Papad classification turns on ingredients and market identity, but ready-to-eat fried papad remains taxable without exemption.

Fried papad of different shapes and sizes was treated as papad for tariff classification because ingredients, manufacturing process, use and market identity were decisive, and shape alone was not controlling. Applying the common parlance test and the principle that a specific heading prevails over a residuary heading, the product was classified under Tariff Item 1905 90 40 rather than 2106 90 99. However, the exemption in Entry 96 of Notification No. 02/2017-Central Tax (Rate) was limited to papad in ready-to-cook form, so ready-to-eat fried, masala-coated papad did not qualify for exemption and attracted GST at 18%.

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Issues: Whether fried papad of different shapes and sizes is classifiable under Tariff Item 1905 90 40 of the Customs Tariff Act, 1975 as papad and, if so, whether it is exempt under Entry No. 96 of Notification No. 02/2017-Central Tax (Rate) dated 28.06.2017, or whether it falls under Tariff Item 2106 90 99 and attracts GST at 18%.

Analysis: The product was examined on the basis of its ingredients, manufacturing process, use, and market identity. The finding was that shape alone is not decisive and that papad may exist in different shapes and sizes in modern manufacture. At the same time, Entry No. 96 was held to cover papad in ready-to-cook form, whereas the product in question was fried, masala-coated, ready-to-eat and capable of being served immediately. Applying the common parlance test and the rule that a specific heading prevails over a residuary heading, the product was held to fall within Tariff Item 1905 90 40 and not under the residuary heading 2106 90 99.

Conclusion: The product is classifiable as papad under Tariff Item 1905 90 40, but it does not qualify for exemption under Entry No. 96 because it is ready-to-eat fried papad. GST at 18% is payable.

Ratio Decidendi: For classification under the Customs Tariff, the decisive factors are the product's ingredients, process, common market identity and specific tariff entry; a ready-to-eat fried product may remain papad for classification purposes, yet still be excluded from the exemption meant for papad supplied in a form requiring further roasting or frying.

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