AI Drafter 
TaxTMI 
TaxTMI 
2023 (9) TMI 162
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....T Act and APGST Act respectively) by M/s. Sri Venkateswara Cashew Chikky Manufacturers (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017. 3. Brief Facts of the case: 3.1 M/s Sri Venkatcswara Cashew Chikky Manufacturers (hereinafter referred to as applicant") is engaged in manufacturing and supply of an edible product under the name "Crackle", which is, as per applicant, identically known and recognised as 'N.B.S Crackle' and contains ingredients in following proportion. Applicant is having GST Registration number 37ABYPV0474E1Z1. S. No Particulars Proportion 1 Sugar 68% to 72% 2 Cashew Nuts 28% to 30% 3 Butter 1% to 2% 4 Glucose 1% to 2% Manufacturing Process of N.B.S. Crackle: step-by-step manufacturing process of, 'N.B.S. Crackle as per the applicant is tabulated here as under: S.No Particulars 1 To begin with, water should be taken in a vessel and to that vessel sugar be added 2 After that, the mixture of those ingredients should be boiled until the mixture is caramelized 3 Once the mixture is caramelized, Cashew Nuts, Butter and Liquid glucose s....
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....ere been specifically defined under the GSI law or for that matter under HSN and therefore, one has to go by the plain or dictionary meaning. 5.2 Dictionary meaning of the phrase 'confectionery' Oxford English Dictionary, Second Edition, Part III, where the word is defined as of the nature of confection, cornfit or sweetmeat or pertaining to confections or confectioner's work. As per this Dictionary, the word 'confection' means to prepare for use with sugar, syrup, or the like; to make into a confection; to mix, make up as a condiment or seasoned delicacy. We find that in the same Dictionary, the words confectionery preparation" are defined as a sweetmeat. The word 'sweetmeat' is defined in the Webster's Encyclopaedic Unbridged Dictionary as sweet delicacy, prepared with sugar, honey or the like, as preserves candy, or formerly cakes or pastry. In Fund All Wagnalls New Standard Dictionary confectionary is defined as- "Confectionary is defined as sweet meat. Collectively, that a confectionary makes or sells as candy or other articles made of sugar, sirup honey or the like" In "Word Origins and their Romantic Stones" by Wilfred Fun....
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....e other hand, is a kind of dry bread in which sugar is almost insignificant ingredient. In salted biscuits sugar is not at all used" 5.5 In the light of the aforesaid discussion, the applicant submits that confectionery comprises articles in which the main ingredients is sugar, although other articles may be added for enhancing its taste. It thus comprises essentially only these articles which are commonly called sweetmeats. Thus, it is clear that it is food chiefly made of sugar. Normally it is made by cooking process, other than baking. Impugned product manufactured by the Applicant contain substantial amount of sugar, and are not made out of the baking process. Therefore, the impugned product primarily falls under the ambit of 'confectionery' products. 5.6 Principles and Classification of Confectionery Products The applicant submits that, confectionery is an important food item of great popularity among wide range of population. It has been enjoyed as a major food delicacy from ancient times. The term confectionery is ambiguous and describes a spectrum of sweet goods and takes on different meaning depending on the country in which it is used, for example in the ....
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....Crackle machine. Therefore, the impugned product manufactured by the Applicant is "Sugar Boiled Confectionery" The Applicant in this regard also obtained technical test report from Food Testing Laboratory, School of Food Technology, Kakinada, Andhra Pradesh wherein the impugned product N.B.S. Crackle manufactured by the Applicant has satisfied all the parameters laid down under Indian Standard IS 1008:2004 in the said technical test report. Copy of technical test report is enclosed as Annexure-1. 5.9 Classification of NBS Crackle under GST Act: GST Notification 1 of 2017 enlists the rate of tax on goods falling within the ambit of GST. The said Notification has undergone various amendments since inception of GST. Presently, in the above notification, the goods falling under HSN Code 1704 are primarily covered under three schedules i.e. Schedule 1, Schedule II and Schedule III with 5%12% and 18% rates of tax respectively. Items of HSN Code 1704 falling under Schedule I of GST Notification 01/2017: As per GST Notification 41/2017 dated 15.11.2017 read with GST Notification 01/2017, the following items pertaining to HSN Code 1704 are falling under serial number 92 of Sc....
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.... in the absence of a specific entry. The Apex Court of India in the case of Indian Metals & Ferrous Alloys v. Collector of Central Excise 1991 taxmann.com 71 held that in classification of goods a specific entry will be preferred to a general entry. Similarly the Hon'ble Supreme Court in the case of State of Karnataka v. Durga Projects Inc. [2018] 91 taxmann.com 54 in its (3) member bench judgment held that only such goods which cannot be brought under specific entries in the tariff could be attempted to be brought in residual entry. 5.11 Hon'ble Supreme Court of India in the case of Dunlop India Ltd. & Madras Rubber Factory Ltd. v. Union of India [19761 2 SCC 241 held that "when an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause. Thus when a specific entry is available for enumerating the commodity NBS Crackle to relegate it to the orphanage of the residuary entry will be against the principle of classification as held by Hon'ble Apex Court in the above precedent....
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....oiled confectionery' and therefore the subject product needs to be classified as 'Sugar boiled confectionery' falling under Chapter Heading 1704 and covered by Schedule II, Sr. No. 32AA, attracting 12% GST of Notification No. 01/2017 dated 28.06.2017 as amended from time to time pertaining to rale of GST on goods. In view of the above, the primary issue before us to decide is the classification of the impugned product which is marketed in the name "NBS Crackle" .Thus we proceed to examine, discuss and decide the classification of the afore mentioned product. We invite reference, with regard to the classification of goods under GST, to the notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, chapter heading 1704 and relevant tariff entries therein which are modified vide Notification 41/2017 dated 15.11.2017 and Notification 06/2018 dated 25.01.2018 . We find that the Chapter 17 of the HSN is for 'Sugar & Sugar Confectionery'. While 1701 to 1703 headings relate to Sugars in different forms, the Heading 1704 mentions Sugar Confectionery. Sugar Confectionery has nowhere been specifically defined under GST law or under HSN. However ,going by the tra....