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TMI Blog2023 (11) TMI 1302X X X X Extracts X X X X X X X X Extracts X X X X ..... fall under Tariff Heading 2301 which is found in Sl. No. 103 of Notification 1 of 2017. Therefore, the product manufactured by the writ petitioners is not exempted and it attracts GST of 5%. Since all goods with the description including fish meal under Heading 2301 attract GST of 5%, the petitioners cannot dispute the fact that products manufactured by them attract GST of 5% but for the Notification No. 2/2017 dated 28.06.2017. Therefore, even according to the petitioners, but for Notification No. 2/2017 dated 28.06.2017 along with corrigendum, they are liable to pay GST of 5% for the products manufactured by them. By issuance of corrigendum dated 27.07.2017, the Tariff Heading 2301 was also included in the exemption notification dated 28.06.2017 for the first time. However, the description of goods in Notification No. 2/2017 dated 28.06.2017 is not changed. From the description of goods in Tariff Heading in Sl. No. 102 as per the Notification No. 2/2017 dated 28.06.2017, this Court is unable to accept the contention of the learned counsel for the writ petitioners that the product manufactured by the writ petitioners would also come under the description of goods aquatic feed inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is set aside - Appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners in all the writ petitions. 7. GST was introduced in India with effect from 01.07.2017. Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 was issued notifying the rates of GST for all the goods. Schedule 1 of the Notification refers to Tariff Item/Heading and the Description of Goods which attracts 2.5% of Central Tax. Sl. No. 103 of Schedule 1 of the said notification contains the following details : S.No. Chapter/Hearing/Subheading/ Tariff Item Description of Goods 103 2301 Flours, meals and pellets, of meat or meat offal, of fish or of crustaceans, molluscs or other aquatic invertebrates, unfit for human consumption, greaves From the notification, it is seen that Sl. No. 103 of the notification would attract GST of 5%. 8. In exercise of powers under Section 11 of the Central Goods and Services Tax Act, 2017 ("CGST Act" for brevity), Notification No. 2/2017- Central Tax (Rate), dated 28.06.2017, was issued granting exemption for goods, the description of which is specified in Column 3 of the Schedule to Notification No. 2/2017. The entry relating to Sl. No. 102 with Tariff Items, Subheading and Description of Goods reads as follows : S.No. Chapter/He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification dispute here is between the following two entries in the two notifications. The details are as under : Notification Tariff Line Description Rate S.No.102 of notification No. 2/2017-Central Tax (Rate) dated 28.06.2017 2301, 2302, 2308, 2309 Aquatic feed including shrimp feed and prawn feed, poultry feed & cattle feed, including grss, hay & straw, supplement & husk of pulses, concentrates & additives, wheat bran & de-oiled cake. NIL S.No.103 of notification No. 1/2017-Central Tax (Rate), dated 28.06.2017 2301 Flours, meals and pellets, of meat or meat offal, of fish or of crustaceans, molluscs or other aquatic invertebrates, unfit for human consumption, greaves 5% 4.2. A number of raw materials such as fish meal falling under heading 2301, meat and bone meal also falling under heading 2301, oil cakes of various oil seeds, soya seeds, bran, sharps, residue of starch and all other goods falling under headings 2302, 2303, 2304, etc. are used to manufacture/formulation of, aquatic feed, animal feed, cattle feed, poultry feed, etc. These raw materials/inputs cannot be directly used for feeding animal and cattle. The Larger Bench of the Hon'ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used as aquatic feed, even though fish meal is used for manufacture of aquatic feed as one of the ingredients of aquatic feed. 15. On the above factual premises, the petitioners have raised the following grounds : A) "It is submitted that fresh fish was exempt from Central Excise Duty and VAT before introduction of GST on 01.07.2017. Similarly, Aquatic Feed like Shrimp Feed and Prawn Feed were also exempt from Central Excise Duty and VAT all along, before introduction of GST on 01.07.2017. Admittedly, Fish Meal is the principal and primary raw material both in terms of physical composition and in terms of value, for manufacture of aquatic feed like shrimp feed and prawn feed. B) Post GST, fresh fish continues to be exempt from GST. Further, exemption has been granted for Aquatic Feed under GST in terms of Entry Sl. No. 102 of Notification 2/2017 dated 28.06.2017 (as corrected by corrigendum and as amended). More importantly, items such as feed supplements, feed additives and concentrates used in the manufacture of Aquatic Feed also continue to be unconditionally exempt under the GST regime by virtue of Entry Sl. No. 102 of Notification 2/2017 dated 28.06.2017. C) In this bac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 31.12.2018 is liable to be quashed." 16. A detailed counter affidavit was filed by the appellants in all the first batch of writ petitions. The case of the appellants who are the respondents in these writ petitions is that the goods manufactured by the petitioners, if cleared as a prepared aquatic feed, can be given exemption along with shrimp feed, prawn feed, poultry feed and cattle feed; and that, the fish meal manufactured by the petitioners which is not cleared as animal/aquatic/poultry/cattle feed are not exempted. It was pointed out in the counter affidavit that fish meal found under the Heading 2301 attracts GST of 5% and it is intact. Since fish meal as an ingredient is not found in the exemption notification, it is stated that the exemption is available only to aquatic feed including shrimp feed, prawn feed, poultry feed and cattle feed, etc., and the product manufactured by the petitioners is not exempted. In the counter affidavit, a distinction was made between the "additives or supplements" and "raw material" for the manufacture of good which are brought under the Heading 2302. In the counter affidavit, it is pointed out that the notifications are very clear an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets of fish unfit for human consumption is also exempted. In other words, learned Single Judge held that fish meal in the form of finished product used for feeding the fish and prawn, etc., and fish meal in powder form are exempted. Learned Judge observed that fish meal would not lose its character merely because it is used as a raw material in industries to prepare animal feed. 19. The learned Single Judge then considered the scope of Section 168 of the Central Goods and Services Tax Act, 2017 and held that the exemption granted by the previous Notification cannot be taken away or done away by issuing clarificatory Circular. In other words, it was held by the learned Single Judge that the impugned clarificatory Circular cannot overwrite the exemption provided under the statutory notifications issued earlier by the Government. The learned Single Judge then dealt with the judgment of the Hon'ble Supreme Court in Dhilip Kumar's case (supra) and held that the said judgment is not germane to the decision of the 2nd appellant to clarify the notification by way of the impugned Circular. 