TaxTMI 
TaxTMI 
2021 (12) TMI 268
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....der the MPGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or MPGST Act would be mentioned as being under the GST Act. 3. BRIEF FACTS AND SUBMISSION OF THE APPLICANT: - (i) That Applicant is company registered under Company's Act 1956 and is engaged in manufacturing of Epoxidised Soyabean Oil in its plant located at Plot No. 31, Sector II, Pithampur (M.P.) having obtained GST Registration No. 23AAACD5735C1Z7 since 01.07.2017. (ii) The relevant entries of the Rate Notification are reproduced here under :- Sr.No. Entry No. Chapter Heading Description of Goods Schedule Rate of Tax 1. 90 1518 Vegetables fats and oils and their fractions, boiled, oxidized, dehydrated, sulphurised, blown. polymerized by heat in vaccum or in inert gas or otherwise I 5% 2. 27 1518 Animal Fats and animal oils and their fractions, boiled, oxidized, dehydrated, sulphurised, blown. Polymerised by heat and vaccum or in inert gas or otherwise chemically modified, excluding those of heading 1516; II 12% 3. 27. 1518 Inedible mixtures or preparations of animal o....
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....hysical appearance ' of the soya bean oil remains the same even after the chemical modification hence as per the applicant it falls under serial number 90 of schedule 1 of Notification number 1/2017 GST (Rate) attracting GST @2.5% and SGST @ 2.5% (iv). The Applicant submitted that under the pre-GST regime ESO was exempted from payment of central excise duty in terms of SI. No. 11 to the Notification No. 12/2012- CE dated 17.03.2012 as amended issued under Section 5A of the erstwhile Central Excise Act, 1944 which reads as under: Sl.No. Chapter or heading or subheading or tariff item of the First Schedule Description of excisable goods Rate Condition No. 11 1517 90 or 1518 All goods (other than margarine and similar edible preparations) Nil - Further, ESO was attracting levy of VAT/Sales Tax @4% or 5% as amended from time to time. Thus, it is clear that overall, the net incidence of indirect tax on ESO was 4% to 5% depending upon the rate prescribed in the schedules appended to State VAT Acts. (v) The applicant submits that the product "Epoxidised Oil" is primarily made up of Soya edible oils, which are vegetable fats/oils and not ani....
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....y covered elsewhere. For example: - (i) The Boiled or oxidized oils are obtained by heating oils, generally with the addition of small quantities of oxidizing agents. These oils are used in the paint and varnish industry. (ii) Blown oils are partially oxidized and polymerized oils produced by blowing air through the oil, with application of heat. They are used for the manufacture of insulating varnishes, imitation leather and, when mixed with mineral oils, lubricating preparations (compound oils). (iii) Dehydrated castor oil is obtained by dehydrating castor oil in the presence of a catalyst. It is used in the preparation of paints or varnishes. (iv) Sulphurised oils are oils which have been treated with Sulphur or Sulphur chloride to cause polymerization in the molecules. Oil thus processed dries more rapidly and forms a film which absorbs less water than the usual film of dried oil, and has greater mechanical strength. Sulphurised oils are used for anti-rust paints and varnishes. (v) Oils polymerised by heat in vacuum or in inert gas are certain oils (particularly linseed oil and tung oil) which have been polymerised by simply heating,....
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....o.27 of Schedule II. (x). On a conjoint reading of Part A of the Explanatory Notes & its applicability to the facts of applicant's case, the following can be observed: SI.No. Para 'A' of the Explanatory Notes Facts of the Applicant's Product 1. It covers vegetable fats and oils and their fractions The Oil, viz. Epoxidised Soya Bean Oil is a vegetable oil. 2. The products covered herein are subjected to processes which modify their chemical structure thereby improving their viscosity, drying power (i.e., the property of absorbing oxygen when exposed to the air and forming elastic films) or modifying their other properties, provided they retain their original fundamental structure. The Oil is subjected to epoxidation process, which is a chemical treatment resulting in better oxirane oxygen contents and higher molecular weight. The Oil manufactured retains its fundamental structure as well as physical appearance even after the chemical treatment. 3. It includes Epoxidised oils obtained by treating, for example, soya bean oil with peracetic acid pre-formed or formed in situ by reaction between hydrogen peroxide and acetic acid in the ....
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....er the general entry. In this context, we submit that entry SI. No 27 of Schedule II covers boiled, oxidised, dehydrated, sulphurised, blown, polymerised by heat in vacuum or in inert gas or otherwise chemically modified animal oils and animal fats and its fractions. The said entry No 27 includes within its purview inedible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this chapter, not elsewhere specified of included. Therefore Epoxidised Soya Oil cannot be covered under entry no. 27 of Sch. II. (xii) The applicant submitted that, since the entry contained in Schedule I is more specific and covers all kinds of vegetable oils, whether or not chemically modified and whether or not such vegetable oils are edible. Hence, the Epoxidised oil manufactured by the Applicant from the vegetable oils, merit classification under Schedule I of Chapter Heading 1518. In view of the specific entry under the GST provisions, the product "Epoxidised oil" should fall under Schedule-I and should be taxable at 5%. Moreover, the entry under Schedule-I does not specifically mention about the vegetable fats or oils being edible or ined....
