9911796707
TMI Blog2024 (12) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... 'appellant'] against the Advance Ruling No. GUJ/GAAR/R/28/2021 dated 19.7.2021, passed by the Gujarat Authority for Advance Ruling [GAAR]. 3. The facts briefly are that the appellant is engaged in the business of manufacture and supply of the below mentioned fourteen instant mix flours viz Gota mix flour Dakor Gota mix flour Khaman mix flour Methi Gota mix flour Ildi mix flour Handvo mix flour Dalwada mix flour Rava Idli mix flour Dhokla mix flour Medu vada mix flour Dahiwada mix flour Upma mix flour Dosa mix flour Khichu mix flour which as per the applicant are not in 'ready to eat' but in 'ready to cook' form under their registered brand name. 4. Before the GAAR, the appellant submitted that the below mentioned process is undertaken for manufacturing & selling the above products, viz: (a) that they purchase food grains and pulses from open market. (b) that such pulses are sorted and washed and then sent to grinding machine. (c) that pulses are grinded into flour in grinding machine for eg where grams are purchased it results into gram flour by following grinding process. In certain cases, they also purchase grinded flour directly from the vendors. (d) that af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Garam masala powder 10 Handavo Mix Flour Rice flour, Split Bengal gram flour, Split black gram flour, Wheat flour, Iodised salt, Sodium bicarbonate, Citric Acid (E 330), Red chilli powder, Turmeric powder Asafoetida 11 RavaIdli Mix flour Semolina, Vegetable oil, IodisedSalt, Split Bengal Gram, Cashew Nuts, Sodium bicarbonate Mustard Seeds , Curry Leaves, Citric Acid (E 330), Dried Ginger Powder 12 Meduvada Mix Flour Split Black Gram Flour, Refined Wheat Flour, Wheat Flour, Vegetable oil, Iodised Salt, Sodium bicarbonate, Citric Acid (E 330), Semolina, Rice Flour, Asafoetida 13 Upama Mix flour Semolina, Vegetable oil, Split Bengal gram, Split Black gram, Iodised salt , Mustard seeds dried ginger powder, Sugar, Green chilli , Curry leaves, Citric Acid (E 330) ,Asafoetida 14 Khichu Mix flour Rice Flour, Sago Flour, Iodised Salt, Cumin Seeds, Bishop Weed, Sodium Bicarbonate (E500), Red Chilly Powder, Coarse Fenugreek, Coarse Mustard, Asafoaetida 6. The percentage-wise break-up of the flours and other ingredients as submitted before the GAAR, is as under: Sr.No. Product Dried leguminous vegetable flours Rice and wheat flours Total flours Spices and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant mix flour made from dried leguminous vegetable is eligible for classification under 1106; * that they also wish to rely on the decision of GAAR dated 30.7.2020; * that they wish to rely on the circular no. 80/54/2018-GST dated 31.12.2018, which is applicable to them; that the circular is binding in view of the judgement in the case of Dhiren Chemical Industries 2002 (149) ELT 3 SC; * flour sold to customers are ready to cook' form and not in 'ready to cat' form; * that when the product is eligible to be classified under specific entry [1106], general entry should not be preferred [2106]; * that they would like to rely on the case of Wood Polymers Ltd 1998 (97) ELT 193 SC and Miniwool Rock Fibers Ltd. 2012 (278) ELT 581 SC. 9. In view of the foregoing, the appellant raised the following question [reframed vide his amendment application dated 2.9.2020] before the GAAR viz: "The applicant seeks Advance Ruling for classification and determination of rate of tax for following items: Gota Mix Flour, Dakor Gota Mix Flour, Methi Gota Mix Flour, Khaman Mix Flour, Dhokla Mix Flour, Idli Mix Flour, Rava Idli Mix Flour, Dosa Mix Flour, Upma Mix Flour, Dahiwada Mix Flour, Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of wheat and maize, fall under HSN 1102 attracting 5% GST; * that flours of grains and pulses are major components and since grains and pulses fall under 0713, alternately, it would be eligible for classification under HSN 1106; * that mere nixing of flour with spices and condiments does not change its basic characteristic; that flour purchased from flour mills do not contain these spices & condiments & except for this difference, there is no other difference; * that as far as classification under chapter heading 1106 is concerned, they wish to rely on the circular no. 80/54/2018-GST dated 31.12.2018, which is applicable to them; that the circular is binding in view of the judgement of the Hon'ble SC in the case of Dhiren Chemical Industries, ibid; * that heading 210690 is a general entry and is not capable of including products of the appellant falling under HSN 1106; that in terms of the principle of noscitur a sociis, the product cannot be classified under chapter heading 2106 since even as a general entry it is not capable of including the products of the appellant; * that as far as classification under chapter heading 1102 is concerned, they wish to rely on the VAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is case is regarding proper classification and determination of rate of tax in respect of the fourteen items listed in paragraph 3 above. As is already mentioned supra, GAAR has held that the aforementioned products are to be classified under HSN 2106 90 (Others) attracting 18% GST (9% CGST and 9% SGST). 16. We find that the appellant in his averments has stated that the product would fall under 1101, 1102 or 1106. However, in the prayer, the appellant has sought classification under chapter heading 1106. 