TaxTMI 
TaxTMI 
2020 (10) TMI 814
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....binding only (a). On the applicant who had sought it in respect of any matter referred to in sub-section (2) of Section 97 for advance ruling; (b). On the concerned officer or the jurisdictional officer in respect of the applicant. 3. Under Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the said advance ruling have changed. 4. Under Section 104 (1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-section (1) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void sb-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act w....
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....tate of Madras and Damodar J. Malpani and Ors Vs. Collector of Central Excise and Bell Mark Tobacco Vs. Government of Madras = 2002 (9) TMI 114 - SUPREME COURT relating to Unmanufactured Chewing Tobacco. * The Lower Authority has stated unrelated facts which confuse the real process undertaken in relation to the Product leading to wrong conclusion. The Lower Authority's discussion about Tobacco curing and about Jaffna Tobacco of Ceylon and chewing Tobacco of Tamil Nadu, are irrelevant to the question on hand. The Lower Authority failed to notice that the product does not undergo any change during the process and thus ought to have held that there is no manufacturing. * The Lower Authority ought to have noticed that Chapter 2403 relates to Manufactured Tobacco while 2401 relates to unmanufactured tobacco. The Lower Authority has made a wrong finding that applying jaggery water on already cured tobacco would amount the product has been subjected to processing. Hence, amounts to manufacturing of chewing tobacco. The Lower Authority has wrongly proceeded to discuss whether the product is chewing tobacco or not and has not focused on the core issue of whether the process relating to....
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.... = 1985 (5) TMI 54 - SUPREME COURT has held that the basis of the reason with regard to the end use of the article is absolutely irrelevant in the context of the entry made under fiscal statute like CETA. * The Lower Authority ought to have applied the ruling of the Hon'ble Madras High Court in Sunder India Ltd & Ors Vs. CCT 86 ORs reported in [2011] 38 VST 124 (Mad) = 2009 (7) TMI 1195 - MADRAS HIGH COURT wherein it was held that if there is ambiguity with regard to the rate of tax to be collected, the benefit should go to the assessee. * The Lower Authority failed to apply the Hon'ble Supreme Court decisions in Woodcrafts Products Ltd. 1995 (77) ELT 23 (SC) = 1995 (3) TMI 93 - SUPREME COURT wherein it is held that the description in the HSN explanatory Note has persuasive value. * The Lower Authority ought to have held the product as unmanufactured as the raw tobacco leaf has not undergone any change and that the raw tobacco leaf is only liquored and cut to piece to facilitate packing. PERSONAL HEARING: 5.1 Due to the prevailing PANDEMIC situation and in order not to delay the proceedings, the appellant was addressed through the Email Address mentioned in the application ....
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....ation to the Product leading to wrong conclusion. The AAR has proceeded with a pre-conceived notion that chewing Tobacco has to be manufactured only ignoring the fact that there can be unmanufactured chewing Tobacco (in fact many of the chewing Tobacco available in the market is only unmanufactured). Therefore, the moot question is whether it is manufactured or unmanufactured tobacco. * The AAR ruling is incorrect for the following reasons and that the product is classifiable under Chapter sub-heading 24.01 for the following reasons:- i. The process adopted by the Appellant does not amount to manufacture; ii. Chapter Notes to 2401 and Explanatory Notes to 2403; and iii. CBEC Clarification and Authorities relied. * Not a Manufacture:- The term 'Manufacture' is defined under section 2(72) of CGST Act, 2016. The term 'manufacture' means "processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term "manufacturer" shall be construed accordingly." It is submitted that by the process adopted by them, the tobacco does not undergo any change which would constitute it as a manufacture. Therefore....
