TaxTMI 
TaxTMI 
2021 (1) TMI 1194
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....chments. The applicant in his application has sought advance ruling on following question- "What should be the classification and GST rate on supply of Popcorn under Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 amended till date?" 3. As per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant. 4. The applicant has submitted that- (i) the applicant is desirous of obtaining registration under CGST Act for undertaking business of selling eatable items and hence covered under the definition of the term "applicant" for the purpose of presenting the application before the Advance Ruling Authority under the GST Regime (ii) The raw material ingredients for preparation of the product 'Popcorn' are: • Maize corn • Edible oil • Salt & Seasoning for flavours like salted, butter, tomato, cheese, chocolate etc. (iii) The production process is as under: • Turn on the kettle and the warmer • Mix the ingredients in appropriate q....
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....-alcoholic beverages 21069060 --- Food flavouring material 21069070 --- Churna for pan 21069080 --- Custard powder --- Other : 21069091 ---- Diabetic foods 21069092 ---- Sterilized or pasteurized millstone 21069099 ---- Other Relevant Supplementary Notes to Chapter 21 state under: 5. Heading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter alia, includes: (b) preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption; 6. 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. Such products remain classified in these sub-headings irrespective of the nature of their ingredients. (v) the Heading 1904 consists of two parts: • The first part is "Prepared foods obtained by the swelling or roasting of cereals or cereal products (for example, corn flakes)". The basic requirements for the app....
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.... ingredients except cereal and hence according to the principle laid by Hon'ble Supreme Court in above judgment, such flavoured Popcorns must be classified under HSN 2106. (ix) The above view has also been taken by Hon'ble Tribunal Delhi in case of Collector of Central Excise, Coimbatore Versus Nektar Fruit Products 1996 (88) E.L.T. 421 (Tribunal) where the Tribunal has clearly upheld that even addition of salt and sugar is a process in addition to swelling or roasting of cereal and it will exclude the product from HSN 1904 and bring the same under Miscellaneous Edible preparations HSN 2106. (x) In Pepsi Foods Ltd. Versus Commr. of Cus. & C. Ex., Chandigarh-II 2003 (151) E.L.T. 180 (Tri. - Del.), Delhi Tribunal held that Cheetos wheels & Lehar Kurkure, classifiable under sub-heading 2108.99 of Central Excise Tariff Act, 1985 as an edible preparation. Such items, not being obtained by swelling or roasting of cereals etc., not classifiable under sub-heading 1904.10 ibid, as sought by Revenue. The Tribunal has held that these products are to be termed as Namkeen covered under the Note 10 (which is Note 6 in Current Tariff) which states that tariff item 2106 9....
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....scription shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (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 component which gives them their essential character, in so far as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numeric order among those which equally merit consideration. (xvi) the HSN 1904 does not specifically cover the product 'Popcorn'. Products like Corn Flakes or Mudi which are actually covered in the description of Heading 1904 are specifically mentioned in the....
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.... [other than roasted gram, sweetmeats, batters including idli/dosa batter, namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, khakhra, chutney powder, diabetic foods] 9% (xix) As already submitted in the facts, the brand name 'Yo Popcorn' will be registered under the applicable laws in the country. The 'Popcorn' will be sold in retail packs. Hence in the view of the applicant the product is classifiable under Entry 46 of Schedule II of Notification No. 01/2017 - CT(Rate) dated 28.06.2017 and hence taxable at the rate of 12% under GST. 5. The application for advance ruling was forwarded to the Jurisdictional GST Officer to offer their comments/views/verification report on the matter. The Assistant Commissioner, CGST & Central Excise Division II, Agra vide her letter C.No 06/Misc/Tech/CGST/Div-II/Agra/17/3406 dated 04.12.2020 submitted that the item popcorn should fall under the HSN 210690. The Additional Commissioner Grade-1, Commercial Tax, Agra Zone vide his letter C.No. 1371/GST-Advance Ruling/2020-21/Ad.Com.Grade I, Va. Ka, Aa. Dated 27.11.2020 forwarded report dated 11.11.2020 of the Deputy Commission....
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....it classification under HSN 210690 and the jurisdictional authorities of (Centre as well as state) had also in agreement of the view that 'popcorn' merits classification under HSN 2106. The applicant had argued that their product is excluded from the HSN 1904 as their product is not just by swelling or roasting of cereals and there are more ingredients involved in the manufacture of popcorn. Manufacturing process involves mixing of oil and salt and seasoning for bringing the flavor like butter, cheese, tomato or chocolate popcorns. 12. The applicant had also submitted that in view of ingredients being oil, salt and seasonings, the product is aptly classifiable as namkeen under chapter 2106. The 'popcorn' has not been defined under Customs Tariff Act, 1975, the CGST Act, 2017, the UPGST Act, 2017, the IGST Act, 2017 or the Notifications issued under the CGST Act, 2017 / UPGST Act, 2017 / IGST Act, 2017. It is now well settled principle of interpretation of statue that the word not defined in the statute must be construed in its popular sense, meaning "that sense which people conversant with the subject matter with which the statue is dealing, would attribute to it....
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....nd it is construed entirely different from namkeen in commercial parlance. As such, the popcorn does not merit classification under HSN 210690. 15. It is observed that the Explanation (iii) and (iv) to the Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 provides as follows :- [Explanation. - For the purposes of this notification, - (i)............................ (ii)............................ (iii) "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.] 16. Further, Hon'ble Supreme Court, in the case of L.M.L. Ltd. Vs. Commissioner of Customs [Civil Appeal No. 3764 of 2003, decided on 21.09.2010 reported at [2010 (258) ELT 321 (S.C.)], has observed in para 12 of its order as follows :- ....