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TMI Blog2022 (12) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... The impugned product (which is semi solid in nature) is definitely a 'Sugar Confectionery' but cannot be termed as a Sugar Boiled Confectionery - the impugned product cannot be considered as a Sugar Boiled Confectionery and there fore the Sr. No. 32 AA (Schedule II) of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017 is not applicable to the said product - the impugned product is Sugar Confectionery the said product falls under Sr. No. 12 of Schedule III of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017 attracting GST rate of 18%. The impugned product i.e. Glaze Gels is covered under Chapter 1704 9090 i.e. Others, of the GST Tariff and falls under Sr. No. 12 of Schedule III of Notification No. 01/2017 - Central Tax (Rate) dated 28.06.2017 as amended from time to time, attracting 18% GST. - GST-ARA-06/2022-23/B-113 - - - Dated:- 1-12-2022 - SHRI. M. RAMMOHAN RAO, AND SHRI. T. R. RAMNANI, JOINT MEMBER No. GST-ARA-06/2022-23/B-113, Mumbai, dt. 01/12/2022 PROCEEDINGS (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39; i.e. the impugned product called 'GLAZE GELS'. Glaze gels also employ same ingredients, formulations same processes (i.e., 'BOILING') also employs similar equipment's to manufacture the Glaze gels which is a format of 'Sugar Boiled Confectionery'. 2.5 Impugned Product has ingredients, formulations, processes which are similar (not same) to ingredients/formulations/processes employed with what is traditionally classed as 'SBC'. 2.6 Impugned Product is Same as 'SBC' save for the modified rheology of 'GLAZE GELS' in as much as 'SBC' in some embodiment may be totally Brittle and/or hard and solid, but may equally not be 'Brittle Hard' and solid but be 'hard chewy' /chewy/soft chewy/soft, whereas the impugned product is 'semi solid' to confirm to the need of the confectionery industry to have a pliable 'SBC'; for example, one embodiment of SBC which is 'filled hard candy' and the filling for such candies is a 'semi-solid gel type mass', and the formulation of which, that of the hard crust and the inside semi-solid part essentially remains the same save for the differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essential character should be of 'sugars' (Such as sucrose, glucose etc.) B] It should have undergone 'boiling' process. In the present context of 'Sugar boiled', mere boiling of water with sugars suffices, as any other qualification is absent. C] It should be a 'preparation' or an 'item' and as sugar is employed it shall mean a sweet preparation/item. It is informative to note here, that the verb form of the noun' confectionery' is CONFECT which means: confect Verb confected; confecting; confects Definition of confect transitive verb 1: to put together from varied material 2a: PREPARE b: PRESERVE (Source: Copy paste from- Webster Merriam Online Dictionary) Hence the word 'confectionery' shall mean a preparation with mixtures of ingredients which shall form a PRODUCT/ITEM. The tariff item may be interpreted to mean as such 2.11 A PREPARATION /PRODUCT WHOSE ESSENTIAL CHARACTER IS SUGARS, WATER ALLIED INGREDIENTS WHICH IS MANUFACTURED SOLELY EMPLOYING A BOILING or AKIN to BOILING PROCESS, where the said boiling process enables the sugars to undertake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d - Water along with sugars is an essential ingredient. Classification of Glaze gel. 2.16 The impugned product conforms to the minimum requirement of specification of ISI 1008:2004 for SBC does not exceed any requirement of ISI 1008:2004 as far as ingredients and processes of SBC are concerned and is therefore a reflection of 'sugar boiled confectionery' with slightly enhanced moisture to induce pliability. 2.17 Impugned product follows requirement of the essential 'boiling process' as enumerated in ISI 1008:2004 for SBC seeks to provide the same gratification to target consumers adapted to confectionery industry in this format. 2.18 Without prejudice to the above, even if the impugned Product is considered a JELLY, specifically a NON-FRUIT JELLY, it still retains the embodiments of 'SBC' as can be deduced from ISI 1008:2004. The essential character of the impugned product is boiled sugars hence it shall be classified as 'SBC'. The impugned product does not pose to be an alternative to 'SBC', but purports to be a type of 'SBC' save for added functionality of enjoying pliability by retention of additional moisture i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thing submitted anywhere, Applicant submits that even if a common Parlance test is undertaken, impugned product will pass the test as in any sample size of testers. Majority shall feel that orange glaze gel and orange candy (SBC) are akin in taste and experience as orange candy is a well settled type of 'SBC'. 