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TMI Blog2022 (10) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... ons seeking advance ruling in the application for Advance Ruling filed by it. "i). Whether the product viz. 'Paratha' i.e. various varieties of Paratha produced by the applicant merit classification under HSN Code 19059090? ii). Whether the product, namely, 'Paratha' i.e. all varieties of Paratha produced by the applicant are chargeable to 5% GST (i.e. 2.5% SGST and 2.5% CGST) under Sl.No. 99A of Schedule-l of Notification No. 01/2017-CT (Rate) and Notification No. 01/2017-IT (Rate) dated 28-6-17?" 4. The appellant has submitted that they are producing eight varieties of Paratha which are Malabar Paratha, Mixed Vegetable Paratha, Onion Paratha, Methi Paratha. Alu Paratha. Laccha Paratha, Mooli Paratha and Plain Paratha; that the principal ingredient of all varieties of Paratha is wheat flour; the Parathas supplied and sold by them in packed condition are to be placed directly on pre-heated flat pan or griddle for being heated on medium flame for about 3-4 minutes and during this period, Paratha is to be flipped after every 30 seconds; the method of cooking is common for all the varieties of Paratha. and also that the principal ingredients for all varieties is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ready for consumption goods, are mentioned at the said entry and there is no mention of Paratha which requires further processing before consumption and therefore the said entry is not applicable to the product Paratha. The GAAR observed that Paratha will be covered under Entry No. 453 of Schedule-III of Notification No. 01/2017-CT (Rate) dated 28.06.2017 for the period from 01.07.2017 to 14.11.2017 and under Entry No. 23 of Schedule-III of Notification No. 01/2017-CT (Rate) dated 28.06.2017 (as amended by Notification No. 41/2017-CT (Rate) dated 14.11.2017) with effect from 15.11.2017 and will be liable to GST @18% (9% SGST+9%CSGT). 6.1 In view of the foregoing, the GAAR ruled as follows:- "i). Whether the product viz. 'Paratha' i.e. various varieties of paratha produced by the applicant merit classification under HSN Code 19059090? Ans. 'Paratha Merits classification at HSN 21069099. ii). Whether the product, namely, Paratha' i.e. all varieties of Paratha produced by the applicant are chargeable to 5% GST (i.e. 2.5% SGST and 2.5% CGST) under SI. No. 99A of Schedule-I of Notification No. 01/2017-CT (Rate) and Notification No. 01/2017-lT (Rate) dated 28-6-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that non inclusion of word Paratha in Heading 1905 does not exclude it from being classified under the same Heading and availing benefit of Entry at 99A of Schedule I of Notification No. 01/2017-CT (Rate). The GAAR should have appreciated the nature of goods akin to the goods mentioned in Heading and that the Heading would only broadly describe the goods falling under it. The GAAR in present case only applied nomenclature test and not given any importance to end user test and how' the product is being consumed by people in general. The end user test and how the product is known in the market and the way it is consumed is an essential test for the purpose of classification as it is undisputed fact that the parathas are similar to Chapatti or Roti and many people consume paratha instead of plain roti or chapatti. Rule 3(b) makes it clear that when there is a mixture of materials, the different materials shall be classified as if they consisted of the material which gives them their essential character and in present case, essential character of paratha is given by wheat flour and therefore Rule 3(b) would be applicable and paratha. item of wheat flour, would be classifia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the product viz. various types of paratha i.e. Malabar Paratha. Mixed Veg Paratha. Onion Paratha. Methi Paratha. Alu Paratha, Laccha Paratha. Mooli Paratha and Plain Paratha having common ingredient as wheat flour varying in composition from 36% to 62% and having other ingredients viz. Water, edible vegetable oil. salt, anti-oxidant etc. These Parathas are sold by appellant in packed and frozen condition and required to be cooked on pan or griddle for-3-4 minutes till the Paratha is golden brown on both sides. The detailed cooking instruction are provided on the packaging of respective Parathas. 11. The appellant in its submission stated that, their product i.e. various types of Parathas is classifiable under Heading 1905 which covers "Bread, pastry, cakes, biscuits and other bakers' wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products" and not under Heading 2106 which covers "Food preparations not elsewhere specified or included" as held by GAAR which is a residual entry. 12. We find that the classification of goods under the GST regime has to be done in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, cheese, fruit, cocoa in any proportion, meat, f.sh, bakery "improvers", etc. Bakery "improvers "serve mainly to facilitate the working of the dough, hasten fermentation, improve the characteristics and appearance of the products and give them better keeping qualities. The products of this heading may also be obtained from a dough based on four, meal or powder of potatoes." From the above and explanatory notes to HSN 1905, it can be easily inferred that above chapter covers preparation of flour, generally used as food, which are made from the products of Chapter 11 and Heading 1905 covers Bread, Pastries, Cakes etc. which are completely cooked and ready for consumption whereas the appellant's product i.e. various types of Parathas require 3-4 minutes of cooking on a pan or griddle before consumption. On this ground, the product in question i.e. various types of Parathas do not merit classification under Heading 1905. 14. The appellant in their grounds of appeal stressed on the point that their product i.e. parathas are akin to roti or chapatti which is classifiable under Heading 1905 and liable to 5% GST by virtue of Entry at 99A of Schedule to Notification No. 01/2017 -Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3. Rule 3: When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general 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 3(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 classi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D OR INCLUDED 2106 10 00 - Protein concentrates and textured protein substances 2106 90 - Other: 0 --- Soft drink concentrates : 2106 90 11 --- Sharbat 2106 90 19 --- Other 2106 90 20 --- Pan masala 2106 90 30 --- Betel nut product known as "Supari" 2106 90 40 --- Sugar-syrups containing added flavouring or colouring matter, not elsewhere specified or included; lactose syrup; glucose syrup and malto dextrine syrup 2106 90 50 --- Compound preparations for making non-alcoholic beverages 2106 90 60 --- Food flavouring material 2106 90 70 --- Churna for pan 2106 90 80 --- Custard powder 0 --- Other : 2106 90 91 -- Diabetic foods 2106 90 92 -- Sterilized or pasteurized millstone 2106 90 99 --- Other 14.5 The supplementary note 5 to Chapter 21 of the Customs Tariff which explains the scope of tariff heading 2106 is as under: "5. Heading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter alia, includes: a. protein concentrates and textured protein substances: b. preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption; c. preparations consist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to cooking instructions mentioned on the packaging of various frozen parathas, as provided by appellant, wherein it is mentioned that "heat on a medium flame for about 3-4 minutes (flipping after every 30 seconds) pressing gently till Paratha is golden brown on both sides". On going through the above, we observe that the above process of 3-4 minutes of heating amounts to cooking of the Parathas as the color of the Parathas changes and the frozen Parathas become ready for consumption. As compared to Roti or Chappati or items falling under Chapter heading 1905 which are ready to eat and does not require any further processing before consumption, the appellant's products have to be cooked before the same can be consumed. 15. The appellant has contended that GAAR had mainly gone on the test of nomenclature and not given any importance to end user test as to how the product is known in the market and the way it is being consumed; that Paratha is similar to roti or chapatti and both are consumed in similar fashion. In this regard we refer to the Supreme Court's judgment in case of CCE Vs Carrier Aircon Ltd [2006 (199) E.L.T. 577 (S.C.)] wherein the apex court has observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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