TaxTMI 
TaxTMI 
2022 (7) TMI 967
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Private Limited, NH 9 Upli Oden, Nathdwara, 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 inte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d priced at Rs. 10/- per pouch which means a cost of Rs. 20,000/- per kg on the 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 tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....'Tobacco pre-mixed with lime' is classifiable under Heading 2401 along with Unmanufactured Tobacco and not under 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 240110 TOBACCO, NOT STEMMED OR STRIPPED 28% 71% 01/07/2017 24011010 UNMANUFACTURED TOBACCO; TOBACCO REFUSE -TOBACCO, NOT OR STRIPPED : FLUE CURED VIRGINIA TOBACCO STEMMED 28% 71% 01/07/2017 24011020 UNMANUFACTURED TOBACCO; TOBACCO REFUSE - TOBACCO NOT STEMMED 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% ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ategory of unmanufactured tobacco without lime tube HSN Code 2401 (As interpretation and explained process of product of the applicant). • "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 a little aroma and menthol to avoid bad smell. The nature of the product will not be changed. E. FINDINGS, ANALYSIS & CONCLUSION: 1. We have perused the records on file and gone through the facts of the case and 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 cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cco free products intended for smoking in a water pipe are excluded from this sub-heading. SUPPLEMENTRY NOTES : For the purposes of this Chapter: (1) "tobacco" means any form of tobacco, whether cured or uncured and whether manufactured or not, and includes the leaf, stalks and stems of the tobacco plant, but does not include any part of a tobacco plant while still attached to the earth. (2) "cut-tobacco" means the prepared or processed cut-to-size tobacco which is generally blended or moisturised to a desired extent for use in the manufacture of machine - rolled cigarettes. (3) "smoking mixtures for pipes and cigarettes" of sub-heading 2403 10 does 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 -....
X X X X Extracts X X X X
X X X X Extracts X X X X
....obacco refuse (other than tobacco leaves) @ 28% (14% CGST+ 14% SGST) Schedule IV SI. No. 14 2402 Cigars, Cheroots, Cigarillos, Cigarettes; of tobacco or tobacco substitutes. @ 28% (14% CGST+ 14% SGST) Schedule IV SI. No. 15 2403 Other manufactured tobacco and manufactured tobacco substitutes; "homogenised" or "reconstituted" tobacco; tobacco extracts and essences [including biris] @ 28% (14% CGST+ 14% SGST) 4.5 The relevant rates of GST Compensation Cess in respect of Tobacco covered under the heads are as under [Notification No. 1/2017- Compensation (R) dated 28.06.2017]: SI.No. Chapter / Heading / Sub-heading / Tariff item Description of Goods Rate of Goods & Service Tax Compensation Cess (1) (2) (3) (4) 5 2401 Unmanufactured Tobacco (without Lime tube)-bearing a brand name 71% 6 2401 Unmanufactured Tobacco (with Lime tube)-bearing a brand name 65% 7 2401 30 00 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....39; is in the form of whole plants or leaves in the natural state or as cured or fermented leaves, whole or steamed/stripped, trimmed or untrimmed, broken or cut (including pieces cut to shape, but not tobacco ready for smoking). Tobacco leaves, blended, stemmed/stripped and "cased" ("sauced" or liquored") with a liquid of appropriate composition mainly in order to prevent mould and drying and also to preserve the flavour are also covered in this heading. Further, the Central Board of Excise & Customs vide its Circular No. 37/90-CX. 3, dt. 17-7-90, in case of flavours/scents added in preparation of scented snuff held the view that Snuff Tobacco even after addition of "Perfumes, Scents and Menthol" remain Tobacco. Therefore, the explanatory notes of HSN bringing in the leaf treated with Tobacco Solution Quimam herein and thereafter with flavouring perfumes agents cannot transform Raw leaf tobacco unmanufactured to manufactured tobacco. The addition of their volatile flavours will not amount to 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. wou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... at 2006 (203) E. L. T. 432 (Tri.- Mumbai) held that raw tobacco treated with quimam and perfumes is classifiable under sub-heading 2401 and not in sub heading 2404. 11. In view of above, we find that mixing of lime in tobacco leaves does not alter the nature of the product. The addition of their volatile flavours will not amount to rendering unmanufactured tobacco to manufactured tobacco in view of judgment of Hon'ble Apex Court in case of M/s Yogesh Associates. The quality of tobacco leaves used in the product i.e. "Keer Kokil' is different with the tobacco leaves used in the Chewing Tobacco or Zarda Scented Tobacco. Thus, the product is basically Unmanufactured Tobacco (without Lime tube) bearing a brand name. The HSN notes for heading 2401 specifically covers leaves in natural slate, cured tobacco and tobacco for manufacturing chewing Tobacco etc. Hence. 'Tobacco pre-mixed with lime' containing ingredients like lime is nothing but 'unmanufactured tobacco' and will be classified under heading 2401. 12. Once it is held that the product is 'unmanufactured tobacco', the classification of the product is under CTH 2401 which specifics under the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....¤¾ जायेगा । 5. तदउपरानà¥à¤¤ नमी व ताजगी बनी रहे इसके लिठइसे मोशà¥à¤šà¤°à¤¾à¤‡à¤œ किया जायेगा । | 6. फिर पाउच पैकिंग मशीन दà¥à¤µà¤¾à¤°à¤¾ विà¤à¤¿à¤¨à¥à¤¨ गà¥à¤°à¤¾à¤®à¥‡à¤œ में पाउच पैक किये जायेंगे । 7. जिनका रू. 5 या रू.10 आदि सà¥à¤µà¤°à¥‚प में बाजार की मांग के अनà¥à¤¸à¤¾à¤° 15, 20, 30 पाउच के पैकेट बà¤....