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....f the Hon'ble Madras High Court in A.V. Pachiappa Chettiar & Another Vs. The State of Madras reported in 1962 (13) STC 202 (Mad) = 1961 (9) TMI 48 - MADRAS HIGH COURT wherein it is held that sprinkling of jaggery water on the tobacco and cutting into piece does not amount to manufacture. * The Hon'ble New Delhi Tribunal in the case of Commissioner Of Central Excise, Kanpur Vs. Ravindra & Company reported in 2000 (120) E.L.T. 699 (Tribunal) = 2000 (6) TMI 70 - CEGAT, COURT NO. IV, NEW DELHI has under similar facts and circumstances of their case, held that the product is classifiable under 2401 of CETA. The relevant portion of the judgement is reproduced below. "11. Even the Tribunal in number of cases has taken consistent view that cutting of unmanufactured tobacco leaves into small pieces, labelling with strings and packing in containers without adding any foreign ingredient, did not amount to manufacture, and would be classifiable under sub-heading 2401.00 of CETA as unmanufactured tobacco. In this context, reference may be made to CCE Surat v. Ranchhoddar Zinabhai & Sons, 1998 (104) E.L.T. 509 (T) = 1998 (9) TMI 162 - CEGAT, NEW DELHI and T.P.N.S. Chettiar Parvathi Vilas Tob....
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....eal process undertaken in relation to the Product leading to wrong conclusion. * proceeded with a pre-conceived notion that chewing Tobacco has to be manufactured only, ignoring the fact that there can be unmanufactured chewing Tobacco (in fact many of the chewing Tobacco available in the market is only unmanufactured) and had failed to notice the decisions relied upon by them. Therefore, the mute question is whether it is manufactured or unmanufactured tobacco. The appellant has relied on the clarification issued by CBEC vide F. No. 81/5/87-CX.3, dated 23-6-1987 and the decision of CESTAT in the case of Ravindra & Company reported in 2000 (120) E.L.T. 699 (Tribunal) = 2000 (6) TMI 70 - CEGAT, COURT NO. IV, NEW DELHI; & Hon'ble Madras High Court in A.V. Pachiappa Chettiar & Another Vs. The State of Madras reported in 1962 (13) STC 202 (Mad) = 1961 (9) TMI 48 - MADRAS HIGH COURT, Damodar J. Malpani and Ors Vs. Collector of Central Excise = 2002 (9) TMI 114 - SUPREME COURT and Bell Mark Tobacco Vs. Government of Madras = 1960 (7) TMI 60 - MADRAS HIGH COURT. 8.1 We take up the contentions placed before us. We see that the lower authority has dealt with the claim of the appellant th....
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.... Therefore, the product of the applicant does not fall under CTH 2401. Thus we find the contention of the appellant that the Lower Authority has wrongly proceeded to discuss whether the product is chewing tobacco or not and has not focused on the core issue of whether the process relating to the product lead to manufactured tobacco (2403) or unmanufactured tobacco (2401) do not hold any merit. Reliance on the ICAR-CTRI(Central Tobacco Research Institute) website in relation to the 'Chewing Tobacco of Tamilnadu' cannot be termed as 'unrelated facts' in as much as CTRI is the arm of Indian Council of Agricultural Research and involved in the various types of Tobacco grown in the country and the product under consideration is supplied and known in the market as 'Chewing Tobacco'. 8.2 On the contention of the appellant that the Lower authority had failed to notice the decisions relied upon by them we find that the lower authority has indeed taken note of the said decisions in Para 6.6 of their order and has observed that the questions raised in the said cases do not have relevance to the case at hand in the decisions of A.V. Pachiappa Chettiar & Another Vs. The State of Madras report....
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....ng Heading No 24.01, has inclined to support the classification of such product under heading No. 24.01 in the category of unmanufactured tobacco while noting that normally understood 'Zarda' preparation which come in the category of chewing tobacco as manufactured tobacco product would not be entitled to classification under 24.01 since these are squarely covered by the description appearing in sub-heading 2401.41 or 2404.49. The clarification of the Board, given under Para 5 of the said circular is given below: "5. The Board has accepted the above views of the conference. Accordingly, it is clarified that un-manufactured tobacco merely broken by beating and then sieved and packed in retail packets with or without brand name for consumption as chewing tobacco, which may be commonly known in the market as 'Zarda" would be appropriately classifiable under Heading No. 24.01 of the Schedule to the Central Excise and Tariff Act, 1985 un-manufactured tobacco." 9.3 We find that in the case of Jaikisan Tobacco the decision of which was also considered for issuing the above clarification, the facts are that the respondent has purchased the raw tobacco in bulk and broken the same into pi....
