TaxTMI 
TaxTMI 
2021 (12) TMI 373
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....icant 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 original 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 ab-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. Subject: GST - Appeal filed by M/s. Sushi Pet Nutri science, Secunderabad under Section 100 (1) of TGST Act, 2017 against Advance Ruling TSAAR Order No.04/2020 dated 24.6.2020 passed by the Telangana State Authority for Advance Ruling - Order-in-Appeal passed - Regarding. 1. The subject appeal has been filed under Section 100 (1) of the Telangan....
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.... feed and aqua feed by these industries. The major raw material for manufacturing poultry meal and poultry fat is chicken wastages such as chicken legs, chicken head, intestine, feathers, skin etc. which is bought from the chicken stall owners in twin cities and other parts of Telangana State. The manufacturing process was detailed as follows:- (i) The poultry offal is dumped in to the batch cookers through screw conveyer, Cooker operator cook for 30 minutes and dry the resulting for 4 hours in same cooker, then the resulting material is put in storage bins which is in to semi-finished stage. (ii) The semi-finished product contains a high level of fat which will be separated by using a fat press/screw press. Poultry meal coming from screw press will be sent to the hammer mill for making size reductions and then it is passed through a sieve. (iii) The supplement is sent to a blender where anti-oxidants are added to prevent the supplement from oxidation. The supplement is then packed in HDPE bags and stored for sale. Final product is in brown color. The product contains Minerals, proteins and amino acids and is used as one of the raw ingredients by animal/a....
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....l feed is a mixture of product of vegetable or animal origin in their natural state fresh or preserved or products derived from the industrial processing of organic or inorganic substances, whether or not containing additives for oral feeding in the form of complete feed. Concentrates provide essential extra energy and protein. In the product of poultry meal which is a concentrate contains proteins, some fat, minerals and amino acids. The animal feed manufacturers use the product as per their standard formula in their manufacturing process of compound animal feed so that the feed will become whole some or complete feed which will help improve the health of the animal. They also referred to the definition of Concentrate feeds, as PER FAO (Food and agriculture Organization) as under: Feeds may be broadly classified as concentrate and roughages, depending on their composition. Concentrate are feeds that contain high density of nutrients, usually low in crude fiber content (less than 18% of dry matter) and high in total digestible nutrients. Roughages are feeds with low density of nutrients with crude fiber content over 18% of dry matter including most fresh and dried....
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.... directly edible by animals and it provides essential growth nutrition. However, when combined with fibre and other substances, the resultant Compound would be optimum to aid the animals in consumption and digestion. The finding that poultry meals are not directly used as feed to animals is erroneous and without consideration of basic aspects of animal feeding. (iv) Even otherwise, the observation of the AAR that poultry meal is not directly fed to the animals and therefore, is not covered within the language of the Heading of Chapter 23 is erroneous. The Heading of Chapter 23 nowhere states that the preparations/products of a kind must itself be directly fed to animals. On the contrary, it states that the products may be "used' in animal feeding. The expression is wider and would encompass concentrates such as poultry meal which may be used in whichever form for the purpose of animal feeding. (v) The AAR has selectively interpreted the fact that the poultry meal is used as raw material for manufacture of animal feed against the appellant without considering the fundamental nature of poultry meal. Although poultry meal is applied as an ingredient in further ma....
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....ed before the AAR. Similarly, the appellate authority of the AAR i.e., this forum is also not bound by the circular dated 31.12.2018. (viii) The AAR erred in placing reliance upon the decision of Hon'ble Supreme Court in the case of Dilip Kumar (2018) 361 ELT 577) as if a ratio was laid down that inputs for animal feed are different from animal feed. The reliance placed is misconceived and misleading. The decision in Dilip Kumar was rendered by a Constitution Bench of Hon'ble Supreme Court with the limited purpose of answering a specific reference as to whether the ambiguity arising out of an exemption notification issued by the Government as against a Legislative Provision should be settled in favour of an assessee or not. The Hon'ble Supreme Court merely dealt with this legal principle, but did not render or approve any finding or any principle relating to the classification of animal feed or inputs on merits. The extract referred to be the AAR is misunderstood since the facts arising from the case, which gave rise to the reference, were merely recorded by the Five Judge Bench and no finding or determination was rendered by the Five Judge Bench. (ix) The AAR....
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....eir product Poultry Meal ("impugned product" or "product"). The Hon'ble Tribunal rejected the party's claim that it was classifiable under Chapter Heading 2301 of the Central Excise Tariff and held that it is classifiable under chapter 2302 of CETA (Central Excise Tariff) and 2309 of CTA (Customs Tariff). Though the said decision has been cited and relied by them, the Advance Ruling Authority has not considered or addressed the same; nor stated why it is not applicable or how it is distinguishable. To his knowledge, the said decision of Hon'ble Tribunal has not been appealed by Revenue. The classification ordered by Advance Ruling Authority is exactly opposite to the Hon'ble Tribunal's judgment. 5.2. He also referred to Note 1 to Chapter 23 of the Customs Tariff which read as; "Heading 23.09 includes products of a kind used in animal feeding, no elsewhere specified or included, obtained by processing vegetable or animal materials to such on extent that they have lost the essential characteristics of the original material, other than vegetable waste, vegetables residues and by-products of such processing". The product manufactured by them is form the process s....