2.24 Further, Trade Parlance Test shall be of no benefit and is not appropriate test at arriving at the correct classification of the impugned product, as the term 'SBC' is a barely known term if not altogether unknown in the Bakery Industry, which is the target market for Applicants Product usage of the tariff entry 'SBC' in the Bakery trade is absent. The Trade does not use the term SBC to denote to GLAZE GELS or for that matter, for any of the traditional embodiments of SBC. If the trade requires a particular embodiment of SBC, the Trade uses the nomenclature of the sub category but never the term SBC. 2.25 The term SBC is not a term used in general trade is solely used by manufacturers sometimes on their label declarations and that too merely to assert their claim of being a participant in the tariff item 'SBC'. In the Indian Cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible oil is correct and, therefore, the appellant is entitled to benefit of reduced rate of 4%.' EDIBLE OIL is 100% Lipid-oils; i.e., it is 100% moisture free and does not contain a drop of water or any other soluble matter whereas MARGARINE and its embodiments are a mixture of a] edible oil (60%-80%), b] water (20%-40%) and c] Additionally contains -Milk Powder/Proteins, Colours, Flavours, Stabilizers, Emulsifiers, salt etc. Margarine was held to be edible oil, as the essential character and main ingredient of Margarine is edible oil inspite of Margarine containing a mix of oil, water, milk powder, emulsifiers, stabilizers, salt, colours, flavours. 2.31 The ratio of the above judgment is congruent to the letter and spirit to demonstrate 'whether glaze gels is essentially boiled sugar preparation and the applicant has no hesitation is submitting that GLAZE GEL is nothing but 'Boiled Sugar Confectionery' 2.32 Applicant further applies the Test of Ejusdem Generis to read in conjunction with the Judgement of Aluva Sugar Agency v State of Kerala (2011, sept 7) vis a vis the submission in para 2.29 above. In Maharashtra University of Healt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollows. [4.1] Sr no .32AA. -1704 - Sugar boiled confectionery 6% (Schedule 2) (Exhibit-1). [4.2] Sr no 12. 1704 Sugar confectionery 9% (schedule 3) [other than mishri, batasha, bura, sakar, khadi sakar, harda, sakariya, gatta, kuliya, elaichidana, lukumdana, chikkis like puffed rice chikki, peanut chikki, sesame chikki, til chikki, til patti, til revdi, sugar makhana, groundnut sweets, gajak and sugar boiled confectionery ] (Exh 6) Application of GIR rules in sequence as prescribed:- [1] RULE 1: GLAZE GEL is not classifiable in neither chapter heading 1704 - Schedule 2 and 3, as the name GLAZE GELS does not appear EXPLICITLY in any of the two entries respectively and hence does not confirm to RULE 1 [2] RULE 2A: GLAZE GEL is not classifiable in neither chapter heading _ schedule 2 or 3 as glaze gels are not in unfinished, incomplete, unassembled /disassembled format, but are finished products and hence does not confirm to RULE 2A [3] RULE 2B: GLAZE GELS are classifiable in both chapter heading 1704-schedule 2 and 3 as both entries pertain to and contain 'sugar confectionery' and as the ingredients of GLAZE GELS matches with both the entrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any other standards which may be brought forward or recourse is taken to any other material. It is well settled that fiscal statutes should be read in a restrictive sense as to the written word and letter. Various Judgements of the Apex Court proscribe attribution of meanings and sense to taxation statutes apart from what is apparent from the construction of the given text. [9] The Applicant submits that any product which meets the requirement of,- A] essential character of sugars B] processed using boiling method as an essential cooking process C] is a confection i.e., a preparation, meaning it is 'manmade' and not a naturally occurring item is eligible to be classified under the entry 'sugar boiled confectionery' [10] Applicant thus believes after careful interpretation that GLAZE GELS is nothing but 'SBC' and thus classifiable under schedule II chapter heading 'SBC [11] Without prejudice to any of Applicant submission anywhere Applicant submits that in the event The Revenue asserts that the impugned Product in some parts is a 'sugar confectionery' and in some parts a 'Boiled Sugar confectionery', and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the specific product as enumerated in clause 1 above by the Applicant himself it falls specifically under chapter Heading 1704. 