TaxTMI 
TaxTMI 
2021 (1) TMI 366
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....shape, usually a palm size round or may be smaller or bigger. However, with changing of time and considering the different demands of different class of consumers innovations are made in shapes and sizes also and now Papad comes in different shapes and sizes. 4. The applicant submitted that it does not required any extra effect to do the same with minor variations in proportions of ingredient and the dough is moulded in the desired shapes and size may be round, may be squre, may be semi circle, may be hollow circle with bars in between or may be square with bars in between intersecting each other or may be of shape of any instrument, equipment, vehicle, aircraft, animal etc. The shape may vary, the size may vary but the ingredients, the proportion of ingredients, the composition and the recipe remains similar, if not exactly the same. 5. The applicant further submitted that they do not sell the Papad of different shapes and sizes manufactured by it in ready to eat condition. The applicant manufactures Papad of different shapes and size that are in neither fully cooked form nor ready to eat form till reaches the actual consumer. When the consumer desires to consume/ eat, the consu....
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....accepted and appreciated in the market. Due to advancement of the technology, it has become possible to bring change/ modification in the mindset of the people also that now PAPAD can be in any desired shape and size. Considering the same, the rules of viewing a product and interpretation about its classification also need to be modified and upgraded with the overall advancement of commercial scenario. 13. The applicant has referred a few judicial pronouncements wherein Hon'ble Courts including Hon'ble Supreme Court have resorted to encouragement of development of principles of interpretation according to the changing scenario. In the case of State of Punjab Vs. Amritsar Beverages Ltd. - [2006] 147 STC 657 (SC) = 2006 (8) TMI 308 - SUPREME COURT, Honourable Supreme Court was confronted with the issue of interpretation of a couple of provisions of the Indian Evidence Act and while interpreting the provisions vis-à-vis taking cognizance of technological development, Honourable Supreme Court observed that - Creative interpretation had been resorted to by the court so as to achieve a balance between the age old and rigid laws on the one hand and the advanced technology, on th....
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....ity in the different nomenclature given to same commodity in different parts of the country and to avoid confusions and probable litigation, the entry relating to PAPAD has been deliberately worded as "PAPAD, BY WHATEVER NAME IT OS KNOWN" and not as only "PAPAD". 15. The applicant has referred the order passed by the Authority for Advance Ruling, Tamilnadu in the case of Subramani Sumathi- Order No. 07/AAR/2019 dtd. 22/01/2019 = 2019 (3) TMI 926 - AUTHORITY FOR ADVANCE RULING, TAMILNADU wherein the issue of classification of PAPAD made of maida was for consideration before Advance Ruling Authority and it has been held therein that the product in question was eligible to be classified as PAPAD under Tariff Heading 19050540. 16. The applicant submitted that issue as to whether PAPAD of different shapes and sizes and also known by different nomenclature, whereby more common nomenclature used is FRYUMS though FRYUMS is a registered brand name of TTK Healthcare Ltd. and not the name of any of product of PAPAD, would be eligible to be considered as and falling under the entry of PAPAD or not has been very well settled far back by Honourable Supreme Court in the case of Shiv Shakti Gold....
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....pted. (v) The applicant submitted they are aware of the fact that decision of Honourable Karnataka High Court in State of Karnataka Vs. Vasavamba Stores - [2013] 60 VST 19 (Karn.) = 2012 (10) TMI 977 - KARNATAKA HIGH COURT has been carried by State of Karnataka before Honourable Supreme Court. However, as per knowledge of the applicant and subject to verification, Honourable Supreme Court has neither granted any stay on operation and execution of the decision of Honourable Karnataka High Court and as per settled legal position, till a judgment is stayed or reversed, it is the authority prevailing and the judicial discipline demands that the said judgment be honoured and followed. The applicant has rely upon the observation made by Honourable Supreme Court in the case of Collector of Customs, Bombay Vs. Krishna Sales (P) Ltd. - AIR 1994 SC 1239 = 1993 (9) TMI 124 - SUPREME COURT observing that - Mere filing of appeal does not operate as a stay or suspension of the order appealed against. (vi) On the issue of classification and the principles of classification, it would be profitable to refer to the decision of Honourable Supreme Court in the case of Commissioner of Commercial ....
