AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (7) TMI 967
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....a, Rajsamand-313301 Rajasthan - (hereinafter the applicant) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (a) given as under: (a) Classification of goods and/or services or both: A. SUBMISSION OF THE APPLICANT (in brief) 1. That M/s. Gyankeer Products P. Ltd. (hereinafter referred to as the "applicant") are registered under GST having GSTIN 08AAHCG3822A1Z1. Applicant wishes to manufacture and supply the product "Keer Kokil" which is 'Tobacco pre-mixed with lime'. It is principally unmanufactured tobacco which has been pre-mixed with lime. 2. That the applicant wishes to manufacture "Keer Kokil" i.e. 'Tobacco premixed with lime' where the principal content is tobacco which is mixed with lime. Further, little aroma and menthol is used for freshness and to avoid bad smell. 3. as per submission made by the applicant on 16.05.2022, this product involves following process. Statement of Applicant's Interpretation of Law/ Facts 1. Applicant understands that Tobacco and unmanufactured tobacco substitutes are classified under Chapter 24 of the GST Tariff wherein inter alia Unmanufactured tobacco is classified under Heading 240....
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.... basis of MRP. The quality of tobacco leaf is totally different and costly in this product which is e\ idem from the high selling price of the product. Further, it is highly scented and totally dry. Since, it is a costly product it is consumed by rich and elite class of people 3. It is submitted that the basic points of difference between the above two categories of Tobacco products i.e. Unmanufactured Tobacco (with or without lime tube) including "Keer Kokil" and Chewing Tobacco which is basically known as 'Zarda Scented Tobacco' are as follows:- a) Contents and Composition: The quality of tobacco leaves used in the Unmanufactured Tobacco product is totally different with the tobacco leaves used in the Chewing Tobacco or Zarda Scented Tobacco. Further, Zarda Scented Tobacco is highly scented and totally dry. b) Price: Where unmanufactured tobacco is priced at around Rs. 5 per pouch containing approximately 6 grams of tobacco, which means a cost o! Rs. 835/- per Kg on MRP basis. On the contrary, chewing tobacco is priced at Rs. 10/- per pouch containing approximately less than halt gram of tobacco which means a cost of Rs. 20,000/- per kg on the basis of MRP. c) Usag....
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....r Heading 2403 with Chewing Tobacco. B. QUESTIONS ON WHICH THE ADVANCE RULING IS SOUGHT:- Classification and applicable rate of GST and/ or Compensation Cess on our product "Keer Kokil" i.e.'Tobacco pre-mixed with lime'.? C. PERSONAL HEARING In the mailer personal hearing was granted to the applicant on 29.03.2022 and again on 11-05-2022. CA. Keshav Maloo, and Adv. M.L. Patodi, authorized representatives of applicant appeared for personal hearing. During the personal hearing, they reiterated the submissions already made. On being asked during personal hearing they further submitted that the decision of AAAR of Tamilnadu state in the case of Kavi Cut Tobacco in Order-in-Appeal No. AAAR/03/2020(AR) is not a good law as it is contradictory to various judgments of tribunals including that of Mumbai Tribunal in the case of Yogesh Associates reported at 2006 (195) EL T 196 (Tri-Mumbai) which has been affirmed by Hon'ble Supreme Court which has been reported 2006 (199) ELT A221(S.C.). Shri Maloo also submitted the process of manufacture of Kavi Cut tobacco and their product is different from their product Keer Kokil. They submitted a note on the same during personal hearin....
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....MED OR STRIPPED ; SUN CURED COUNTRY (NATU) TOBACCO 28% 01/07/2017 24011030 UNMANUFACTURED TOBACCO; TOBACCO REFUSE -TOBACCO, NOT STEMMED OR STRIPPED : SUN CURED VIRGINIA TOBACCO 28% 01/07/2017 24011040 UNMANUFACTURED TOBACCO; TOBACCO REFUSE - TOBACCO, NOT STEMMED OR STRIPPED : BURLEY TOBACCO 28% 01/07/2017 24011050 UNMANUFACTURED TOBACCO; TOBACCO REFUSE -TOBACCO, NOT STEMMED OR STRIPPED TOBACCO FOR MANUFACTURE OF BIRIS, NOT STEMMED 28% 01/07/2017 24011060 UNMANUFACTURED TOBACCO; TOBACCO REFUSE - TOBACCO, NOT STEMMED OR STRIPPED : TOBACCO FOR MANUFACTURE OF CHEWING TOBACCO 28% 01/07/2017 24011070 UNMANUF ACTU RED TOBACCO; TOBACCO REFUSE -TOBACCO NOT STEMMED OR STRIPPED TOBACCO FOR MANUFACTURE OF CIGAR AND CHEROOT 28% 01/07/2017 24011 080 UNMANUFACTURED TOBACCO; TOBACCO REEL SE - TOBACCO NOT STEMMED OR STRIPPED TOBACCO FOR MANUFACTURE OF HOOKAH TOBACCO 28% 01/07/2017 24011090 UNMANUFACTURED TOBACCO: TOBACCO REFUSE - TOBACCO. NOT STEMMED OR STRIPPED : OTHER 28% 01/07/2017 240120 TOBACCO PARTLY OR WHOLLY STEMMED OR STRIPPED 28% ....
