise v. M/s. Wockhardt Life Sciences Ltd. reported in 2012 (277) E.L.T. 299 (S.C.); the Hon'ble Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the appellant are rejected being not tenable and impugned goods viz. Jackfruit Chips, Banana Chips, Tapoica Chips, Potato Chips, Chembu Chips and Pavakka Chips (Bittergourd) (Whether salted/ masala or otherwise) are held 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 under Chapter 20 that covers the products. Accordingly, roasted /salted / roasted and salted Cashew nuts are held classifiable under Tariff Heading 2008 19 10, and other roasted/ salted / roasted and salted nuts and seeds are classifiable under 2008 19 20 of the Customs Tariff Act, 1975. 6.18. In the light of the discussion above, it can be seen that the impugned products are classifiable under different Tariff Items of Heading 2008 of Chapter 20 of the Customs Tariff Act, 1975. Regarding rate of GST applicable to the said goods, the entry at Sl. No. 40 of Schedule II of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017 read as follow; Sl. No. Chapter/ Heading / Sub-Heading / Tariff Item D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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