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....cannot be departed from unless there are compelling circumstances to do so. The judgments of the court and particularly the Apex Court of a country cannot and should not be unsettled or ignored. Precedent keeps the law predictable and the law declared by Apex Court, being the law of the land, is binding on all courts/tribunals and authorities in India in view of Article 141 of the Constitution. The judicial system "only works if someone is allowed to have the last word" and the last word so spoken is accepted and religiously followed. The doctrine of stare decisis promotes a certainty and consistency in judicial decisions and this helps in the development of the law. Besides providing guidelines for individuals as to what would be the consequences if he chooses the legal action, the doctrine promotes confidence of the people in the system of the judicial administration. Even otherwise it is an imperative necessity to avoid uncertainty, confusion. Judicial propriety and decorum demand that the law laid down by the highest Court of the land must be given effect to. Union of India (UOI) and Ors. vs. S.P. Sharma and Ors. (2014) 6 SCC 351: MANU/SC/0191/2014 = 2014 (3) TMI 1165 - SUPRE....
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.... involved in the case is regarding classification of "Papad" of different shapes and sizes. The applicant in his submission has tried to equate un-fried Fryums with "Papad" under Tariff Item as 1905 90 40. 23. It is observed that the Explanation (iii) and (iv) of the Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 provides, as follows :- "Explanation. - For the purposes of this notification, - (i) ...... (ii) ...... (iii) "Tariff item", "sub-heading" "heading" and "Chapter" 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). (iv) 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." 24. What is 'Papad' has not been defined or clarified under Customs Tariff Act, 1975, the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the 'CGST Act, 2017), the Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as the 'GGST Ac....
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....e law maker; "it is an attempt to discover the intention of the Legislature from the language used by it, keeping always in mind, that the language is at best an imperfect instrument for the expression of actual human thoughts." [(See Oswal Agro Mills Ltd. (supra)]." 24.3 It needs to be, therefore, examined whether different shapes and size of 'Un-fried Fryums' would be covered by the term 'Papad', as understood in common parlance and as decided by higher judicial authorities. 25.1 The issue of proper classification of the product 'Fry Snack Foods called Fryums' and admissibility of exemption notification under Central Excise regime was examined by the Hon'ble Customs, Excise and Gold Appellate Tribunal (CEGAT, as it was known then) in the case of T.T.K. Pharma Ltd. v. Collector of Central Excise [1993 (63) E.L.T. 446 (Tribunal)] = 1992 (8) TMI 183 - CEGAT, NEW DELHI. In this case, the Hon'ble Tribunal, inter alia, observed as follows:- 6. A reading of these sub-headings makes it clear that the product is not a Prasad or Prasadam, Sterilised or pasteurised miltone. Therefore, it will not come within the sub-headings 2107.10 or 2107.20. As the item is not put in a unit container....
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....uld apply to all other items which are namkeens like Papad, Idli-mix, Dosa-mix, Jalebi-mix etc. which are required to be fried before they can be eaten. [underlining supplied] 25.2 Thus, in the aforesaid decision, the product 'Fry Snack Foods called Fryums' have been considered as 'Namkeen' and not as 'Papad'. 26.1 In the case of Commercial Tax, Indore v. T.T.K. Health Care Ltd. [2007 (211) E.L.T. 197 (S.C.)] = 2007 (4) TMI 354 - SUPREME COURT, the issue before the Hon'ble Supreme Court was regarding tax rate of 'Fryums' under M.P. General Sales Tax Act, 1958/M.P. Commercial Tax Act, 1994. In this case, Hon'ble Apex Court observed as follows: - "12. In the present case we have quoted the definition of the term 'cooked food'. It is an inclusive definition. It includes sweets, batasha, mishri, shrikhand, rabari, doodhpak, tea and coffee but excludes ice-cream, kulfi, ice-candy, cakes, pastries, biscuits, chocolates, toffees, lozenges and mawa. That the item 'cooked food' is inclusive definition which indicates by illustration what the legislatures intended to mean when it has used the term 'cooked food'. Reading of the above inclusive part of the definition shows that only consu....
