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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 ..... 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 including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingle Judge is set aside - Appeal allowed. - THE HONOURABLE MR. JUSTICE S.S. SUNDAR AND THE HONOURABLE MR. JUSTICE D. BHARATHA CHAKRAVARTHY For the Appellant : Mr. AR.L. Sundaresan Additional Solicitor General of India assisted by Mr. N. Dilip Kumar Senior Standing Counsel for Central Excise in all Writ Appeals For the Respondent : Mr. Joseph Prabhakar in all Writ Appeals COMMON JUDGMENT (Judgment was delivered by S.S. SUNDAR, J.) Since common issues arise for consideration in all these writ appeals and writ petitions, all these writ appeals and writ petitions are disposed of by this common judgment. 2. The petitioners in all these four writ petitions are manufacturers of fish meal in powder form. The respondent in all these writ appeals are also manufacturers of fish meal (in powder form) . The respondent in all the writ appeals have earlier filed writ petitions in W.P. Nos. 16770, 16772, 16773, 16775 and 16776 of 2019 for issuance of a Writ of Certiorari to call for the records in relation to the proceedings of the 1st appellant, namely, the Circular issued by the Central Board of Indirect Taxes and Customs, New Delhi, dated 31.12.2018, insofar as it relates to Paragraph No. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers 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/Hearing/Subheading/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifications. 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 the Commissioner of Customs (Import), Mumbai v. Dilip Kumar [2018 (361) E.L.T. 577] has laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents 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 background, it is quite evident that the intention of the legislature is to grant exemption for Aquatic Feed such as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and it was never the intention of the GST Council to exempt fish meal from GST, as fish meal in powder form unfit for human consumption falls only under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 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 appeal and respondents in the writ petitions, referred to the chronology of events and submitted that, as per Article 279-A of the amended Constitution, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted 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 if there is any discrepancy. Learned Additional Solicitor General pointed out all the writ petitioners have classified and self assessed their goods only und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding 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 is available only to the Government when it is necessary in the public interest and that by the impugned Circular, the exemption granted to the petitioners' product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Notification 1 of 2017, which relates to Chapter Heading 2301 contains goods with the following description : Flours, meals and pellets, of meat or meat offal, of fish or of crustaceans, molluscs or other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Notification No. 2 of 2017. When Sl. No. 102 of Notification No. 2 of 2017 refers to description of goods which are exempted from GST, inclusion of Tariff Heading 2301 in both notifications requires a clarific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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 included only under Tariff Heading 2301. Therefore, the observation of learned Single Judge that fish meal in powder form comes under two Tariff Headings, namely 2301 and 2309, is not warranted, especially when it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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