2021 (12) TMI 373 - AAAR - GST

Appellate Authority Upholds GST Classification for 'Poultry Meal'

In Re: M/s. Sushi Pet Nutri science

The Appellate Authority upheld the classification of 'poultry meal' under Tariff Item No. 2301 10 10 of the Customs Tariff Act, 1975, as 'Meat meals and ... Classification of goods - poultry meal - classifiable under Chapter Sub Heading No. 2301 10 90 of the first schedule to the Customs Tariff Act, 1975 or under Chapter Subheading No. 1501 90 of the first schedule to the Customs Tariff Act, 1975? - applicability of Sl.No. 103 of the Schedule-I of the Not No.01/2017-CT (R) dated 28.06.2017 or entry No.19 of the Schedule-II of the Not. No. 01/2017-CT (R) dated 28.06.2017? HELD THAT:- For classification under Heading 2309 and the sub-headings/Tariff Items thereunder, the goods must be preparations of a kind used in animal feeding: which is admittedly not fulfilled in respect of the impugned poultry meal. The appellant, though stated in the grounds of appeal that the poultry meal is directly edible by animals, however they have not adduced any material to show or substantiate the said position. In terms of Rule 1 of the Interpretative Rules, the “terms of the headings” are the primary and the paramount criterion for classification. Heading 2301 covers “meals., of meat or meat offal” and admittedly the impugned goods are “poultry meal” made from chicken wastages etc. Thus, we find that the appropriate classification is under Tariff Item 2301 10 10 covering “Meat meals and pellets” and not under Tariff Item 2301 10 90 -'Other'. Since 'meat meal' finds a specific mention in 2301 10 10 they will merit classification under this heading as opposed to 2301 10 90 which is a generic entry. Therefore, the lower Authority's ruling to this extent, merits to be modified in accordance with Section 101 (1) of the GST Act. 2017 which specifically empowers modification of the ruling appealed against. The classification of the product “Poultry Meal” is concerned, it is held that the same falls under Heading 2301 of the Customs Tariff (applicable for GST purposes) and in particular, under Tariff Item No. 2301 10 10. Whether the poultry meal is covered by the exemption entry SI.No. 102 of Notification No.2/2017-C.T. (Rate) dated 28.06.2017 as claimed by the appellant or not? - HELD THAT:- The entry refers to both the classification i.e.. Chapter Heading / Subheading / Tariff Item and also specified description, in Col. (2) & (3) respectively. The impugned goods viz., 'Poultry meal' have been held to be classifiable under Heading 2301 of the Customs Tariff. The said Heading figures in Column (2) of the entry No. 102. However, the goods 'poultry meal' does not figure in the list of goods specified by description in Column (3) above. Hence, the poultry meal' is not eligible for the above exemption. Issues involved:1. Classification of the product 'poultry meal.'2. Eligibility for exemption under entry SI.No. 102 of Notification No.2/2017-Central Tax (Rate) dated 28.06.2017.Issue 1: Classification of the product 'poultry meal.'The appellant, M/s. Sushi Pet Nutri Science, challenged the classification of their product 'poultry meal' as determined by the Telangana State Authority for Advance Ruling (AAR). The AAR classified 'poultry meal' under Tariff Item No. 2301 10 90 of the Customs Tariff Act, 1975, attracting a GST rate of 5%. The appellant contended that 'poultry meal' should be classified under Tariff Item No. 2309 90 20 as 'Concentrates for compound animal feed,' which would make it exempt from GST under Entry 102 of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017.The Appellate Authority examined the relevant entries under Heading 2301 and 2309 of the Customs Tariff, the manufacturing process, and the usage of 'poultry meal.' The authority found that the manufacturing process described by the appellant was similar to the process described in the HSN explanatory notes under Heading 2301. The authority concluded that 'poultry meal' meets the description of goods falling under Tariff Item 2301 covering 'meals of meat or meat offal.' The authority also noted that 'poultry meal' is not marketed or sold for direct animal feeding but is supplied to manufacturers of animal feed/aqua feed.The authority rejected the appellant's claim that 'poultry meal' should be classified as 'concentrates' under Heading 2309, as the appellant failed to provide sufficient evidence to support this classification. The authority also noted that the essential characteristics of the original material (chicken wastages) are not lost during the manufacturing process, which is a requirement for classification under Heading 2309.The authority also considered the appellant's reliance on the Hon'ble Tribunal decision in the case of Supreme Suguna Foods Co. Pvt. Ltd. vs CCE, Coimbatore 2015 (316) E.L.T. 341 (Tri. - Chennai). The authority found that the relevant Central Excise Tariff entries under consideration in that case were different from the entries in the subject appeal, making the case distinguishable.Based on the above findings, the authority concluded that the appropriate classification for 'poultry meal' is under Tariff Item No. 2301 10 10 as 'Meat meals and pellets.'Issue 2: Eligibility for exemption under entry SI.No. 102 of Notification No.2/2017-Central Tax (Rate) dated 28.06.2017.The appellant claimed exemption for 'poultry meal' under Entry 102 of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017, which covers 'Aquatic feed including shrimp feed and prawn feed, poultry feed & cattle feed, including grass, hay & straw, supplement & husk of pulses, concentrates & additives, wheat bran & de-oiled cake.'The authority noted that while 'poultry meal' falls under Heading 2301 of the Customs Tariff, it does not figure in the list of goods specified by description in Column (3) of Entry 102. Therefore, 'poultry meal' is not eligible for the exemption.The authority also rejected the appellant's claim that 'poultry meal' should be classified as 'concentrates,' which is included in the exemption entry. The authority reiterated its earlier findings that 'poultry meal' does not qualify as 'concentrates.'The authority addressed the appellant's contention regarding the reliance on the Hon'ble Supreme Court judgment in the case of Dilip Kumar & Company and the TRU Circular dated 31.12.2018. The authority noted that these contentions do not have any bearing on the issue of eligibility for exemption.Order:1. The product 'poultry meal' manufactured and supplied by the appellant falls under Tariff Item No. 2301 10 10 of the Customs Tariff Act, 1975. The impugned order is modified accordingly.2. The product 'poultry meal' manufactured and supplied by the appellant is not eligible for the exemption contained in entry SI.No.102 of Notification No.2/2017-Central Tax (Rate) dated 28.06.2017 (as amended).The subject appeal is disposed of accordingly.