TaxTMI 
TaxTMI 
2021 (3) TMI 500
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....by the Appellate Authority under Chapter XVII of the Act 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. 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 mad....
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....hapter 0802 80 90 of the Customs Tariff and attracts 6 % CGST as per S.NO. 15 Of Schedule Il under Notification 1/2017-Central Tax (Rate) Dt. 28.06.2017 and 6 % SGST under Notification No. II (2)/CTR/532(d-4)/2017 vide vide G.O. (Ms) No. 62 dated 29.06.2017 as amended. 4. Aggrieved by the above decision specifically on the issue of rate of Tax, the appellant has filed the present appeal. The grounds of appeal are as follows: Issue of Classification • The appellant has referred to Chapter 8 of Customs Tariff. They have submitted that the only reason adduced by the original authority in support of the decision to classify the subject product under Chapter 0802 8090 is that in the decision of the Hon'ble CESTAT in the case of Azam Laminators Pvt. Ltd. = 2019 (3) TMI 782 - CESTAT CHENNAI very same product has been held to be classifiable under Chapter 08028090 • They have submitted that all through the Chapter 8, it may be observed that the goods are classified at sub heading level, not based on the processes undertaken thereon. In respect of almonds, hazelnuts, wall nuts, pistachio and macadamia nuts, the further classification is based only on whether ....
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....n respect of which the Council can make recommendations to the Government are enumerated, which, inter alia includes, "the rates including floor rates with bands of goods and services • When so many indirect taxes levied both by the Central Government and the State Governments are subsumed into a single tax, arriving at a proper GST rate for all goods and services was a challenge. On the one hand the revenues from the old levies accruing to the Government (Both Centre and State) should not suffer on account of such subsuming; on the other hand, such subsuming should not lead to any significant distortion in the preexisting rates (along with their cascading effect) and post GST rates. • The issue of finalization of a Band of GST rates was first discussed in the 3rd GST Council meeting held during 18th to 19th October 2016. It may be observed from Agenda Item 4 of the minutes, that a detailed presentation was made on the subject and the following criteria were identified which shall guide the fixation of rates of GST for different goods and services. (i) Present tax incidence on the goods and services in the country; (ii) Need to protect th....
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....re Il and 12% rate for various goods mentioned in Annexure III. The relevant entries are as below: Annexure I LIST OF GOODS AT NIL GST RATE Sl.No. Chapter Description 8 8-Edible fruits and nuts, peel of citrus fruits or melons Fresh Fruits other than in frozen state or preserved Annexure II LIST OF GOODS AT 5% GST RATE Sl.No. Chapter Description 4 8-Edible fruits and nuts, peel of citrus fruits or melons Edible fruits and nuts other than in frozen state or preserved (Other than dry fruits) Annexure III LIST OF GOODS AT 12% GST RATE Sl.No. Chapter Description 5 8-Edible fruits and nuts, peel of citrus fruits or melons Dry fruits • The recommendations of the Fitment Committee, as to the proposed rates of GST for various goods was considered by the GST Council in its 14th Meeting held on 18th and 19th May, 2017. It may be observed from the entries reproduced above that while fresh fruits falling under Chapter 8 are proposed to be exempted from levy of GST; edible fruits and nuts under Chapter 8 other than dry fruits are proposed to be taxed at the rate of 5%; and dry fruits falling under Chap....
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....12% as per Serial No. 15 of Schedule Il of Notification No. 1/2017. • With reference to the above conclusion of the original authority, the appellant submitted the following: The terms "Areca nut and Betel Nut" are always used interchangeably and understood as such. While the name "Areca nut" has its origin to the fact that the said nut is derived from the Palm Tree which is known as "Areca Catechu", belonging to the family of "Arecaceae", the term "Betel Nut" is derived from the fact that the said product is conventionally used along with betel leaves as masticatory. In this connection reference can be made to the HSN Notes for Chapter 0802 90 which also uses these expressions together as synonyms: This heading also covers areca (betel) nuts used chiefly as a masticatory, cola (kola) nuts used both as a masticatory and as a base in the manufacture of beverages, and an edible, nutlike, spiny-angled fruit of the species Trapa, ratans, sometimes referred to as a water chestnut. • The appellant also wishes to draw attention to the observations/ decisions made in the following cases: i. Hon'ble CESTAT in para 10 of its decision in th....
