TaxTMI 
TaxTMI 
2019 (3) TMI 1867
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Mahua Oil Cake/Rice Bran Oil cake used in the manufacture of solvent extracted oil? 2. On the basis of the facts disclosed in the application, the oral and written submission made at the time of personal hearing, documents produced during the personal hearing and the views submitted by the jurisdictional Officer, CGST and CX, Lucknow on the issue, the Authority for Advance Ruling vide their Order 06 dated 25.05.2018 passed the point wise ruling as follows:- a) Whether Mahua De-oiled cake/ De-oiled Rice Bran being used as an ingredient of Cattle Feed, Poultry Feed and other animal feeds and is 'Waste generated' during the Solvent Extraction process? Ans. - Mahua De-oiled cake/ De-oiled Rice Bran is a by-product occurred during the Solvent Extraction process, which is used as an ingredient of Cattle Feed, Poultry Feed and other animal feeds. b) Whether the applicant is eligible to get entire tax input credit of GST paid on purchase of Mahua Oil Cake/Rice Bran Oil cake used in the manufacture of solvent extracted oil? Ans. - The Input credit of GST paid on purchase of Mahua Oil Cake/Rice Bran Oil cake used in the manufacture of solvent extracted oil is partially allowed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., Advocate on behalf of the party appeared for personal hearing. During the oral submission they stated that they have already submitted their detailed written submission further they requested that they will submit some additional written brief on the subject 11.03.2019 and there is nothing more to add. In addition to the written submission applicant also submitted letters dated 09.03.2019 & 13.03.2019 regarding Addendum & final submission, in which applicant clarified that the sole issue for the Appellant is only with regard to Mahua De-oiled Cake (Mowra) and currently neither is there any issue with regard to classification of D-oiled Rice Bran nor the Appellant is manufacturing the same. Discussion and Findings We observe that the issues placed before the Appellate Authority for advance ruling are:- (i) Whether de- oiled mahua cake would merit classification under chapter 23069011 of the CGST Tariff or under the head 23069090 of the Tariff. (ii) Whether in the first round of issue placed before the authority the chapter note to Chapter 23 of the GST Tariff shall have an overriding effect for exclusion of Mahua de-oiled cake from Chapter 2309. (iii) Whether the Mahua D....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ommercially lucrative to the solvent extractor. The ld. Counsel has tried to support his claim of de-oiled cake being waste by insisting that its production is 'unintended' and that it is 'technological necessity'. We find these terms inapplicable since after the oil is extracted from the pellets, the manufacturing process does not end at that point. In fact, the pellets undergo Desolventising process i.e. separation of normal-Hexane from the De-oiled bran subsequent to which the de-oiled bran is chemically tested for their oil and silica content to meet clients' specifications and finally it is sent to the bagging section for packing into branded unit packaging. It is unimaginable that investment into a desolventising plant and bagging unit will be made for a product which is allegedly 'unintended' or 'mere technical necessity'. In fact the de-oiled cake is a very much intended product in as much as it may affect the overall financial health of the company. Thus, through an elaborate process, chemical testing and packing, the de-oiled cakes are finally manufactured made marketable. So, the appellant's contention that the de-oiled cake is not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ke care of these situations, which is the purpose behind that provision. Approach of the High Court, in fact, defeats the said purpose. Therefore, there was no reason for departing from the principle of literal construction in a taxing statute. It is settled proposition of law that taxing statutes are to be interpreted literally [See Commissioner of Income Tax-III v. Calcutta Knitwears, Ludhiana - (2014) 6 SCC 444, State of Madhya Pradesh v. Rakesh Kohli & Anr. - (2012) 6 SCC 312 and V.V.S. Sugars v. Government of Andhra Pradesh & Ors. - (1994) 4 SCC 192]." Definition of 'supply' Under section 2(92) read with section 3 'supply' includes all forms of supply of goods and/or services such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed, to be made for a consideration by a person in the course or furtherance of business. Schedule I specified the supply. The word Supply replaces the operative term sale. Thus, no scope has been left for any confusion and the definition includes every term which is in any form liable to be termed as sale. Even the supply which is made or agreed to be made without a consideration will also amount to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d Rice Bran has been fully exempted from CGST vide entry no. 102A of Notification No.07/2018-CT(R) dated 25.01.2018. So, in terms of Section 17(2) of CGST Act 2017, the input credit attributable to the supply of this exempted goods i.e. de-oiled rice bran has to be reversed by the appellant. As far as the classification of de-oiled mahua cake is concerned we find that the applicant have in their submission claimed that the same merits classification under specific entry under chapter 2306 and in no manner classification be resorted the residual entry because it would be against the principles of classification to deny the proper percentage and consign the product to the residuary item. Before, we proceed further we come to chapter 23.06 which reads as under- "Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of vegetable fats or oils, other than those of heading 2304 or 2305 [other than cotton seed oil cake]" Further, entry no. 2304 covers "oil-cake and other solid residues whether or not ground or in the form of pellets, resulting from the extraction of soyabean oil whereas entry no. 2305 covers oil cake and othe....