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....ndra & Company reported in 2000 (120) E.L.T. 699 (Tribunal) = 2000 (6) TMI 70 - CEGAT, COURT NO. IV, NEW DELHI;, the product emerges after beating, crushing and sieving the purchased tobacco leaves as seen in Para 9. The extract of the said para is given under: 9. In the instant case, it is not the case of the Revenue that the tobacco being dealt with by the respondents is meant for smoking. It is rather admittedly meant for chewing. The process adopted for preparing this tobacco under the brand name of "Bandar Dholak Chhap and Hari Chhap" by the respondents also remains undisputed as the same has not been challenged by the Revenue in their grounds of appeals. They prepare this tobacco by beating, crushing and sieving the tobacco leaves purchased by them from the market without adding any foreign material therein. This process was also confirmed by the Range Superintendent in his report dated 11-10-1985 wherein he mentioned that the tobacco was prepared by the respondents by beating, crushing and sieving the tobacco leaves and packing in retail paper packets bearing the brand name. All these facts also find reference in para 12 of the impugned order dated 14-7-1998 of the Commiss....
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....iff' which gives the classification for determination of rates of goods as per Notification No. 01/2017-C.T.(Rate) do not define what is 'Manufactured tobacco' and Unmanufactured tobacco' and hence we need to look into the interpretations of judiciary. 10.2 We find that Hon'ble High Court of Madras in the case of Bell Mark Tobacco Company & Ors Vs. Government of Tamilnadu = 1960 (7) TMI 60 - MADRAS HIGH COURT, while answering the issues raised before them, observed "what is to be considered as Unmanufactured chewing tobacco' and 'Manufactured chewing tobacco' when the same is not defined in the Act". The relevant portion are extracted as under: 17. The relevant factors to be considered at this stage are as follows :- The assessee purchases the tobacco and stores it in his licensed warehouse till it is required for being made into packets for sale. At the stage when the assessee issues the tobacco from the warehouse for being subjected to the further process before it was packed, he pays the prescribed excise duty. The learned counsel for the petitioner contended that even at the stage of purchase what the assessee purchased was known to the trade as chewing tobacco. It was found....
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..... It was the sale of the manufactured product effected by the assessee, manufactured from the tobacco that he had purchased, that came within the scope of Section 5(vii). No doubt, soaking in jaggery water and the process of bulking were processes common both to the seller and to the assessee who purchased the tobacco. In other words, the assessee subjected the tobacco he had purchased to the same process. Had he stopped with that alone, it might be possible to contend that what he sold subsequently was not a manufactured product. Taking, however,- the cumulative effect of the various processes to which the assessee subjected the tobacco before he sold it, it is clear that what was eventually sold by the assessee was a manufactured product, manufactured from the tobacco that the assessee had purchased. Soaking in jaggery water is not the only process to be considered. The addition of flavouring essences and shredding of the tobacco should establish that what the assessee sold was a product substantially different from what he had purchased. Once again, we have to point out that the fact that this assessee purchased the tobacco as chewing tobacco did not determine the question, whet....
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....ace where it is converted into pieces; there it is periodically sprinkled with palm jaggery water to keep it soft and wet; the tobacco so treated is taken out little by little and cut into pieces, bundled (as per Para 1) whereas in the case at hand, the process undertaken is different in that the raw material are graded and dried categorizing age-wise, undergoes dipping in jaggery water, undergoes the process of stalking and semi-drying, mincing, added with natural/agricultural preservatives after storing for few hours/days and then weighed & packed 10.4 We see that Customs Tariff/HSN do not define Unmanufactured/ manufactured tobacco' in the Section /Chapter notes specifically. 'Manufacture' under the GST law is defined under Section 2(72) as (72) "manufacture" means processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term "manufacturer" shall be construed accordingly; Thus, any process on the raw material resulting in emergence of a new product with a distinct name, character and use is defined as 'manufacture' under GST. The appellant has stated to have purchased Raw dried tobacco lea....