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....ion dated 28-6-2017 and the applicable rate of tax is 5%.(Copy annexed),It is true that Advance Ruling does not have a binding force on other assesse, but the same has been relied upon to reiterate the fact that where the oil is manufactured out of vegetable oils whether chemically modified or not, the same merits classification under Schedule-I under tariff heading 1518.The Applicant submits that the product manufactured by the Applicant i.e. "Epoxidised oil " is also a similar kind of product. As the entry specifically uses the term "otherwise chemically modified which means that even if the mixture of edible oils is modified chemically. still the same would fall under Schedule-I. (xv) Under such circumstances, the Oil, which is in the nature of a 'vegetable oil" qualifying the description specified in the Entry, will classify under Chapter Heading 1518 of the CTA, 1975 as supported by the following judicial precedents(Copies Annexed):- (i). CCE, Surat vs. Consumer Plastics Pvt. Ltd. 2006 (194) E.L.T. 214 (Tri. - Mumbai); (ii). Adjudication Order No. 15/COLLR/CEX/ADJ/94 dated 29.03.1994 passed in the case of M/s. National Peroxide Ltd., Dewas by the Ld. C....
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....d item namely hydraulic cylinder the tariff heading 8421 cover only engine and motor. No evidence has been put firth to show which hydraulic cylinder manufactured by them can be called an engine. Therefore as already discussed above the Custom Tariff mention cylinders, whereas Excise Tariff cover only engines therefore hydraulic cylinder is clearly under the heading 8431 of Central Excise tariff and need no interference The Appeal is filed by appellant is decided in above manner. That the Authority of Advance Rulings, Andhra Pradesh in case of M/s. Agrawal Industries Private Limited (copy enclosed) vide Para 1, 3, 4 & 5 have held as follows :- 1. M/s. Agrawal Industries P. Ltd Plot No. 5A/1 Vakalapudi, IDA Kakinada533007 (hereinafter also referred as applicant) having GSTIN 37AACCA0094R1ZA are engaged in manufacturing of ingredients of poultry feed, particularly involved in the manufacturing of substitute of Rice bran oil, which is used in the preparation of poultry feed. They named their product as "Energy -G premium Oil" and stated that their product is inedible or not fit for human consumption and purely, for manufacturing of poultry feed. 3. A personal h....
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.... in that oil and is manufactured by processing of oxidation will fall entry number 90 of Schedule-I of GST rate Notification No. 11201 7-Central Tax (Rate) dated 28.07.2017 and will attract 5% IGST 8. It is settled law that Specific entry will prevail over Residual entry. Entry number 90 being specific for epoxidised soya oil, nothing is mixed, it is not a mixture. It is edible in nature hence epoxidised soybean oil will specifically fall under enter number 90 of Schedule-I of GST rate Not No. 1/2017-Central Tax (Rate) dated 28:07.2017 and will attract 5% IGST. 9. It is also a settled law that no word can be added in the entry prescribed in the notification. Thus for classifying the product, End Use condition cannot be added. 10. We would like again to be heard in person before making a decision on our AAR application. - 4. QUESTIONS RAISED BEFORE THE AUTHORITHY:- The following questions have been posted before the Authority in the application:- Whether Epoxidised Soya bean Oil can be classified under tariff item 1518 of Schedule-I (taxable at 5%) or Schedule-II (taxable at 12%) of Notification No. 1/2017-Central Tax (Rate) dated June 28, 2017, a....
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.... The heading of chapter heading 1518 is reproduced below (As per Customs Tariff as adopted by GST) :- "1518 :- Animal or vegetable fats and Oils and their fractions, boiled, oxidized, dehydrated. sulphurised, blown. polmerised by heat in vacuum or in inert gas or otherwise chemically modified, excluding those of heading 1516: inedible mixtures or preparation of animal or vegetable fats or oils or of fractions of different fats or oils of this chapter. not elsewhere specified or included." As per the heading given above, we find that the Epoxidised Soyabean Oil is covers under the above chapter heading 1518. 7.3 Further, in case of Commissioner of Central Excise, Surat-II Vs. Consumer Plastic Pvt. Ltd. 2006 (194) E.L.T.214 (Tri.Mumbai), the Tribunal held that the Epoxidised vegetable Oil used as plasticisers or stabilisers in plastic industry, classifiable under Chapter 15 of Central Excise Tariff and not under Heading 38.12 ibid. Hence, we find that there is no doubt for classification of Eposidised soyabean oil under chapter heading No.1518. 7.4 For find out that whether the product Epoxidised soyabean oil is covered under the Schedule-I or Schedule-II of Noti....
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....ification of goods under tariff item 1518 but want to covers the said goods under entry No.27 of Schedule-H without any supporting. Further no justification has been given why the said product is not covered under Entry No.90 of Schedule-I .We observe that in the Entry No.27 of Schedule -II of the Notification No.01/2017-Central Tax(Rate) dated 26.06.2021 only those products are covered which are not elsewhere specified or included whereas in this case the Epoxidised Soyabean Oil is rightly specified/included under entry No.90 of schedule-1, hence no relevance of entry no.27 of Schedule-II. The applicant is manufacturing and supplying the said goods epoxidised Soya Oil classifying under heading no.1518 and paying tax @5% under entry No.90 schedule-I and regularly filed return to the department. Further, as the said product specifically covered under the entry no.90 of Schedule I as mentioned above, the question of entry no.27 of schedule-II does not arise. 7.8 On. the similar issue, in case of M/s Agrawal Industries Pvt. Ltd., the Andhra Pradesh Authority for Advance Ruling vide order dt.8/6/2018 observed that since the product under question is manufactured out of Vegetable fat....