17. The appellant's primary claim is that their products are in the nature of flours and not instant mix and that it should fall under chapter heading 1102. On going through para 2(A) of the explanatory notes of HSN for Chapter 11, it is observed that the products from the milling of the cereals listed in the table (wheat and rye, barley, oats, maize and grain, sorghum, rice, buckwheat) fall in this chapter if they satisfy some characteristics. Further, in terms of para 2(B) of the explanatory notes of HSN for Chapter 11, products falling in this Chapter under the provisions of para 2(A) shall be classified in heading 11.01 or 11.02, if the percentage passing through a woven met ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is, or beading 19.01 if less). 11.06 Flour, meal and powder of the dried leguminous vegetables of heading 07.13, of sago or of roots or tubers of heading 07.14 or of the products of Chapter 8. 1106.10 - Of the dried leguminous vegetables of heading 07.13 1106.20 - Of sago or of roots or tubers of heading 07.14 1106.30 Of the products of Chapter 8 (A) Flour, meal and powder of the dried leguminous vegetables of heading 07.13. This heading includes the flour, meal and powder made from peas, beans or lentils; they are mainly used for prepared soups or purées. The heading does not cover: (a) Non-defatted soya flour (heading 12.08). (b) Locust bean flour (heading 12.12). (c) Soups and broths (whether in liquid, solid or powder form), with a basis of vegetable flours or meals (heading 21.04). (B) Flour, meal and powder of sago or of roots or tubers of heading 07.14. These products are obtained by the simple grinding or grating of the pith of the sago palm or of the dried roots of the manioc, etc. Some of these products are often subjected to heat treatment in the course of manufacture to eliminate toxic substances; this treatment may entail pregelatinisat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in the table supra in paragraph 6. It is also evident from the recipe submitted by the appellant that the spices and other ingredients have been added to the flours for their use as food preparations. Further, description of the goods under chapter heading 1102, states as follows: "Cereal flours other than that of wheat or meslin". The HSN notes pertaining to chapter heading 1102 also clearly states that the heading covers flours (ie, the pulverised products obtained by milling the cereals of chapter 10) other than flours of wheat or meslin. We find that Gota mix flour, Dakor Gota mix flour, Dos mix flour, Methi Gota mix flour, Handavo mix flour, Menduwada mix flour, contains wheat flour. Thus, in view of the explanatory notes of the HSN, all the fourteen products are excluded from the Chapter Heading 11.02. 19. The next averment of the appellant is that under the VAT determination order, different varieties of flour have been held to be 'flours' falling under entry 12 in Schedule I to GVAT Act & that since there is no substantial change in schedule entries, classification and interpretation adopted needs to be followed. The applicant has also relied on the judgement in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this averment they have relied on the judgement in the case of Wood Polymers Ltd., ibid. We reproduce Rule 3(b) of the GRI, viz 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 classified by reference to 3 (a) or 3 (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said clarification is not applicable in the present case as the products being supplied by the appellant contain spices and other ingredients in proportions which cannot be held to be in very small amounts, which is not the case with the 'Chhatua or Sattu'. 24. In view of the foregoing, we hold that none of the products of the appellant merit classification under Chapter 11 of the Customs Tariff Act, 1975 and specifically under Chapter Headings 1102 or 1106 of the Customs Tariff Act, 1975. 25. The appellant we find has also questioned the classification of the products in question by GAAR under HSN 2106 90, which covers "Food Preparations not elsewhere specified or included". The appellants further averment is that in terms of the principle of noscitur a sociis, [which means that the meaning of the word is to be judged by the company it keeps], their products cannot be equated with "misthan" or "mithai" or 'namkeen' or 'chabena' or 'bhujia'; that it can neither be consumed by human in the form they are sold & are not ready to eat products. We reproduce the HSN explanatory notes [relevant extracts] for the ease of understanding viz 21.06 Food preparations not elsewhere specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hapter Heading 2106 of the CTA, 1975, these products are classifiable under the residuary entry i.e. Tariff Item 2106 90 99 as "Other". 27. The appellant has further also submitted that the Mix Flour / Instant Mix Flour is not a ready-to-eat food. In this regard, we observe that Chapter Heading 21.06 and specifically Tariff Item 2106 90 99 is not confined to processed or semi processed food, cooked or semi cooked food, preserved food and ready to eat food. In fact, any product which is a food preparation and which is not elsewhere specified or included in the CTA, 1975, gets covered under Chapter Heading 2106 of the CTA, 1975. Therefore, merely because the end consumer of the Instant Mix Flour is required to follow certain food preparation processes before such product(s) can be consumed, is no ground to take these products out of Chapter Heading 2106 of the CTA, 1975. 28. The appellant has further relying on the common parlance test submitted that the products are nothing but flours of different type. Reliance has also been made to the judgement of the Hon'ble SC in the case of Delhi Cloth and General Mills Company Limited. Nothing has been produced before us to substantiate the ..... 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