TaxTMI 
TaxTMI 
2021 (1) TMI 547
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....is moulded and given the 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 desir....
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....nges in shapes and sizes of traditional papad and the same is 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 ag....
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....FINGER, FINGER, NALI, etc. Further, submitted that keeping in mind this diversity 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 IS 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 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 cas....
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....adopted in earlier law should continue to prevail and accepted. (v) The applicant submitted that they are aware of the fact that decision of Honourable Karnataka High Court in 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 H....
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....particular commodity will be in tumultuary and the same shall be deleterious to public at large. The principle of finality of litigation is based on a sound firm principle of public policy. In the absence of such a principle great oppression might result under the colour and pretence of law inasmuch as there will be no end to litigation. The doctrine of res-judicata has been evolved to prevent such anarchy. It would also nullify the doctrine of stare decisis a well established valuable principle of precedent which 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 ....
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....epresentation providing overview of papad product manufacturing process is reproduced hereunder: Raw materials consisting of wheat flour, superfine wheat flour, rice flour, starch, corn flour, cereal flour, potato starch, chana, potato lentils, papad khar, bicarb, vegetables like ¯ Blended in a steering/ mixture machine with water and oil to make a dough ¯ Dough is passed through various die to form various shapes ¯ Product is dried through various stages (also includes sun drying in some cases)/ processes to maintain moisture level at a specific percentage level. ¯ Product is cooled and breakages are removed ¯ Product is packaged (branded or unbranded) as per the specific requirement 21. The applicant submitted that principal raw materials for papad products are: rice flour, corn flour, wheat flour, super fine wheat flour, cereal flour, tapioca starch, potato starch, salt, water and flavor, as the case may be. Similar raw-materials including pulses, salt, water etc. are used for making papad. Most of the said raw materials are either exempted from GST or subject to 5%/12% GST. 22. The applicant submitted tha....
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....the classification on the basis of predominant contents is generally accepted as proper test. Further, Honourable Allahabad High Court in the case of Commissioner of Customs, C.G.O. Vs. Sonam International [2012-275-ELT-326-ALL] = 2010 (10) TMI 120 - ALLAHABAD HIGH COURT upheld that assessment of goods with regard to payment of customs duty is to be made based on contents involved. The Chapter Notes in the Customs Tariff also prescribe the content or ingredients of products in order to include or exclude specific products within a given Chapter Heading. 27. The applicant submitted that the products are in ready to fry condition for human consumption. Moreover, Explanatory Notes to Chapter 19 of Harmonized Commodity Description & coding system by World Customs Organization specifies that Chapter 19 covers preparation, generally used for food, which are made either directly from the cereals of Chapter 10, from the products of Chapter 11 or from food flour, meal and powder of vegetable origin of other Chapters. 28. The applicant submitted that considering the ingredients used and the process followed for manufacture of product read with Chapter Headings and Tariff entries, the p....
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.... two different entries for PAPAD and NAMKEEN. So, the applicant most respectfully submits that this judgment cannot be relied upon as a precedent in order to classify PAPAD sold by the applicant because the entry in question before Honourable CEGAT and entry in question in present application of the applicant are completely different and more specifically when Honourable CEGAT had no occasion to consider two entries separately as PAPAD and NAMKEEN were covered under same entry. 30.2 The applicant further submitted that if the judgment of Honourable Supreme Court in the case of Commissioner of Commercial Tax, Indore Vs. M/s. T.T.K. Healthcare Ltd. -2007 (211) ELT 197 (SC) = 2007 (4) TMI 354 - SUPREME COURT which is referred in M/s. Sonal Products is examined, it can be noticed that at no point of time there was any question before Honourable Supreme Court as to whether the product FRYUMS could be considered as PAPAD or not. The issue for consideration before Honourable Court was whether FRYUMS would be classified under the entry of "COOKED FOOD" or "RESIDUARY ENTRY". Thus, there was no occasion for Honourable Supreme Court to consider the issue of classification of FRYUMS under e....
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....dded Tax Act, 2003 in the case of Jay Khodiyar Agency (2007-D-98-103 Dt:-11/09/2007) and Kansara Trading Co. (2011-D-356-357 Dt:-11/02/2011), Honourable GVAT Tribunal in the case of M/s. Avadh Food Products Vs. State of Gujarat -First Appeal No.1/2015 read with Rectification Application No.31/2015 in First Appeal No.1/2015 Dt;-03/07/2015 reported in 2015 GSTB -II -405 and in the case of M/s. Swethin Food Products Vs. State of Gujarat -2016 GSTB -I 296, Honourable Karnataka High Court in the case of State of Karnataka Vs. Vasavamba Stores -[2013] 60 VST 19 (Karn.) = 2012 (10) TMI 977 - KARNATAKA HIGH COURT and Honourable Supreme Court in the case of Shiv Shakti Gold Finger Vs. Assisstant Commissioner, Commercial Tax, Jaipur -(1996) 9 SCC 514 = 1996 (5) TMI 419 - SUPREME COURT deal with an entry identical to the entry under GST Act i.e. PAPAD and classify the similar product like of applicant as PAPAD. So, according to understanding of the applicant, more reliance should be placed and more weightage should be given to the decisions wherein identical or similar entries were involved and with due respect, not to the decisions where entries for consideration were completely different. ....