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.... it can be seen that PAPAD is a thing entirely different and distinct from FRYUMS. Therefore, in common parlance or in market, Fryums are not sold as "PAPAD" instead of "PAPAD" sold as papad and Fryums are sold as Fryums. Both products are different and have their individual identity. Accordingly, in common parlance test, the applicant's product i.e. "different shapes and sizes of Papad" is not "Papad" but is "Un-fried Fryums". 28.1 The applicant has relied upon the judgment of Hon'ble Supreme Court in the case of Shivshakti Gold Finger wherein the Hon'ble Supreme Court examined the matter under Rajasthan Sales Tax Act, whether 'Gol Papad' manufactured out of Maida, Salt and Starch are Papad or not. It was held that size or shape is irrelevant and that Papad of all shapes and sizes are covered under the entry 'Papad'. 28.2 However, in the case of Shivshakti Gold Finger, Hon'ble Supreme Court has not examined the issue of 'Un-fried Fryums'. Therefore, the said case is not found to be applicable in the facts of the present case. 29.1 The applicant has also relied upon the judgement of Hon'ble High Court of Karnataka in the case of State of Karnataka v. Visavamba Stores and Others ....
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....der Section 80 of the Gujarat Value Added Tax Act, 2003 were not pertaining to classification under First Schedule to the Customs Tariff Act, 1975 and therefore are not applicable in the present case. (iii) Commissioner of Commercial Tax, UP Vs. A. R. Thermosets (P) Ltd. - AIR 2016 SC 321: (2016) 94 VST 258 (SC) = 2016 (9) TMI 410 - SUPREME COURT. In this case, Hon'ble Supreme Court of India has decided the issue of classification of BITUMEN EMULSION, whereas in the instant case, issue pertains to determination of classification of un-Fried Fryums. Therefore, this case law is not applicable in the instance case. 31. Therefore, the 'Un-fried Fryums' are not classifiable as 'Papad' under Tariff Item 1905 90 40. 31.1 The next issue which arises for consideration is appropriate classification of 'Unfried Fryums'. 31.2 Chapter Heading 2106 of the First Schedule to the Customs Tariff Act, 1975 is, as follows :- HS Code Description of goods Unit (1) (2) (3) 2106 Food preparations not elsewhere specified or included 2106 10 00 - Protein concentrates and textured protein substances kg. 2106 90 -Other : ---Soft drink concentrates : 2106 9....
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....or included [other than roasted gram, sweetmeats, batters including idli/dosa batter, namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, khakhra, chutney powder, diabetic foods]" falling under Heading 2106. Therefore, Goods and Services Tax rate of 18% (CGST 9% + GGST 9% or IGST 18%) is applicable to the product 'Un-fried Fryums' as per Sl. No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017, as amended, issued under the CGST Act, 2017 and Notification No. 1/2017-State Tax (Rate), dated 30-6-2017, as amended, issued under the GGST Act, 2017 or IGST Act, 2017. 33. We also refer to the following Rulings of Advance Authority, which are squarely applicable in the instant case: (i) Gujarat Advance Authority in case of M/s. Sonal Product G {Advance Ruling No. GUJ/GAAR/R/2019/03, dated 22-2-2019 = 2019 (3) TMI 930 - AUTHORITY FOR ADVANCE RULING, GUJARAT} has held that, "Papad and Papad Pipes - Classification of - Products commonly known as unfried Fryums having different shape, sizes and varieties and made from raw materials such as maida floor, starch powder, rice powder, poha, salt, soda by-carb, baking ....