TaxTMI 
TaxTMI 
2021 (1) TMI 593
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....ng before consuming as and when required. 3. The Papad turns out to be a papad when the dough 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. It does not require any extra effort to do the same i.e. change the shape and size of a Papad. The dough remains 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 square, 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. 4. 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 s....
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.... manufactures like applicant resort to the technological development in machineries which may help in meeting with the market demand of manufacturing and supplying of Papads of different shapes and sizes. 6.5 The applicant further submitted that today PAPAD does not resemble the same age old traditional round shaped papad. Today, due to huge change in market trend, huge change in the taste buds of the masses and huge change in the technology, the manufactures like applicant are able to bring the some changes 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 mind-set of the people also that now PAPAD does not resemble the traditional round shape but 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. 6.6 The applicant has referred a few judicial pronouncements wherein Hon'ble Courts including Hon'ble Supreme Court have resorted to encouragement of develo....
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....urrent law." 6.8 The applicant further submitted that traditional PAPAD is known by different nomenclature in different parts of the country e.g. PAPAD, PAPAD, PAPPADAM, ALAM, KHICHIYA, etc. Similarly, the modern day PAPAD with different shapes and sizes is also known and recognised by different nomenclature in different parts of the country keeping in mind the shape and size thereof e.g. PAPAD, FRYUMS, BHUNGLA, NADDA, GONGO, PONGA, GOLD FINGER, WHITE FINGER, FINGER, NALI, etc. The applicant 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 OS KNOWN" and not as only "PAPAD". 6.9 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 ....
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....Vs. Vasavamba Stores - [2013] 60 VST 19 (Karn.) 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 would like to place reliance upon the observation made by the Honourable Supreme Court in the case of Collector of Customs, Bombay Vs. Krishna Sales (P) Ltd. - AIR 1994 SC 1239 wherein Hon'ble Supreme Court has observed that - Mere filing of appeal does not operate as a stay or suspension of the order appealed against. 6.13 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 Tax, UP Vs. A. R. Thermosets (P) Ltd.-AIR 2016 SC 321 : (2016) 94 VST 258 (SC) wherein, issue was as to whether BITUMEN EMULSION was eligible to be classifi....
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....aw inasmuch as there will be no end to litigation. The doctrine of res-judicata has been evolved to prevent such an 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 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. Ju....
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....he Tariff Heading No.1905 and more precisely 1905 90 40 as "PAPAD by whatever name it is known, except when served for consumption", as specified at Sr. No. 96 under Notification No. 02/2017-CT (Rate) dated 28.06.2017 and, thus, attracts NIL rate of tax under IGST, CGST and SGST. 7. Further, the applicant has furnished the Additional submission dated 06.08.2020, as below: (i) The issue was already decided in case of M/s. Subramani Sumathi vide Order No. 7/AAR/2019 dated 22.01.2019 by Tamilnadu Advance Ruling Authority, who has held that Maida Vadam/ Papad is classifiable under '109050540'. As GST being promoted as one nation one tax, one needs to follow it by heart and by spirit also by having truly one nation one tax theory. If different tax rates are there for the same product in different States then there will be clear cut violation of One Nation One Tax theory which is ultimate goal of bringing GST into existence. (ii) HSN classification is being followed by Customs authorities years before the CGST came into existence and the exporters are exporting the papad under the HSN code 19059040 even under the product description Fryums as they understand that the....
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.... classify the same product by the same person under two different HSN having different rate of tax then how will this businessmen run his business where there two different rates for same product. This will result in absurdity. So the product manufactured by the applicant shall be classified under HSN 1905 which is already held in case of M/s. Subramani Sumathi vide Order No. 7/AAR/2019 dated 22.01.2019 by Tamilnadu Advance Ruling Authority. (iii) The statement of objects and reasons of the GST- The constitutional (122nd amendment) Bill, 2014 clearly says that "The GST shall replace the number of indirect taxes being levied by the union and state governments and to provide for a common national market for goods and services. The statement of objects and reasons of the CGST clearly states that The GST is being brought in to mitigate the difficulty of variety of VAT laws in the country with disparate tax rates and dissimilar tax practices divides the country into separate economic spheres. If this object is to be met then one need to accept the AAR ruling of Tamilnadu Advance Ruling Authority in case of M/s. Subramani Sumathi. If this is not accepted, then the law will resul....