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....¢ In this connection, they had made reference to para 5.1 of the impugned order of the original authority, wherein the submission of the jurisdictional State officer to the effect that the subject product is liable to 5% VAT in the State of Tamil Nadu, as per S.No. 6 of Part B of Schedule I to the TN VAT Act has been recorded. • They have also placed reliance on the order passed by the Commissioner of Commercial Taxes, Tiruvananthapuram, Kerala bearing No. C3/7632/ 13/CT Dt. 03.03.2015, in pursuance of the directions of the Hon'ble High Court of Kerala, where it is held that the subject product was classifiable under heading 0802 9013 of the then tariff and attract 5 % VAT in the State of Kerala. The appellant has also submitted copy of Third schedule of the Kerala VAT Act. The corresponding new heading for 0802 9013 is 0802 8030. • Further, reliance is placed on the decision of the Hon'ble Karnataka VAT Tribunal 18.12.2019, in the case of the appellant themselves that during the period 2009-10, 2010-11 and 2011-12, the subject goods are to be taxed at 2% under Karnataka VAT Act. As per third schedule to the Karnataka VAT Act, the subject product attracts....
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....observed that heading 0802 is further sub-divided into various sub-headings, viz "Almonds, Hazel nuts or filberts, Chestnuts, Pistachios, Macadamia Nuts, Kola Nuts and Areca Nuts", the residual entry "Others" being covered under 0802 90 00. Sub-heading 0802 80 covering areca nuts have been further sub-divided into Whole (0802 80 10), split (0802 80 20), ground (0820 80 30) and others (0820 80 90). Heading 0802 covers both fresh or dried nuts whether or not shelled or peeled. At subheading level, separate sub-headings are prescribed in respect of "In Shell" and "Shelled" Almonds, Hazel nuts or filberts, Chestnuts, Pistachios, and Macadamia Nuts. In respect of areca nut sub-heading level classification refers to its physical form, viz., Whole, Split, Ground and Others. But no distinction has been made at sub-heading level between fresh and dried nuts in respect of any of the nuts specified therein. • While heading 0801 covers specifically "coconuts, brazil nuts and cashew nuts, fresh or dried", heading 0802 covers "Other nuts, fresh or dried". At sub heading level several nuts are identified separately and those which are not so specifically identified would fall under 0....
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...., viz Nizam Pakku, which involves, applying vegetable oil to broken pieces of areca nut, mild heating, addition of sugar, glucose syrup, menthol and spices. These processes are those covered under Chapter Note 3 of Chapter 8. In all the decisions in the context of classification under Central Excise law referred to earlier in this Appeal, these processes were considered and it has been emphatically held that the above process are well within those prescribed in Chapter Note 3 to Chapter 8 and hence, even after the said processes, the resultant product would continue to be classifiable under Heading 0802 as the essential character of betel nut is not lost. There is no dispute that the processes undertaken continue to be the same even now. Hence, the subject product which retains the essential character of the areca nut (betel Nut) continues to be areca Nut (betel Nut). Hence, the subject product is very much covered within the expression "Dried Areca Nut" used in Serial No.28 of Schedule II of Notification 1/2017. Further, the said S.No.28 covers "Dried Areca Nut" and does not contain any exclusion. • They have relied on the observations made by the Hon'ble Supreme Cour....
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....erved that the said 5% rate shall not be applicable for the products known as betel nuts do not have any significance, as already explained, the terms areca nut and betel nut are always used as synonyms interchangeably. If so, prescribing 5% rate for dried areca nuts (which terms also means dried betel nut), other than those products, which are known as betel nuts, does not make any sense. Rightly so, while putting into effect the decision of the GST council by issuing Notification 1/2017, under S.No. 28 of Schedule I, there is no mention of any exclusion for "products known as betel nuts". • Further, to determine the rate of tax applicable, what's relevant is only the language used in the relevant notification and whether the subject product can be covered within the expression used in S.No. 28 of Schedule I of Notification 1/2017 or whether the subject goods are specifically excluded from the ambit of coverage of S.No. 28 of Schedule I of Notification 1/2017. The term used in S.No. 28 of schedule I is "Dried Areca nuts, whether or not shelled or peeled" and neither it restricts the scope of the term with reference to any processes applied on the said areca nut nor ex....
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....ted the written submission made along with the appeal application. He stated that 'areca nut' & 'betel nut' refers the same product. He stated that they are not aggrieved with the classification of their product under CTH 0802 as held by the Lower Authority though the classification on the 8-digit level, there is difference between their claim and that decided by the Lower Authority, which they do not press and leave the decision to the bench. On the applicable GST rate, the representative stated that their product is to be subjected @5% as per SI.No. 28 Of Schedule-I of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017. He drew the attention of the bench to the minutes of the 3rd & 4th GST Council Meeting and stated that as per the decision of the council, the rates to be fixed in the GST regime should be @5% in respect of the products which suffered a total tax incidence of 3% to 9%. In the pre-GST regime, the tax incidence of their product was only around 5%. He further stated that the words of notification speak of dried Areca nuts, which is their product and at the entry SI.No. 15 of Schedule-II it is specifically excluded. He claimed that the words of notification is clear....
