Specific tariff classification prevails for margarine; industrial and bakery margarine stay outside the concessional edible-oil rate.

Specific tariff classification prevails over a broader edible-oil description where margarine is separately named in the HSN structure. Heading 1517 covers margarine as an edible mixture or preparation of fats or oils, and the six-digit sub-classification excludes only liquid margarine; industrial or bakery margarine therefore remains margarine for rate purposes. A distinction based on composition or end use was rejected, because statutory classification depends on the commodity as enumerated in the tariff and notification, not on how it is used. As a result, all margarine other than liquid margarine is treated under the higher-rate entry rather than the concessional edible-oil entry.

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Issues: Whether industrial or bakery margarine is classifiable as edible oil eligible for the concessional rate under the Third Schedule to the Kerala Value Added Tax Act, or whether all margarine other than liquid margarine falls under entry 64(8) of SRO 82/2006 attracting the higher rate of tax; and whether any distinction can be drawn between table margarine and industrial or bakery margarine for rate purposes.

Analysis: The HSN structure was treated as decisive for classification. Heading 1516 covers animal or vegetable fats and oils and their fractions, including hydrogenated forms, but excludes further prepared products. Heading 1517 specifically covers margarine as an edible mixture or preparation of fats or oils, and the six-digit sub-classification 1517.10 excludes only liquid margarine. The distinction sought on the basis of composition or use was rejected because both table margarine and industrial or bakery margarine remain margarine within the specific tariff entry. The reasoning also applied the principle that the relevant question is the statutory classification of the commodity and not its end use, and the earlier authorities were read as supporting the conclusion that margarine is separately enumerated under the notification rather than being absorbed within edible oils.

Conclusion: Industrial or bakery margarine is not entitled to treatment as edible oil under the concessional entry. All margarine except liquid margarine is taxable under entry 64(8) at the higher rate, and no separate rate can be claimed for industrial or bakery margarine.

Final Conclusion: The writ petitions failed on the rate-of-tax question and the assessment and penalty orders were sustained, while other limited issues relating to procedure or quantum were left open.

Ratio Decidendi: Where the tariff schedule and notification specifically classify a commodity by name, that specific entry prevails over a broader edible-oil entry, and end-use based distinction cannot be used to alter the statutory classification.

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