3.3 As the applicant themselves submit that their product has more moisture in the form of water, and their product is of semi-solid consistency and is without fruit juice, in my view there is a specific entry for this product namely Chapter Heading: 1704 9010 --- Jelly confectionery. The applicant submission that their product is of semisolid consistency and is non fruit based will render it a non-fruit based jelly confectionery and in my view the above classification may apply. 3.4 In my view the applicant pleading of classification of their product under Chapter Heading 'Sr.no 32AA in schedule 2 -Sugar Boiled Confectionery' doesn't seems to be acceptable and classification under chapter Heading 17049010 may be considered. 04. HEARING 4.1 Preliminary hearing in the matter was held on 07.06.2022. Shri. Manish Khanna Appeared, and requested for admission of the application. Jurisdictional Officer was absent. The application was admitted and called for final hearing on 30.09.2022. The Authorized representative of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, thickening agents, colours and flavours and the said product is a Non Fruit sugar based product liable to fall under Chapter 17 of GST Tariff and by nature of the specific product as enumerated by the Applicant itself, it falls specifically under chapter Heading 1704. 5.4.2 As per the jurisdictional officer, since the impugned product has more moisture in the form of water, and is of semi-solid consistency and without fruit juice, there is a specific entry for this product as under: Chapter Heading 1704 9010--Jelly confectionery. Hence, applicant's pleading for classification of their product under Chapter Heading 'Sr.no 32AA in schedule 2 -Sugar Boiled Confectionery' doesn't seems to be acceptable and classification under chapter Heading 17049010 may be considered. 5.5.1 'Sugar Confectionery' as the name suggests is nothing but confectionery which is rich in sugars. In the subject case we find that the product is a 'Sugar Confectionery', a fact accepted by both, the applicant as well as the departmental officer, the only difference being that, while the applicant submits that the impugned product (which is semi solid in nature) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... states that the impugned product is a semi solid mass and since the impugned product is a type of confectionery made of sugar, we agree with the applicant's contention that the impugned product falls under Chapter Heading 17.04, which covers 'Sugar Confectionery (including white chocolate), not containing cocoa. 5.8 As per Sr. No. 12 of Schedule III of Notification No. 01/2017 - Central Tax (Rate) dated 28.06.2017, 'Sugar confectionery (excluding white chocolate and bubble / chewing gum) [other than bura, batasha]' falling under Chapter Heading 1704 attracted GST at 18%. Sr. No. 12 was amended vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017 and the amended version read as follows : Sugar confectionery [other than mishri, batasha, bura, sakar, khadi sakar, harda, sakariya, gatta, kuliya, elaichidana, lukumdana, chikkis like puffed rice chikki, peanut chikki, sesame chikki, til chikki, til patti, til revdi, sugar makhana, groundnut sweets and gajak] . Further vide Notification No. 06/2018 dated 25.01.2018 amendment was carried out to Sr. No. 12 as follows: Sugar confectionery [other than mishri, batasha, bura, sakar, khadi saka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 --- Boiled Sweets, whether or not filled.... 1704 90 30 --- Toffees, caramels and similar sweets.... 1704 90 90 --- Other. 5.11.2 We observe that the impugned product cannot be treated as chewing gum, boiled sweets, toffees, caramels etc. As per the definition in Britannica, Jelly is a semi-transparent confection consisting of the strained juice of various fruits or vegetables , singly or in combination, sweetened, boiled, slowly simmered, and congealed, often with the aid of pectin , gelatin , or a similar substance . Congealment, which is a very important property of Jelly, is usually achieved by using pectin, gelatin or any similar substance and from the submissions made by the applicant, it is clear that the impugned product is semi solid in nature and is not congealed and it is also seen that there is no usage of congealing agencies like pectin, gelatin or similar substances. Therefore we are of the opinion that the impugned product cannot be considered as a Jelly Confectionery and accordingly we disagree with the submissions made by the jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X
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