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....in the subject appeal. • Firstly, the correct classification of the product 'poultry meal' whether it falls under Tariff Item No. 2301 10 90 of the Customs Tariff Act 1975 as held by the lower authority in the impugned order or whether it falls under Tariff Item No. 2309 90 20 as 'Concentrates for compound animal feed as contended by the appellant. • secondly whether the said product is eligible for exemption in terms of entry SI.No. 102 Of Notification No.2/2017-Central Tax (Rate) dated 28.06.2017 (as amended), as claimed by the appellant or same is not eligible for the said exemption and hence chargeable to 5% GST as held by the lower authority in the impugned order. 8. For determining relevant entries in the First Schedule to the Customs Tariff Act, 1975 ("Customs Tariff" in short) merit a reference, since in terms of explanation (iii) and (iv) to Notification No. 1/2017-Central Tax (Rate) dated 28.6.2017, the classification of goods has to be done as per the Chapters, Headings, sub-headings and tariff item number of the Customs Tariff and also applying the rules for interpretation of the Schedule including the Section and chapter Notes a....
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....ce to that article complete of finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken include a reference to mixtures or combinations of that material or substance with other material or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to principles of rule 3. 3. When by application of rule 2(b) or for any other reason, goods are prima facie classifiable under two or more headings classification shall be effected as follows: (a) The heading which provides the most specific description 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 re....
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....heading includes products of a kind used in animal feeding obtained be processing vegetables or animal materials to such an extent that they have lost the essential characteristics of the original material, for example in case of products obtained form vegetables materials those which have been treated to such an extent that the characteristic cellular structure of the original vegetables material is no longer recognisable under a microscope 10.1. On examining the description, process and usage of the impugned goods "Poultry meal", vis-a-vis the above tariff entries, interpretative Rules and Explanatory Notes it appears that the goods in question meet the description of the goods "poultry Meal" falling under Tariff item 2301 covering "meals of meat or meat offal". The process of manufacture described by the appellant is similar, rather identical to the process described in the HSN explanatory notes under heading 2301. 10.2 With regard to the appellants claim for classifying the impugned goods as concentrates falling under Heading 2309 of the Custom Tariff, we find the same is legally untenable due to the following reasoning. 10.3 In order to fall under Heading 2309, the go....
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....form. In the given context of Heading 2309 the phrase 'concentrates for compound animal feed' therefore would apply to goods/products which contain a given substance(s) in concentrated form and which is used in a compound animal feed. The phrase 'compound animal feed' in common trade parlance, is a mixture of various concentrate feed ingredients in suitable and defined proportions; such ingredients commonly including grains brans, protein meals/cakes, minerals and vitamins etc. The appellant however has not adduced any material or evidence including technical literature etc. To show and establish that the poultry meal fulfills the above criteria so as to qualify as 'concentrates'. Hence we find the appellants claims to be unsubstantiated and therefore not acceptable. 10.6. It is further observed that in terms of the Chapter Note to Ch. 23 in the Customs Tariff, as referred supra, the products under heading 2309 includes those which are processed to such an extent that the essential characteristics of the original material is lost. The HSN Notes elaborate on this aspect showing that the extent of processing should be that the characteristics cellular struc....
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....ion of goods 23.01 2301.00 Residues and waste from food industries, including bagasse, other waste of sugar manufacture and oil cakes 23.02 2302.00 Preparations of a kind used in animal feeding, including dog and cat food Relevant extract of the Hon'ble Tribunal's analysis is also reproduced as under: 6. We find that Chapter 23 covers the various residues and wastes from food industries also includes prepared animal fodder, certain products of animal origin .......................... Chapter 23 of CETA is comprising of only two headings Heading No. 23.01 covers the residues and wastes arises during the process of manufacture of final product from food industry The clearance of residues und wastes above would he Nil rate of duty under Heading No. 23.01. The other Heading No. 23 02 covers preparation of a kind used in animal feeding There is no dispute that heading 23 02 of CETA corresponds to Heading No. 23 09 of CTA. ... 11.3 Thus, in the above case law, the Heading 2301 of Central Excise Tariff which was considered by the Hon'ble Tribunal covered "Residues and waste from food industries, including bagasse, other waste of sugar manufacture and oi....
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....tion, in Col. (2) & (3) respectively. The impugned goods viz., 'Poultry meal' have been held to be classifiable under Heading 2301 of the Customs Tariff. The said Heading figures in Column (2) of the entry No. 102. However, the goods 'poultry meal' does not figure in the list of goods specified by description in Column (3) above. Hence, the poultry meal' is not eligible for the above exemption. 15.3. The appellant has claimed the exemption on the basis of their contention that the poultry meals is classifiable as 'concentrates', which is appearing in the exemption entry. We have already examined the said claim and negated the same vide our findings and discussion, supra. The same holds good and applies in this context also. 15.4 The appellant has also put forth other contentions in this regard i.e. the lower authority has referred to the Hon'ble Supreme Court judgment in the case of Dilip Kumar & Company, which is not at all applicable nor relevant; the lower authority erred in relying upon a TRU-Circular which does not have statutory backing etc. We find that these contentions do not have any bearing vis-a-vis the issue of eligibility to an....