TaxTMI 
TaxTMI 
TaxTMI 
2021 (3) TMI 500
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....er 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 made to such dissimilar provisions, a reference to the Centra....
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....le 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 such nuts are in shell or shelled. In so far as areca nut is concerned the further classification at 8 digit leve....
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....es 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 the present tax revenues of the Centre and States; (iii) Inflation impact of the proposed GST rate structure; and (iv) Mode of raising resources for paying com....
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....r 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 Chapter 8 are proposed to be taxed at the rate of 12%. There was no clarity as to the rate of tax applicable for Dried Areca nuts, after drying. It was in this context, that the Hon'ble Minister for Karnataka, which State accounts for major production of areca nut, has raised the issue, which has....
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....n 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 the case of Azam Laminators Pvt. Ltd. referred supra, has stated that the term areca nut is nothing but scientific name of betel nuts. ii. Hon'ble CESTAT in the case of CC Vs Shounik Export 2010 (261) ELT 501 Tri-Kol = 2009 (8) TMI 1034 - CESTAT KOLKATA, where the Customs Department itself has argued that "areca nut" is the botanical name for "betel nu....
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....ial 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 5 % GST * The appellant has also submitted that products similar to that of the subject product are widely used in the southern States and even in the States of Telangana and Karnataka it attracted VAT at 4% or 5%.Hence, as per the general guidelines framed by the GST Council, the subject product should be taxed under GST only at the rate of 5%, in the absence of any discussion in any of the meetings of the GST Council to deviate ....
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....t 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 0802 9000. It may be noted that there is no distinction even at sub heading level between fresh nuts and dried nuts, but such distinction is necessary only for the purpose of determining the rate of tax applicable. It may be noted that full exemption from tax has been prescribed for the entries in Sl.No 49 of Notification 02/2017. The word "Other nuts" appearing first in the above sl.no would refer to those unspecified nuts, falling under sub heading 0802 9000; and the succeeding words "O....
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....r 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 Court in the case of Crane Betel Nut Powder Works Vs Commissioner 2007 (210) ELT 171 SC = 2007 (3) TMI 6 - SUPREME COURT, where the subject product has all along been referred to as betel nut. * They have viewed that, the process of manufacture employed by their company did not change the nature of the end product, which in the words of the Tribunal, was that in the end product the 'betel nut remains a betel nut'. They have stated that it is clear from the above that the subject product, viz., Dried areca nut / dried bete....
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....oducts 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 excludes anything from its scope. Further, dried areca nut falling under heading 0802, can fall under any of the sub headings of the Chapter at eight digit level, based only on their physical form. In such circumstances, no external aid in the form of minutes of the GST Council meetings could be relied upon to interpret these entries of the relevant notification. * Reliance placed on the decision of the Hon'ble CESTAT in the case of Sree Balaji Transport Vs Commissioner of ST - 2015 (38) STR 651 Tri-Bang = 2015 (10) TMI 53 - CESTAT BANGALORE, wherein by following the decisi....
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....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 and unambisious and the Lower Authority has relied only on the minutes Of the 4th Council Meeting and has decided the applicable rate as 12%. He undertook to furnish the copies of Shipping Bills and also documents on the rate at which their competitors pay GST 5.2 They furnished copies of Shipping Bills/ Export invoices as undertook by them during the hearing. They claimed that the subject goods "Nizam Pakku" is described commonly as "Nizam Betelnut(Areca Nut), which proves that the two terms, viz., Betel nut and Arecanut refer to the same product and used interchangeably. DISCUSSIONS: 6. We have ....
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....espective 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 Court in the case of the Present appellant and also of M/s. Crane Betel Nut Powder Works. We do not find any reason to differ from this since there is no change either in the description or in the process of the subject product. Now, we proceed to determine the applicable rate of the product. 8.1 On the applicable rate, it is the contention of the appellant that * As per the decisions of the 4th GST council meeting, the council resolved to have the following rates of GST viz., Nil, 5% (which would generally cover goods which presently attract combined tax rate of Central Excise and Vat, including cascading o....
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....luding 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 generally cover goods which presently attract combined tax rate of Central Excise and VAT between 15% and less than 21 % (including cascading on account of these two taxes) (v) There shall be a higher band of tax rate of 28% and would generally cover goods which presently attract combined tax rate of Central Excise and V AT equal to or more than 21 % (including cascading on account of these two taxes). (xiv) A Committee of officers of the Central Government and the State Governments shall carry out an exercise of fitment of goods in the various slab rates, namely exempted category, lower rate, the two standard rates and the higher rate on the basis of the principles enumerated at serial number (i) to (v)....
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....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 shelled or peeled falling under 0802 and exempts the same. The Dried Nuts are listed under Notification No. 01/2017. The relevant entries of Notification No. 01/2017-C.T.(Rate) are as follows: Schedule I-2.5% Sl.No. Chapter / Heading / Sub- heading / Tariff item Description of Goods 28 0802 Dried areca nuts, whether or not shelled or peeled 29 0802 Dried chestnuts (singhada), whether or not shelled or peeled Schedule II-6% Sl.No Chapter / Heading / Sub-heading / Tariff item Description of Goods 15 0802 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] 8.3 4th GST Council Meeting, has decided on a clear mandate....