Margarine classification under VAT turns on specific tariff entries, not ingredient-based reclassification or end-use analysis.

Industrial or bakery margarine is classified as margarine under Entry 64 of SRO 82/2006, not as edible oil under Entry 38(19)(d) of the Third Schedule to the Kerala Value Added Tax Act, 2003. The court preferred the specific HSN-based tariff scheme and the statutory classification structure over reclassification by technical ingredients or end-use, and held that ejusdem generis could not shift the product between distinct entries. It also noted that an earlier Supreme Court ruling under a different statutory regime did not displace the KVAT classification.

---

---

Issues: Whether industrial or bakery margarine is classifiable as edible oil under Entry 38(19)(d) of the Third Schedule to the Kerala Value Added Tax Act, 2003, or as margarine under Entry 64 of SRO 82/2006 liable to tax at the higher rate.

Analysis: Margarine was treated as a separately specified commodity in the notified list, and the Court preferred the statutory tariff classification over attempts to reclassify the product by technical ingredients or end-use. The Court held that the HSN-based scheme under the Customs Tariff Act, 1975, along with the KVAT Act classification structure, showed a legislative intent to keep margarine distinct from the edible oils enumerated in the Third Schedule. It further held that ejusdem generis could not be used to transport margarine from one distinct class of entries to another, and that the earlier Supreme Court decision on a different statutory regime did not displace the classification adopted under the KVAT Act.

Conclusion: Industrial or bakery margarine is not taxable as edible oil under Entry 38(19)(d) of the Third Schedule; it falls under Entry 64 of SRO 82/2006 and is liable at the higher rate of tax.

Final Conclusion: The classification adopted by the assessing authorities was upheld, and the intra-court appeal failed.

Ratio Decidendi: Where a fiscal entry specifically classifies a commodity by reference to an HSN-based tariff entry, the product must be taxed according to that specific classification and cannot be shifted to a different entry by technical analysis or general interpretive aids when the legislative intent is clear.

---