TaxTMI 
TaxTMI 
2021 (10) TMI 54
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....he market as a product leader. The applicant has been selling varied types of 'Mixed Flour' under the 'Talod' brand name. 2. The applicant submitted that ready to mix/instant mix is a flour of grains and pulses mixed with spices and condiments; that recipe for preparing farsan/eatables is printed on the packet of product and by following the direction of recipe, farsan/eatables can be prepared instantly after adding such other ingredients as required. The process followed by the applicant (Talod) was narrated as under: (a) Talod purchases food grains and pulses from open market. (b) Such pulses are sorted and washed and then send to grinding machine. (c) Pulses are grinded into flour in grinding machine e.g. where Grams is purchased, it results into gram flour by following grinding process. In certain cases, Talod purchases grinded flour directly from the vendors. (d) Now, certain spices are mixed in flour and such mixed flour is packed in various packings. (e) Mixed Flour (commercially known as 'Instant Mix Flour') are sold in open market or through distributors to consumers. (f) End consumer of such 'Instant Mix Flour' is r....
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.... Citric Acid, Sodium Bicarbonate, Turmeric. 2. Gota Mix Flour Grams Flour, Sugar, Iodised Salt, Chili Powder, Garam masala (powder of Chili,Cloves, Baciliyam, Black Pepper, Coriander, TejPatta (Clove Leaves), Sodium Bicarbonate, Citric Acid, Asafoetida, Ajma, Sounff, Chutney powder contacts, Wood Apple powder form (LimoniaAcidissima). 3. Dhokla Mix Flour Rice, Udad dal, Chana dal, Sugar, IodisedSalt, Sodium Bicarbonate, Citric Acid, Asafoetida. 4. Handwa Mix Flour Rice, Udad dal, Chana dal, Sugar, Iodised salt, Sodium Bicarbonate, Citric Acid, Turmeric, Chillies, Garam Masala (powder of Curry Leaves Bundian, Fennel Seeds, Black Pepper, TajPatta, Clove Leaves). 5. Idli Mix Flour Rice, Udad dal, IodisedSalt, Sodium Bicarbonate, Citric Acid. 6. Dosa Mix Flour Rice, Udad dal, Iodised Salt, Sodium Bicarbonate, Citric acid. 7. Dahi-wada Mix Flour Moong dal, Udad dal, IodisedSalt, Sodium Bicarbonate, Citric Acid. 8. Dalwada Mix Flour Moong dal, Udad dal, IodisedSalt, Sodium Bicarbonate, Citric Acid. 9. Khichu Mix Flour Paddy & Sago (in powder form), IodisedSalt, Cumin Seeds, Carbonate of Soda. 10. Upma Mix Flour....
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....Mix Flour 75% 19% 94% 0% 0% 94% 6% 8. Dalwada Mix Flour 10% 85% 95% 0% 95% 5% 9. Medu Vada Mix Flour 2% 84% 86% 9% 9% 95% 5% 10. Pudla Mix Flour 96% 96% 0% 96% 4% 11. Moong Bhajiya Mix Flour 10% 85% 95% 0% 95% 5% 12. Chorafali Mix Flour 98% 98% 0% 98% 2% 13. Bhajiya Mix Flour 93% 93% 0% 93% 7% 14. Upma Mix Flour 10% 10% 20% 70% 70% 90% 10% 15. RavaIdli Mix Flour 10% 10% 20% 70% 70% 90% 10% 16. Muthiya Mix Flour &nb....
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.... & Customs (CBIC) Circular No. 80/54/2018-GST dated 31.12.2018. 7.2 The GAAR, observed that unprocessed flour obtained only by the milling and sieving of cereals, leguminous vegetable including peas, lentils etc. are to be classified under Chapter 11 alone; that in the instant case, the product has a mixture of various flours such that multiple tariffs are involved i.e. headings 11.01, 11.02, 11.03 and 11.06. The GAAR thereafter referred to Rule 3 of the General Rules for the Interpretation of CTA, 1975 and noted that as per Rule 3(b), mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale which cannot be classified by reference to (a), shall be classified as if they consisted of the material or components which gives them their essential character, in so far as the criterion is applicable. Accordingly, as the products mentioned at Sl. No. 1, 2, 4 and 7 to 13 above have essential characters of leguminous flour and therefore the GAAR held those products to be classifiable under Tariff Item 1106 10 00 of the CTA, 1975 attracting Goods and Services Tax @ 5% as per Sl. No. 59 of Schedule - I of Notific....
