2020 (6) TMI 183

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....i & dosa batter, Parotas, Chapatis, curd, paneer, whole wheat parota and Malabar parota. The instant application pertains to classification of whole-wheat parota & Malabar parota and the question for which advance ruling is sought is as under: Whether the preparation of Whole Wheat parota and Malabar parota be classified under Chapter heading 1905, attracting GST at the rate of 5%? Admissibility of the application: The question is about classification of the goods and hence is admissible under Section 97(2)(a) of the CGST Act 2017. 3. Applicant's interpretation of Law: The Applicant stated that the product Whole Wheat parota and Malabar (refined floor) parota is available in ambient and frozen form with a shelf life of minimum 3 days and maximum 7 days. The applicant supplies the product to distributors, retailers and other foodservice operators located in India and overseas. The product consists the ingredients of refined wheat flour (maida), RO purified water, edible vegetable oil, edible vegetable fat & edible vegetable salt. After adding all the ingredients, the product will be subjected to heat treatment on a pan or tawa, for making it available for consumpti....

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.... as under: This chapter covers a number of preparations, generally used for food, which are made of either directly from the cereals of chapter i.e. from the products of chapter 11 or from food floor, meal and powder of vegetable origin of other Chapters (cereal flour, groats and meal, starch, fruits or vegetable flour, meal and powder) or from the goods of headings 0401 to 0404. The chapter also covers pastrycook's products and biscuits, even when not containing flour, starch or other cereal products. ..................................." 5. The explanatory notes also provides that the expression 'provided such headings or notes do not otherwise require' is intended to make it clear that the terms of the heading and any relative section or chapter notes are paramount i.e. they are the first consideration in determining classification. In the instant case, the cereal used for making the product is wheat, falling under chapter 10 and wheat flour & maida flour falls under chapter 11. Further the product requires cooking before consumption. Accordingly, on combined reading of general rules of interpretation & explanatory notes with respect to chapter 19, the rel....

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....arding classification of commodities under Customs Tariff / Central Excise Tariff are equally applicable and have precedent value in relation to classification of goods under GST Tariff/ Rate Schedule, which are aligned and based on the HSN. iii. The applicant contends that it has been consistently held by courts that application of residuary item can be resorted to only when it is not possible to classify the goods under specific entries in the tariff. The applicant places reliance on the following judgements. a. CCE vs Jayant Oil Mills Pvt. Ltd., 1989 (40) ELT 287 (SC) = 1989 (3) TMI 132 - SUPREME COURT b. Dunlop India Ltd., & Madras Rubber Factory Ltd., Vs Union of India and others 1983 (13) ELT 1566 (SC) = 1975 (10) TMI 94 - SUPREME COURT c. Bharat Forge and Press Industries (P) Ltd., Vs CCE, Baroda 1990 (45) ELT 525 (SC) = 1990 (1) TMI 70 - SUPREME COURT d. CCE vs Wockhard Life Sciences Ltd., 2012 (277) ELT 299 (SC) = 2012 (3) TMI 40 - SUPREME COURT In view of the above, the applicant contends that the product whole-wheat parota and Malabar (refined flour) parota, in sum and substance akin to 'Roti' and are manufactured / prepare....

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....hapter" shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), and explanation (iv), which stipulates that the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. 8.6 The applicant contended that as per General Chapter Note in Chapter 19, the product falls under Chapter heading 1905 since it is made from cereals of chapter 11 or from food flour of other Chapters (including cereal flour). They further rely upon General Rules of Interpretation to state that since Chapter 19 specifically mentions, "Preparation of Cereals, flour the product should fall under Chapter Heading 1905. Lastly they contend that the product should not be classified under the residual entry at Sr. No. 453 of the 3rd Schedule of Notification No. 01/2017-CT (R) dated 28.06.2017 since the product merits classification under Chapter Heading 1905. 8.7 The applicant contended that their products merit c....

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....d that they are not covered by any other heading of the Nomenclature. In the instant case the impugned goods i.e. 'parota' are not covered under any other heading and also need to be processed for human consumption. Therefore the impugned goods are rightly classifiable, more specifically, under heading 2106 90. 8.10 In this regard, to conclude the classification, we draw attention to the General Rules of Interpretation for classification of goods under Schedule I to the Customs Tariff Act 1975, which are as under: 1. The titles of Sections, Chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions: 2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished articles has the essential character of the complete or finished article. It shall also be taken to include a reference to that article compl....

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.... oil, edible common salt and edible vegetable fat, there is no specific entry competing against a general entry (Rule 3 (a)); or has any specific essential characteristic by which we can describe the product (Rule 3 (b)). Rule 3 (c) provides that when goods can't be classifiable under Rule 3(a) or 3(b), then they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. Thus even if the applicant's argument of classification of impugned products under heading 1905 as well as the classification under heading 2106 are considered as two relevant headings, the heading 2106 occurs last in numerical order and hence the heading 2106 would be more appropriate and right classification by virtue of Rule 3(c) supra. 8.11 Now the remaining issue to be discussed, as the classification issue has been resolved, is the applicability of the benefit of entry No.99A of Schedule I to the Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended vide Notification No. 34/2017-Central Tax (Rate) dated 13.10.2017, which specifies the applicable rate of GST as 5%, in respect of the goods covered under heading 1905 or 2106 a....