20. Learned Additional Solicitor General appearing for the Revenue/appellants in the writ ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 80/54/2018-GST, dated 31.12.2018. 21. The learned Additional Solicitor General submitted further that the only usage of fish meal, as pointed out and admitted by every petitioner, is just as an ingredient for the manufacture of aquatic feed, poultry feed, etc., and the petitioners have admitted that fish meal is not supplied or sold as an aquatic feed. Referring to the further fact that the fish meal is not included for direct consumption and it is unfit for human consumption, the learned Additional Solicitor General submitted that fish meal manufactured by the petitioners falls only under Sl. No. 103 with Tariff Heading 2301, attracting GST of 5%. 22. The learned Additional Solicitor General relied upon the General Rules for the Interpretation of the Harmonized System. He pointed out that the description of an article or group of articles under the Tariff Heading should be taken as such and one cannot misread any notification issued by GST Council merely on the basis of the Tariff Heading. In other words, referring to the fact that the description of articles has never undergone any change by the exemption notification, the interpretation of the Board should be preferred even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted due to inclusion of Heading 2301 in the exemption notification No. 2/2017 dated 28.06.2017. He also pointed out that the decision of the learned Single Judge holding fish meal manufactured by writ petitioners as a "finished product", is unwarranted and confusing, particularly when the writ petitioners have categorically admitted that fish meal supplied by them is used as a raw material and not as a finished product or as a feed. The learned Additional Solicitor General stated that fish meal, which is not being used as a feed or is not used as an aquatic feed or prawn feed, cannot be taken as a finished product. 25. The learned Additional Solicitor General also relied upon the judgment of the Hon'ble Supreme Court in State of Maharashtra v. Shri Vile Parle Kelvani Mandal and others reported in (2022) 2 SCC 725 for the proposition that the assessee cannot rely on ambiguity or doubt to claim benefit of exemption. 26. As against the submissions of the learned Additional Solicitor General, the learned counsel appearing for the respondents in the writ appeals as well the writ petitioners which are clubbed along with the writ appeals, submitted that the power to grant exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as an essential ingredient in aquatic feed. The learned counsel appearing for the writ petitioners further pointed out that the aquatic feed cannot be manufactured without fish meal, since its mineral profile and marine protein content is so vital for the feed. 29. This Court heard the learned Additional Solicitor General appearing for the appellants/Revenue at length and the learned counsel appearing for the writ petitioners in all these batch of cases. 30. From the writ petitions, it is clear that the writ petitioners in all these cases have admitted in unequivocal terms that they are manufacturing "fish meal (in powder form)" and they sell fish meal in the powder form to aquatic feed or prawn feed manufacturers. 31. After the corrigendum pursuant to the Notification No. 2/2017 dated 28.06.2017, the entry in Sl. No. 102 is seen from the following table : S.No. Chapter/Hearing/ Sub-heading/Tariff Item Description of Goods 102 2301, 2302, 2308, 2309 Aquatic feed including shrimp feed and prawn feed, poultry feed & cattle feed, including grss, hay & straw, supplement & husk of pulses, concentrates & additives, wheat bran & de-oiled cake. Whereas, Sl. No. 103 of Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) of the Schedule. Therefore, even in the absence of any clarification, it cannot be said that the product manufactured by writ petitioners, namely fish meal in powder form, unfit for human consumption, is entitled to exemption. Broadly, from the description of goods in Tariff Heading in Sl. No. 102 as per the Notification No. 2/2017 dated 28.06.2017, this Court is unable to accept the contention of the learned counsel for the writ petitioners that the product manufactured by the writ petitioners would also come under the description of goods "aquatic feed including shrimp feed or prawn feed or poultry feed, etc.", as it is admitted that the petitioners' product is not used as an aquatic feed and it is being supplied to the manufacturers of aquatic feed. 32. This Court is unable to discard the submissions of the learned Additional Solicitor General appearing for the Revenue regarding the classification of goods and the nomenclature as per the principles found in the General Rules for the Interpretation. From the reading of the two notifications, fish meal, unfit for human consumption, is found only in Sl. No. 103 of Notification No. 1 of 2017 and not found in Sl. No. 102 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading 2301, it is rather improbable to accept the submissions of the learned counsel appearing for the writ petitioners for the proposition that the fish meal in powder form, manufactured by the writ petitioners which is found in Sl. No. 103 of Notification No. 1 of 2017 is exempted from GST. Such an interpretation would be quite contrary to the plain language employed in the notifications which is unambiguous to denote that tax is levied only on the goods as shown in Column (3) of Schedule. Since Tariff Heading 2301 is also specified in the notification giving exemption to certain goods, a clarification is required. It is to be noted that Tariff Heading 2301 specifically refers to fish meal, unfit for human consumption, in powder form, which is manufactured by writ petitioners. The learned Single Judge failed to consider the position that the levy of duty or exemption is only in respect of goods specified in Column (3) of Schedule and the goods which are not given by description cannot be assumed or included in the exemption notification. It is true that fish meal in powdered form comes under Tariff Heading 2306 is exempted. When it is unfit for human consumption, it can be inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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