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2023 (6) TMI 486
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....cent) in raw unmanufactured tobacco dust by the Applicant after procuring the same from various traders, and its subsequent sale to customers on B to B and B to C basis, after ensuring packing from third party, would change the character of unmanufactured tobacco to manufactured tobacco? 2. Whether processing of unmanufactured tobacco dust by add mixing the scent (mixture of various perfumes and not jarda scent) would change the character of unmanufactured tobacco to manufactured tobacco? 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, M/s Pandey Traders, Siyapuram, Station Road, Mainpuri 205001 (U.P.) [GSTIN No. 09FOSPP6028CIZI] is engaged in mixing of scent in the raw/unmanufactured tobacco dust, procured from various traders. (ii) That said unmanufactured raw tobacco dust after mixing of scent (mixture of various perfumes and not jarda scent) is being sent for packing along with packing rolls of pouch to M/s Purwar Enterprises, who wi....
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....esh Enterprises v/s Commissioner of Central Excise, Pune reported in 2006 (203) ELT 432 (Tri. - Mumbai). iv) Iswar Grinding Mills v/s Commissioner of C.Ex., Calcutta-1 reported in 2000 (117) ELT 743 (Tri.). 6. The application for advance ruling was forwarded to the Jurisdictional GST Officer to offer their comments/views/verification report on the matter. But no reply was received. 7. The applicant was granted a personal hearing on 24.02.2023 which was attended by Mr. Amit Awasthi (Advocate), & Mr. Ashish Kumar Shukla (Advocate) Authorized Representatives during which they reiterated the submissions made in the application of advance ruling. DISCUSSION AND FINDING 8. At the outset, we would like to make it clear that the provisions of both the CGST Act and the UPGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the UPGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / UPGST Act would be mentioned as being ....
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.... 26 pouches of 1 gramps in a transparent packet, bearing no marking, whatsoever and howsoever, and return it to the Applicant. Even the Pouches being supplied for packing contains only statutory marking in terms of Prohibition of Advertisement & Regulation of Trade and Commerce, production, Supply and Distribution Act, 2003 along with marking of Rate and weight in terms of Legal Metrology Act. The said pouches also do not bear any brand and /or trade name. That the said product is then supplied on B to B and B to C basis from the premises of the Applicant, classifying it under GST Tariff Sub Heading 24012090, as unmanufactured tobacco, under cover of proper tax invoice and on payment of duty in accordance with law. 12.1 Under GST, the applicable rates of CGST are notified by Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 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-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....
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....ly or wholly stemmed or stripped'. As per party submission the raw unmanufactured tobacco dust which is result of screening of raw tobacco through which tobacco leafs, it stem, and other tender parts are separated through the process drying, winnowing, crushing and separating though sieving, and the better part are used for chewing tobacco and remaining part in raw form i.e. stems, hard veins and leaves of tobacco plant are then crushed in the dust form, and the dust is also sold as such for human consumption. After that mixing of scent (mixture of various perfumes and not jarda scent) by the party in raw unmanufactured tobacco dust does not make any irreversible change and remains raw unmanufactured tobacco dust only. It is blend of raw unmanufactured tobacco dust, only add mixture scent (mixture of various perfumes and not jarda scent) only, for human consumption. Since application of scent (mixture of various perfumes and not jarda scent) on raw unmanufactured tobacco dust do not result in proven irreversible change, the raw unmanufactured tobacco dust remains raw unmanufactured tobacco dust only, as such the same cannot be equated with manufactured tobacco. The applic....
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....ant does not fall under CTH 24012090.' 12.3 CTH 2403 covers "Other manufactured tobacco and Manufactured Tobacco substitutes; "Homogenised" or "Reconstituted" Tobacco; Tobacco Extracts and Essences". CTH 24039910- covers 'Chewing Tobacco'. Explanatory Notes to HSN 2403 is as below. 24 03 - Other manufactured tobacco arid manufactured tobacco substitutes, homogenised or "reconstituted" tobacco: tobacco extracts and essences. - Smoking tobacco, whether or not containing tobacco substitutes in any proportion . 2403.11 - - Water pipe tobacco specified in Subheading Note 1 to this Chapter 2403.19--Other Other 2403.91 - - "Homogenised" or "reconstituted" tobacco 2403.99 - - Other This heading covers (1) Smoking tobacco, whether or not containing tobacco substitutes in ant proportion, for example, manufactured tobacco for use in pipes or for making cigarettes 2) Chewing tobacco, usually highly fermented and liquored As per the Explanatory' notes 'Chewing tobacco' falls under CTH 2403. It is seen from the information available on ICAR- CTRI Central Tobacco ....
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....Madras in the case of Bell Mark tobacco company & Ors Vs Government of Tamilnadu, while answering the issues raised before them, observed (what is to be considered as 'unmanufactured chewing tobacco' and 'Manufactured chewing tobacco' when the same is not defined in the Act". The relevant portion are extracted as under: 15.1 The relevant factors to be considered at this stage are as follow:- The assessee purchases the tobacco and stores it in his licensed warehouse till it is required for being made into packets for sale. At the stage when the assessee issues the tobacco from the warehouse for being subjected to the further process before it was packed, he pays the prescribed excise duty. The learned council for the petitioner contended that even al the stage of purchase what the assessee purchased was known to the trade as chewing tobacco. It was found the maximum period during which tobacco is stored in the warehouse of the assessee is about 40 days. The learned council for the petitioners, however contended that very often the tobacco is taken out from the warehouse much earlier. During the time the tobacco is bonded in the warehouse it has to be looked aft....
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....subjected the tobacco he had purchased to the same process. Had he stopped with that alone, it might be possible to contend that what he sold subsequently was not a manufactured product. Taking, however, the cumulative effect of the various processes to which the assessee subjected the tobacco before he sold it, it is clear that what was eventually sold by the assessee was a manufactured product, manufactured from the tobacco that the assessee had purchased. Soaking in Jaggery water is not the only process to be considered. The addition of flavouring essences and shredding of the tobacco should establish that what the assessee sold was a product substantially different from what he had purchased. Once again, we have to point out that the fact that this assessee purchased the tobacco as chewing tobacco did not determine the question, whether the sale of the products manufactured by him from out of that tobacco falls within the scope of Section 5 (vii) or not. 15.3. As what constitutes a manufacturing process has not been defined by the Sales Tax Act itself, that expression has to be construed as it is normally understood in the English language. Even then there can be no inflexib....
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..... 18. We see that Customs Tariff/HSN do not define 'Unmanufactured/ manufactured tobacco' in the Section /Chapter notes specifically. 'Manufacture' under the GST law is defined under Section 2(72) as (72) manufacture" means processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term manufacturer shall be construed accordingly; Thus, any process on the raw material resulting in emergence of a new product with a distinct name, character and use is defined as manufacture' under GST. In the applicant case the raw unmanufactured tobacco dust which is result of screening of raw tobacco through which tobacco leafs, it stem, and other tender parts are separated through the process drying, winnowing, crushing and separating though sieving, and the better part are used for chewing tobacco and remaining part in raw form i.e. stems, hard veins and leaves of tobacco plant are then crushed in the dust form, and the dust is also sold as such for human consumption. When these tobacco dust under goes process of mixing with scent(mixture of various perfumes and not jarda scent) re....