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....nd Services Tax @ 18% up to 14.11.2017 as per Sl. No. 23 of Schedule - III and 5% with effect from 15.11.2017 as per Sl. No. 100A of Schedule - I of Notification No. 1/2017-Central Tax (Rate). 7.6 The GAAR further held that the Chutney Powder, when supplied with Gota Mix Flour and Bhajiya Mix Flour, is not a composite supply of goods, but it will be considered as a mixed supply of goods. 7.7 The GAAR, vide Advance Ruling No. GUJ/GAAR/R/43/2020 dated 30.07.2020 ruled as follows - (a) Khaman mix flour, Gota mix flour, Handwa mix flour, Dahiwada mix flour, Dalwada mix flour, Meduvada mix flour, Pudla mix flour, Moongbhajiya mix flour, Chorafali mix flour, Bhajiya mix flour, Dhokla mix flour, Idli mix flour and Dosa mix flour are classifiable under sub-heading 11061000 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975). They appear at Entry No.59 of Schedule-I of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 and the GST liability on all these products is 5% (2.5% CGST + 2.5% SGST). (b) Upma mix flour, Ravaidli mix flour and Muthiya mix flour are classifiable under sub-heading 23023000 of the First Schedule to the Customs Tariff Act, ....
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....ding 11.06 and Explanatory Notes of HSN related to it as well as various entries of Chapter Heading 21.06, Supplementary Note 6 of Chapter 21 of CTA, 1975 and Explanatory notes to HSN in respect of Chapter Heading 21.06. 8.4 The appellant has submitted that as per Supplementary Note 6 of Chapter 21 of the CTA, 1975, 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; that such products remain classified in these sub-headings irrespective of the nature of their ingredients. 8.5 It has also been submitted that it is mentioned in the Explanatory Notes to HSN in respect of heading 21.06 that - "provided that they are not covered by any other heading of the Nomenclature, this heading covers - preparation for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.) for human consumption. 8.6 The appellant has further submitted that for manufacture of products in question, various ingredients such as Chick Peas Flour, Bengal Gram Dal, Green Gram Dal, Black G....
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.... classified under heading '1106' having brief description 'Meal and powder of the dried leguminous vegetables of heading 0713'. It has further been submitted that some of the products which are prepared from wheat granules shall be classified under Heading '1103' and 'Khichu Mix Flour' prepared from Rice Flour shall be classified under Heading '1102'. 9.2 As regards Heading '2106' having brief description 'Food preparation not elsewhere classified', the applicant has submitted that the following type of transactions can be included in the said entry - (a) Ready for consumption form (b) Food preparations where there is minimal process required or no process required for human consumption (c) Residual entry; if not classified in any other chapter. The applicant has submitted that the Instant Mixed Flour cannot be classified under Chapter Heading '2106' due to following reasons - (a) The said Mixed Flour sold to customers are not in the form of ready to eat. (b) For preparing various Indian dishes, one has to not only carry out mixing process but also need to add spices, condiments and flavours etc. and other things as may be required....
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....ents has been provided based on actual practice followed by him; that at the time of hearing as well, Ld. Authority had not demanded any scientific report related to it. 9.6 The applicant has submitted that the Chutney Powder should be classified under HSN 2106 and GST Rate applicable should be 5%. It has been submitted that he supplies Chutney Powder in a pouch along with Gota Mix and Bhajiya Mix, and no extra amount is collected for such Chutney Powder, hence supply of Gota Mix and Bhajiya Mix Flour along with Chutney Powder should be considered as Composite Supply. It has further been submitted that Chutney Powder when supplied with Gota Mix Flour and Bhajiya Mix Flour, should be considered as Composite Supply having HSN of principal supply i.e. 1106 and 5% GST should apply. 9.7 The applicant has also submitted recipe of four products and submitted that the products are neither ready to eat nor a food preparation as mentioned in HSN 2106, but the products are merely mixture of flours with some additives in it. FINDINGS :- 10. We have carefully gone through and considered the appeal filed by the appellant CGST department, written submission filed by the applicant, sub....
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.... 11 of the CTA, 1975. 13.2 In respect of Chapter Heading 11.01, the Explanatory Notes of HSN inter-alia provides as follows - "Flours of this heading may be improved by the addition of very small quantities of mineral phosphates, anti-oxidants, emulsifiers, vitamins or prepared baking powders (self-raising flour). Wheat flour may be further enriched by an addition of gluten, generally not exceeding 10 %. The heading also covers "swelling" (pregelatinised) flours which have been heat treated to pregelatinise the starch. They are used for making preparations of heading 19.01, bakery improvers or animal feeds or in certain industries such as the textile or paper industries or in metallurgy (for the preparation of foundry core binders). Flours which have been further processed or had other substances added with aview to their use as food preparations are excluded (generally heading 19.01). The heading also excludes flours mixed with cocoa (heading 18.06 if they contain 40% or more by weight of cocoa calculated on a totally defatted basis, or heading 19.01 if less). In respect of Chapter Heading 11.02 also, it has been inter-alia ....