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.... the submissions made by the applicant as well as the department. On the basis of submission made on 16.05.2022, we are of the view that the applicant i.e. M/s. Gyankeer Products P. Ltd. (GSTIN 08AAHCG3822A1Z1) wishes to manufacture and supply the product 'Tobacco pre-mixed with lime having name "Keer Kokil" where the principal content is tobacco which is mixed with Lime. 2. The manufacturing process of the "Keer Kokil" i.e. 'Tobacco pre-mixed with lime' (as elaborated in their application and revised submission by the applicant) : 3. In the present case we have to decide the classification and applicable rate of GST and or Compensation Cess on the product "Keer Kokil i.e. tobacco pre-mixed with lime'. 4. Below we delve deep to decide the case, it would be proper in the fitment of justice to discuss the relevant provisions of the statute which are as under- 4.1 Linder GST. the applicable rates of CGST are notified by Notification No. 1/ 2017-C.T. (Rate), dated 28-6-2017 and in terms of explanation (iii) and (iv) to the said Notification. (iii) "Tariff item'', "sub-heading" "heading' and "Chapter shall mean respectively a tariff item, sub-he....
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....s not cover " Gudaku" 4.3 The Customs Tariff Classification in respect of Chapter 2401 are reproduced below for reference: 2401 UNMANUFACTURED TOBACCO; TOBACCO REFUSE 2401 10 - Tobacco, not stemmed or stripped : 2401 10 10 --- Flue cured virginia tobacco 2401 10 20 --- Sun cured country (natu) tobacco 2401 10 30 --- Sun cured virginia tobacco 2401 10 40 --- Burley tobacco 2401 10 50 --- Tobacco for manufacture of biris, not stemmed 2401 10 60 --- Tobacco for manufacture of chewing tobacco 2401 10 70 --- Tobacco for manufacture of cigar and cheroot 2401 10 80 --- Tobacco for manufacture of hookah tobacco 2401 10 90 --- Other 2401 20 - Tobacco, partly or wholly stemmed or stripped : 2401 20 10 --- Flue cured virginia tobacco 2401 20 20 --- Sun cured country (natu) tobacco 2401 20 30 --- Sun cured virginia tobacco 2401 20 40 --- Burley tobacco 2401 20 50 --- Tobacco for manufacture of biris 2401 20 60 --- Tobacco for manufacture of chewing tobacco 2401 20 70 --- Tobacco for manufacture of cigar and cheroot 2401 20 80 --- Tobacco for manufacture of hookah tobacco 2401 20 90 --- Other 2401 30 00 - Tobacco refuse CTH 2403 covers "Other manufa....
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....Tobacco refuse, bearing brand name 61% 26 2403 99 10 Chewing Tobacco (without Lime tube) 160% 27 2403 99 10 Chewing Tobacco (with Lime tube) 142% 5. We have gone through the facts of the case and submissions made by the applicant including at the lime of hearing and as per revised submission made on 16.05.2022. 6. The applicant has submitted that their product is basically tobacco. Such raw tobacco leaves are not consumed without mixing it with lime and in their product the lime is in pre mixed condition. 7. As per applicant, they purchase dried and cut tobacco in which lime pest is mixed and thereafter it is dried, impurities and dust are removed and then it is stored in jute bags. Further while packing moisture is added so that it does not remain dried. It is finally packed in pouches for use by consumers. 8. We find that the AAAR of Tamilnadu in the case of M/s Kavicut tobacco held that raw dried tobacco leaves procured from market. After that, the first step undertakes the process of grading, drying, liquoring i.e. the dried tobacco leaves are cured using jeggary water for the purpose preventing it from moulding or further decaying, stalking, semi-drying, mincing.....
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.... rendering unmanufactured tobacco to manufactured tobacco following the settled position that process of treatment Raw of leaf of Tobacco by effecting various processes, e.g. sieing etc. would keep the tobacco as unmanufactured and classification under heading 2401 cannot be disturbed. Apart from above, the Jurisdictional SGST Officer vide letter dated 18.01.2022 and 10.05.2022 also stated that the product of applicant i.e. 'Keer Kokil" will be supplied to consumer pre-mixed with lime and there will be no material change of tobacco leaves in the product. The tobacco leaves used in "Keer Kokil'' remains original after adding lime' The nature of the Product will not be changed. 10. However we find that Hon'ble Supreme Court in the case of Damodar J. Malpani reported at 2002(146) E.L.T.483 (SC) while dealing with the classification of chewing tobacco that : "2. It is not in dispute that the appellants product is chewing tobacco. Il is also not in dispute that chewing tobacco is not necessarily manufactured tobacco or classifiable under tariff heading 2404. The classification of chewing tobacco": "ultimately depend on the process adopted for consumption of the c....