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....ll-settled that if there are two entries-one general and the other special, the special entry should be applied for the purpose of levying tax. The general entry should give way to the special entry. The ratio decidendi in the case of Mauri Yeast India Pvt.Ltd. Vs. State of UP -2008 (225) ELT 321 (SC) = 2008 (4) TMI 101 - SUPREME COURT is that -If there is conflict between two entries one leading to an opinion that it comes within the purview of the tariff entry and another the residuary entry, the former should be preferred. 35. The applicant further submitted that yet another principle of rule of interpretation and classification is noscitur a sociis which means that meaning of a word is to be judged by the company it keeps. Applying the said principle while classifying the product of the present applicant, by no means it can be said that it is eligible to be classified under heading 2106 because by no stretch of imagination the product of the applicant can be equated with either "Misthan" or "Mithai"or "Namkeen" or "Chabena" or "Bhujia". At the cost of repetition the applicant would like to submit that product of the applicant can neither be consumed by human in the form it i....
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....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." 41. 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 Act, 2017'), Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the IGST Act, 2017 or the Notifications issued under the CGST Act, 2017/GGST Act, 2017/IGST Act, 2017. 41.1 It is now well settled principle of interpretation of statute that the word not defined in the statute must be construed in its popular sense, meaning 'that sense which people conversant with the subject matter with which the statute is dealing would attribute to it'. It is to be construed as understood in common language. In the case of Indo International Industries v. Commissioner of Sales Tax, U.P. [1981 (8) E.L.T. 325 (S.C.)] = 1981 (3) TMI 77 - SUPREME COURT, Hon'ble Supreme Court has held as follows : "4. ....
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....ent 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. 44. 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 and ordinarily intended for sale, it will not come within the Heading 2107.91. Therefore, the product has to be brought under the residuary sub-heading 2107.99 as 'Other' carrying nil rate of duty. As we have classified the product under the residuary product under the heading "Edible preparations not elsewhere sp....
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....n' and not as 'Papad'. 44.2 The applicant has contended that in the above case entry for consideration before Honourable CEGAT was "Papad, Idli-Mix, Vada-Mix, Dosa-Mix, Jalebi-Mix, Gulabjamun-Mix or Namkeens such as Bhujia, Chabena"; that at relevant time PAPAD and NAMKEEN were in same entry. So, there was no occasion for Honourable CEGAT to consider and differentiate between PAPAD and NAMKEEN. Subsequently, the entries were changed and then came into existence two different entries for PAPAD and NAMKEEN. The applicant said argument is not tenable as such applicant is interpreting the aforesaid judgement as per their convenience because in the said case Hon'ble CEGAT was to decide whether the said Product i.e. "Fryums" can be equate with Namkeen or not so that assessee can get benefit the exemption from payment of duty. The assessee (M/s. TTK Pharma) in the case had claimed that their product "Fryums" is a Namkeen and not claimed as "Papad" where as in the exemption entry "Papad, Idli-Mix, Vada-Mix, Dosa-Mix, Jalebi-Mix, Gulabjamun-Mix or Namkeens such as Bhujia, Chabena" both the product i.e. "Papad" and "Namkeen" were exempted. The assessee (M/s. TTK Pharma) emphasis that his ....
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....me in plastic bags. These 'fryums' were required to be fried depending on the taste of the consumer. In the circumstances we are of the view that 'fryums' were like seviyan. 'Fryums' were required to be fried in edible oil. That oil had to be heated. There was certain process required to be applied before 'fryums' become consumable. In these circumstances the item 'fryums' in the present case will not fall within the term 'cooked food' under Item 2 Part I of Schedule II to the 1994 Act. It will fall under the residuary item "all other goods not included in any part of Schedule I". [underlining supplied] 44.4 In this case, Hon'ble Supreme Court was of the view that 'fryums' were like 'seviyan'. 45. The applicant in their application has submitted that such 'different shapes and sizes un-fried Papad is not a cooked food and actually it is ready to cook food. This is a fact that when a person goes in the shop for purchase of Papad, shopkeeper shows him different types of Papad like 'Moong dal Papad' 'Udad dal Papad', 'Chaval ke Papad' etc. but shopkeeper never shows different shapes and sizes like round, square, semi-circle, hollow circle with bars in between or square with b....