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....e Chapter Headings 11.03 and 11.04. 13.4 Further, the Chapter Heading 11.06 covers "Flour, Meal and Powder of the dried leguminous vegetables of Heading 0713, of sago or of roots or tubers of Heading 0714 or of the products of Chapter 8". As per Rule 1 of the General Rules for the Interpretation of CTA, 1975, for legal purposes, classification shall be determined according to the terms of the headings and any relative Section of Chapter Notes. Thus, the classification of the product is required to be determined in accordance with the terms of the headings. As per Chapter Heading 11.06, it covers Flour, Meal and Powder of the dried leguminous vegetables of Chapter Heading 07.13 and other specified products. As the products of the applicant contain Spices and other ingredients in different proportions, which are not mentioned in the Chapter Heading 11.06 or the relevant Explanatory Notes of HSN, the said products are not covered under Chapter Heading 11.06. 13.5 The applicant has referred to CBIC Circular No. 80/54/2018-GST dated 31.12.2018, which has inter-alia clarified the applicability of GST on 'Chhatua or Sattu' as follows - 3.1 Doubts have been raised regarding ....
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....sent case. 13.7 In view of the foregoing, we hold that none of the products of the applicant merit classification under Chapter 11 of the CTA,1975 and specifically under Chapter Headings 11.01, 11.02, 11.03, 11.04 or 11.06 of the CTA,1975. 14.1 The GAAR found that the Upma Mix Flour and RavaIdli Mix Flour contain 70% Suji Flour (Wheat Granules), hence these products are classifiable under Chapter Heading 11.03; Muthiya Mix Flour contain 90% Wheat Flour, hence it is classifiable under Chapter Heading 11.01; and Khichu Mix Flour contain 95% Rice Flour, hence it is classifiable under Chapter Heading 11.02. However, as the details in respect of Starch Content, Ash Content, Rate of passage through a sieve in respect of these products were not furnished by the applicant, the GAAR concluded that the said products would be classifiable under Chapter Heading 23.02 of the CTA,1975. 14.2 We have already held that the products of the applicant, including Upma Mix Flour, RavaIdli Mix Flour, Muthiya Mix Flour and Khichu Mix Flour, are not classifiable under Chapter 11 of the CTA, 1975.Therefore, the view of the GAAR to initially classify these products under Chapter Heading 11.01 and 11....
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....of HSN for Chapter Heading 21.06 provides as follows :- "Provided that they are not covered by any other heading of the Nomenclature, this heading covers : A) Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.), for human consumption. B) Preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption. The heading includes preparations consisting of mixtures of chemicals (organic acids, calcium salts, etc.) with foodstuffs (flour, sugar, milk powder, etc.), for incorporation in food preparations either as ingredients or to improve some of their characteristics(appearance, keeping qualities, etc.) (see the General Explanatory Note to Chapter38). ......." Thus, in view of the Explanatory Notes of HSN, the preparation for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.) for human consumption, and preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption, are classifiable under Chapter Headi....
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....preparation processes before such product(s) can be consumed, is no ground to take these products out of Chapter Heading 21.06 of the CTA, 1975. 15.5 The applicant has relied upon the Determination Orders issued by the Gujarat VAT authorities in the cases of Kitchen Express Overseas Ltd., Santej, Vitagreen Products Pvt. Ltd., Matoda and M T R Foods Pvt. Ltd., Ahmedabad wherein the Instant Mix Products (Gota Flour, Khaman Flour, Dalwada Flour, Dahiwada flour etc.), similar to the products of the applicant, were held to be covered under Entry 12(ii) of Schedule-I of the Gujarat Value Added Tax Act, 2003, covering "Flour of cereals and pulses except Maize Flour". In this regard, it is pertinent to note that for the purpose of Goods and Services Tax, classification as per CTA, 1975 has been adopted, which in turn is based on the Harmonised System of Nomenclature, which was not the case with the Schedule-I of the Gujarat Value Added Tax Act, 2003. Therefore, the Determination Orders issued under the Gujarat VAT Act, 2003 are not applicable in the present case. 15.6 it is also observed that in the case of Commissioner of Central Excise, Ahmedabad Vs. R. M. Foods [2010 (249) E.L.T. ....
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.... III of Notification No. 1/2017-Central Tax, as amended, attracting Goods and Services Tax @ 18% (CGST 9% + SGST 9%), though some of the specific products of Chapter Heading 2106 excluded from this entry are covered under different entries of Schedule-I or Schedule-II, attracting Goods and Services Tax @ 5% or 12%. None of the aforesaid 17 products of various Instant Mix / Ready Mix Flour being supplied by the applicant are the products which have been excluded from the entry at aforesaid Sr. No. 23 of Schedule - III or which have been specifically included in any other entry of other Schedule of Notification No. 1/2017-Central Tax, as amended or in any of the entries of Notification No. 2/2017Central Tax. We, therefore hold that the products of various Instant Mix / Ready Mix Flour being supplied by the applicant and classifiable under Chapter Heading 2106 of the CTA, 1975 are covered by aforesaid entry at Sr. No. 23 of Schedule - III of Notification No. 1/2017-Central Tax (Rate), as amended, and are leviable to Goods and Services Tax @ 18% ad-valorem (9% CGST + 9% SGST). 17. In view of the foregoing, we allow the appeal, modify the Advance Ruling No. GUJ/GAAR/R/43/2020 dated 3....