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TMI Blog2024 (10) TMI 1422X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluded in the proposed product to fall under chapter heading 1517. In this regard we find that the appellant has submitted that sugar contains only 1% and premix (emulsifiers, stabilizers, acidity regulators and preservatives) comprises 5.5% if the impugned product. Then the proposed product 'Cream' is a preparation of vegetable fat more specifically covered under 1517 90 90, therefore classifying the same under residuary chapter heading 2106 is not warranted - Since the proposed product is preparation of vegetable oil and does not contain animal fat, therefore GST rate applicable on the proposed product shall be 5% in terms of S. No. 89 of Schedule I to Notification No. 1/2017 - IGST(Rate) dated 28.06.2017. - SH. PRAMOD KUMAR AND DR. NITIN BANSAL, MEMBER Represented by : Sri Kapil Vaish, CA (Passed by the Appellate Authority for Advance Ruling under Section 101 (1) of Uttar Pradesh Goods and Services Tax Act, 2017) At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Uttar Pradesh Goods and Service Tax Act are pari-materia and have the same provisions in like matter and differ from each other only on few ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Rate) dated 28.06.2017. 3.2 Main observation of the authority for ruling out the classification of the proposed product from Chapter 1517 is that after the manufacturing process, individual identity of all the mixtures is lost and what, emerges is totally a different item, a new product having different name, character and use. Thus, said 'Cream' cannot be said to be merely a mixture of vegetable oil with other ingredients, but a totally new product. This observation of the authority is not correct, as the proposed product is a preparation of vegetable oil and adding small quantities of other ingredients such as sugar and premix (emulsifiers, stabilizers, acidity regulators and preservatives) does not change the basic character of the product and it is the vegetable oil that gives the essential character to the product 'Cream'. 3.2 That different ingredients are mixed together to manufacture 'cream' and out of all the ingredients, the content of vegetable oil (comprising of 23%) being higher and essential for manufacture of 'Cream', therefore, it becomes a preparation of vegetable oil. 3.3 That the process of preparation of vegetable oil by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of classification under chapter heading 1517. That there is no exclusion in the chapter notes that by adding sugar and premix (emulsifiers, stabilizers, acidity regulators and preservatives) the final product is not classifiable under chapter heading 1517. 3.5 Because the Authority for advance rulings has erred in classifying the impugned goods under chapter heading 2106 90 99. 3.5.1 That the chapter 21 covers Miscellaneous Edible Preparations and the description to heading 2106 is 'Food preparation not elsewhere specified or included'. Thus, where goods are not specifically mentioned but are covered under the genus inscribed under some other heading, the said goods will not merit classification under heading 2106. Therefore, goods which are neither specifically nor impliedly covered under any other heading alone are to be covered under heading 2106. 3.5.2 That, the Rule 3(a) of General rules of interpretation provides that where the goods are classifiable under two headings, the heading which is specific in nature prevails over the heading which is by its nature general. The Chapter heading 2106 is the residuary entry, whereas, heading 1517 forms the specific ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays from the date of communication of the advance ruling order that is sought to be challenged. As per the Appellant, the advance ruling dated 15.04.2024 was served to them on 06.06.2024 and the instant appeal has been received in the office on 11.07.2024. We find that the proviso to Section 100(2) of CGST Act, 2017, states that- Provided that the Appellate Authority may, if it is satisfied that the appellant was prevented by a sufficient cause from presenting the appeal within the said period of thirty days, allow it to be presented within a further period not exceeding thirty days. 6.2.2 In the instant case, after going through the application of the appellant and in terms of the proviso to Section 100(2) of the CGST Act, 2017, we condone the delay. 6.3 Coming to the issue of Classification of the product in question, the appellant has claimed the classification to be under Chapter Sub-heading No. 1517 or 0402, whereas the Authority for Advance Ruling has held it to be under 2106. To appreciate the issue, the contending entries need consideration and are re-produced as below: Tariff Item Description of Goods 0402 MILK AND CREAM, CONCENTRATED OR CONTAINING ADDED SUGAR OR OTHER SWE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... %, thus, we agree with the findings in the impugned order passed by the Authority that the proposed product does not fall under Chapter Heading 0402. 6.5.1 Next, we observe that Chapter 15 of the Tariff Act covers chapter headings related to Animal, Vegetable or Microbial Fats and Oils and their cleavage products, prepared edible fats, animal or vegetable waxes. Chapter 15 does not cover the edible preparations containing by weight more than 15% of the products of heading 0405 (generally Chapter 21). 6.5.2 We find from the description of the product, as provided by the appellant, that the percentage of edible vegetable fat is 23% and water is 67.3 % whereas, the milk solids (without animal fat) is 3.2%. The other ingredients are sugar (1%) and premix (emulsifiers, stabilizers, acidity regulators and preservatives) being 5.5%. All these ingredients are emulsified in water to make an edible preparation based on vegetable fat. It is clear that the main constituent of the final product i.e. 'Cream' is vegetable fat/oil without which the proposed product will not get its character of fat emulsion. Thus, different ingredients are mixed together to manufacture 'Cream' and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Next, we observe that the Authority in its findings have found that the other ingredients, i.e. sugar and premix (emulsifiers, stabilizers, acidity regulators and preservatives) are not been found mentioned in the HSN explanatory notes in respect of preparations of vegetable oil in the nature of an emulsion of water-in-oil, though it may resemble like a regular cream and it can't be understood to be included in the proposed product to fall under chapter heading 1517. In this regard we find that the appellant has submitted that sugar contains only 1% and premix (emulsifiers, stabilizers, acidity regulators and preservatives) comprises 5.5% if the impugned product. 6.6.2 We find that the HSN explanatory notes of chapter heading 1517 provides that the the products of this heading, the fats or oils of which may previously have been hydrogenated, may be worked emulsification (e.g. with skimmed milk), churning, texturation (modification or the texture or crystalline structure) etc., any may contain small quantities of added lecithin, starch, colouring, flavouring, vitamins, butter or other milk fat (subject to the restriction in Note 1 (c) to this chapter . 6.6.3 We observe that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned product 'Cream' appears appropriately covered under 1517 90 90. 6.8.2 We find that the Chapter heading 2106 covers 'Food preparations not elsewhere specified or included'. Thus, the chapter heading 2106 is a residual entry and covers those miscellaneous edible preparations which are not specifically mentioned or covered under the genus inscribed under some other chapter heading. It seems to cover the food preparations that are ready to be consumed without any further processing. 6.8.3 In view of the foregoing discussions, we find that when the proposed product 'Cream' is a preparation of vegetable fat more specifically covered under 1517 90 90, therefore classifying the same under residuary chapter heading 2106 is not warranted. 6.8.4 Since the proposed product is preparation of vegetable oil and does not contain animal fat, therefore GST rate applicable on the proposed product shall be 5% in terms of S. No. 89 of Schedule I to Notification No. 1/2017 - IGST(Rate) dated 28.06.2017. 7. In view of the foregoing, we make the following order: (i) We set aside the impugned ruling given vide UP ADRG - 01/2024 dated 15.04.2024 passed by the Authority ..... 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