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....ioner 2007 (210) ELT 171 SC = 2007 (3) TMI 6 - SUPREME COURT. The Central Excise Tariff based on which the classification is settled and the prevailing Customs Tariff are aligned. The Classification is decided as '08028090-0ther' in the level and the tariff do not have a -'level but only has '-' Areca nuts' level. Thus we find that the classification of the product has attained finality. With no new changes in either the manufacturing process or the statute on classification there is no further need to litigate. We also take note that for the purposes of GST, the classification at 4 digit level suffice as irrespective of whether the product falls under 08028030 or 08028090, the applicable rate stands decided by the description of the products and the Chapter Heading/Sub-heading CTH 0802. The Lower Original Authority has classified the product under the said CTH 0802 and the appellant also accepts the classification in this level. The disagreement is only in the 8th digit level classification which had already been held to be under 08028090 following the decision of Hon'ble CESTAT Chennai vide its Order dated 12.03.2019 under CTH 08028090 relying upon the decision of Hon'ble Apex Co....
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....tifications are as under: 4th GST Council Meeting: Agenda Item 3: Finalisation of the bands of tax rates under GST regime (Outstanding Agenda item from the 3rd GST Council Meeting) 29. In view of the above discussions, for Agenda item 3, the Council adopted the following decisions in respect of bands of rates of tax in the GST regime and the compensation mechanism for five years: (i) There shall be a category of goods which shall be exempt from GST and this would include items like food grains. (ii) There shall be a low band of tax rate of 5% and would generally cover goods which presently attract combined tax rate of Central Excise and V AT (including cascading on account of these two taxes) between 3% and less than 9%. Such goods are normally consumed by the vulnerable sections of the society or have high impact on inflation. (iii) There shall be a standard tax rate of 12% and would generally cover goods which presently attract combined tax rate of Central Excise and VAT (including cascading on account of these two taxes) between 9% and less than 15%. (iv) There shall be another standard tax rate of 18% and would gene....
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.... xxxviii) Areca nut: Hon'ble Minister from Karnataka stated that fresh areca nut harvested from trees was proposed to be tax at Nil rate, the dry and processed areca nut was proposed to be taxed at rate of 12%. He stated that the weighted average of the combined tax incidence today would not be more than 5%. He stated that farmers sold dried areca nut and its rate of tax should not be more than5% The Hon'ble Minister from Meghalaya stated that areca nut was a perishable agricultural product and green areca nut should be taxed at zero per cent and dried areca nut should be taxed at 5% The Secretary stated that in Chapter 8 of the HSN, a carve out could be considered for dried, unprocessed areca nut to be taxed at 5% which should not be called betel nut. Accordingly, it was proposed that dried areca nuts, whether or not shelled or peeled. might be kept at 5% The Council agreed to this proposal. The rate in respect of HSN 0802 is available in three entries (SI.No. 28, 29 Of Schedule-I & Sl.No. 15 of Schedule II) of Notification No.01/2017and under SI.NO. 49 of Notification No. 02/2017. The entry covered under Notification No. 02/2017 covers all fresh nuts, whether or not shelle....
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....in frozen state or preserved and covered under Chapter 8 were proposed to be charged at 'Nil' rate; Edible fruits and nuts, in frozen state or preserved (other than dry fruits) falling under Chapter 8 were proposed to be taxed at 5%; Dry fruits falling under Chapter 8 were proposed to be taxed at 12%. The 14th GST Council Meeting which approved the proposed rates, has in respect of Dried Areca nuts agreed to tax it @ 5% considering that the weighted average of the combined tax incidence in the Pre-GST regime would not be more than 5%. Accordingly the rate Notifications have been issued. While Sl.No. 28 of Annexure-I of the Notification notifies 'Dried areca nuts, whether or not shelled or peeled'-falling under 0802 to be taxed @ 5%; Sl.No.15 of Annexure-II of the Notification provides the rate @ 12% in respect of 'Other nuts, dried, whether or not shelled or peeled, such as Almonds, Hazelnuts or filberts (Coryius spp.), walnuts, Chestnuts (Castanea spp.), Pistachios, Macadamia nuts, Kola nuts (Cola spp.) [other than dried areca nuts)' (emphasis supplied). Thus, we find that the Dried areca nuts' are to be taxed to GST at the rate of 5% only as the words of the description in the No....