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....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.)], Hon'ble Supreme Court has held as follows : "4. It is well settled that in interpreting Items in statutes like the Excise Tax Acts or Sales Tax Acts, whose primary object is to raise revenue and for which purpose they classify diverse products, articles and substances resort should be had not to the scientific and technical meaning of the terms or expressions used but to their popular meaning, that is to say, the meaning attached to them by those dealing in them. If any term or expression has been defined in the enactment then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted. ........." 12.2 This view was uphe....
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.... or included which carries nil rate of duty, the question of raising any demand or of Excise duty may not arise. However, as arguments have been adduced with regard to the Notification No. 12/90, dated 20-3-1990, it would be proper for us to give finding in regard to the same. 7. ...... 8 ......... The Sl. No. 8 reproduced above mentions about various goods coming within sub-heading 2107.91. It has given illustration to the items Namkeens such as Bhujiya, Chabena. Now the question is as to whether these namkeens given in the notification is a general one including all types of namkeens or only to the type given therein like Bhujiya, Chabena by illustration. The learned Collector has interpreted the word 'such as' to mean namkeen should be of a kind of Bhujiya and Chabena. Although it is not in dispute that the item in question is a namkeen. As can be seen from the various items given in Sl. No. 8 namely Papad, Idli-mix, Vada-mix, Dosa-mix, Jalebi-mix, Gulabjamun-mix are all of a type which cannot be eaten straightaway but it requires to be fried. Chabena also comes in a type of item which requires to be chewed like Potato chips or fried Channa Masala or v....
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....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] 14.1 In this case, Hon'ble Supreme Court was of the view that 'FRYUMS' were like 'seviyan'. 15. 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 bars in between intersecting each other or shape ....
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....f all shapes and sizes are covered under the entry 'Papad'. 16.1 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. 17. 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, wherein the issue involved was whether the FRYUMS can be treated as Pappad under Entry 40 of the I Schedule to the KVAT Act. 17.1 However, 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.)], wherein it has been held as under: - "14. Article 136 of the Constitution of India confers a special power upon this Court in terms wh....
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....on before the said Advance Ruling Authority, the ratio of said order cannot be applied to the facts of the present case. In this regard, it is further worthwhile to refer the provision of Section 103 of the CGST Act, 2017, which provides that "the advance ruling pronounced by the Authority or the Appellate Authority under this Chapter shall be 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. 20. The applicant has claimed that the main ingredient of their products i.e. so called Papad and papad products of different shapes and sizes are Cereals, Flour, Starch etc. and so, the applicant is of the view that its products fall in the Chapter 19 of the First Schedule to the Customs Tariff Act, 1975. We find that main ingredient of Papad is batter of Pulses i.e. Moong dal, Udad Dal, black pepper etc. In the market most popular papad are of "Moong dal Papad" and "Udad dal papad". Therefore, main ingredients of both the Products i.e. "Fryums" and "Papad" are not same but are different. Further, the manufacturi....
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....----Sterilized or pasteurized millstone kg. 2106 90 99 ----Other kg. 22.2 Chapter Note 5 and 6 of Chapter 21 provides, as follows - "5. Heading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter alia includes : (a) ...... (b) Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption; (c) ...... (d) ...... (e) ...... (f) ...... (g) ...... (h) ...... (i) ...... 6. Tariff item 2106 90 99 includes sweet meats commonly known as "Misthans" or "Mithai" or called by any other name. They also include products commonly known as "Namkeens", "Mixtures", "Bhujia", "Chabena" or called by any other name. Such products remain classified in these sub-headings irrespective of the nature of their ingredients." 22.3 Thus, Heading 2106 is an omnibus heading covering all kind of edible preparations, not elsewhere specified or included. Chapter Note 5 provides an inclusive definition of this heading and covers preparations for use either directly or after processing, for human consumpti....
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....der Tariff Item 2106 90 99 of Customs Tariff Act, 1975 and not under Tariff Item 1905 90 40 ibid - Product liable to GST @ 18% (CGST 9% + GGST 9% or IGST 18%) under Serial No. 23 of Schedule III of Notification Nos. 1/2017-C.T. (Rate) as amended and 1/2017-S.T. (Rate) as amended". (ii) Madhya Pradesh Advance Authority in case of M/s. Alisha Foods reported in ELT 2020 (33) G.S.T.L. 474 (A.A.R. - GST - M.P.) holding 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), 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....