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....uct which is not ready to eat but can be consumed only after being fried by ultimate consumer, is specifically classifiable as 'papad' under Tariff Item 1905 05 40 of GST Tariff which is exempt from CGST/SGST vide Sl. No. 96 of Notification No. 2/2017-C.T. (Rate) as amended and Notification No. II(2)/CTR/532 (d-5)/2017 vide G.O. (Ms) No. 63." In the said Ruling the Advance Authority was to decided the classification of "Papad" made from "Maida" i.e. fine wheat flour and not the classification of "Fryums". Accordingly, the facts of the said Ruling of the Advance Authority are totally different. Therefore, the said Ruling of Advance Authority is not applicable in the applicant case. Further, as per Section 103 of the CGST Act, 2017 any Advance Ruling is binding on the Applicant who has sought it and on the concerned officer or the jurisdictional officer in respect of the Applicant. Accordingly, AARs Ruling as cited above can't be relied upon in the present case of the Appellant. 47. The applicant has claimed that the main ingredient of their product i.e. so called Papad of different shapes and sizes is wheat flour, superfine wheat flour, rice flour, starch, corn flour, cereal flou....
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....e 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. 50. The applicant has also relied upon the judgement of Hon'ble High Court of Karnataka in the case of State of Karnataka Vs. Visavamba Stores and Others, wherein the issue involved was whether the Fryums can be treated as Pappad under Entry 40 of the I Schedule to the KVAT Act. 50.1 The State of Karnataka has filed Special Leave Petitions (C) No. 29023-29083/2013 in the Hon'ble Supreme Court against the said judgment of Hon'ble High Court of Karnataka. The Hon'ble Supreme Court has granted leave to the said Special Leave Petitions. Therefore, the aforesaid judgment of the Hon'ble Karnataka High Court is in jeopardy, in view of the judgment of Hon'ble Supreme Court in the case of Union of India v. West Coast Paper Mills Ltd. [2004 (164) E.L.T. 375 (S.C.)] = 2004 (2) TMI 344 - SUPREME COURT, wherein it has been held as under - "14. Article 136 of the Constitution of India confers a special power upon this Court in terms whereof an appeal shall lie against any order passed by a Court or Tribunal. Once a Special Leave is grant....
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.... 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 90 11 ----Sharbat kg. 2106 90 19 ----Other kg. 2106 90 20 ---Pan masala kg. 2106 90 30 ---Betel nut product known as "Supari" kg. 2106 90 40 ---Sugar-syrups containing added flavouring or colouring matter, not elsewhere specified or included; lactose syrup; glucose syrup and malto dextrin syrup kg. 2106 90 50 ---Compound preparations for making non-alcoholic beverages kg. 2106 90 60 ---Food flavouring material kg. 2106 90 70 ---Churna for pan kg. 2106 90 80 ---Custard powder kg. ---Other 2106 90 91 ----Diabetic foods kg. 2106 90 92 ----Sterilized or pasteurized millstone kg. 2106 90 99 ----Other kg. 52.3 Chapter Note 5 and 6 of Chapter 21 provides, as follows - "5. Heading 2....
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.... Fryums is not similar to Papad or such class of Individuals. 52.6 The Punjab and Haryana High Court in the case of CIT v. Rani Tara Devi[2013] 355 ITR 457 (P & H) = 2013 (3) TMI 53 - PUNJAB & HARYANA HIGH COURT held as below: "The expression 'by any other name' appearing in Item (a) of clause (iii) of Section 2 (14) of the Income Tax Act has to be read ejusdem generis with the earlier expressions i.e. municipal corporation, notified area committee, town area committee, town committee." 52.7 The phrase 'by any other name' and 'by whatever name it is known' have a proximate purpose in a statute and hence the principle laid down by the P&H High Court supra will apply on all squares. Therefore, in the instant Case the goods "Papad" cannot be termed as "Fryums" hence applicant goods is to be classified under CTH No. 2106 and not under CTH No. 1905 of Custom tariff Act, 1975. 52.8 Taking all these aspects into consideration, we hold that the product 'different shapes and sizes un-fried Fryums' is appropriately classifiable under Tariff Item 2106 90 99. 53. Sl. No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017, as amended v....
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....UTHORITY FOR ADVANCE RULING, MADHYA PRADESH has held that, "Fryums, fried - Classification - Rate of GST - Applicant pleading that said goods classifiable as Papad under Tariff Item 1905 90 40 of Customs Tariff Act, 1975 - HELD : In common commercial and trade parlance, said goods are considered as Namkeen only and not as Papad - In its decision reported in 1993 (63) E.L.T. 446 (Tribunal) = 1992 (8) TMI 183 - CEGAT, NEW DELHI, CESTAT had taken similar view in respect of these very goods - Apex Court judgment relied by applicant was in respect of Papad of different shapes and not in respect of Fryums and hence not applicable - Since Heading 2106 ibid covers all kind of edible preparations not elsewhere specified and items and processes specifically mentioned therein are only illustrative, Fried Fryums are appropriately classifiable under Tariff Item 2106 90 99 ibid - Said goods chargeable to GST @ 18% (9% CGST + 9% SGST) - Section 9 of Central Goods and Services Tax Act, 2017" 54.1 The above Rulings of Advance Authority are squarely applicable in the applicant case. In view of the said Rulings, it can be concluded that applicant's product of different shape and sizes is ....