2024 (7) TMI 1061

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....fixation to upgrade the quality of soil, also used as pesticides for protection of crops from insects, worms, termites, etc. at facilities situated at Jainpur, Hardauli, Marka Road Shastri Nagar. The oil produced from various processes at various facilities which includes, drying neem seeds, thereafter dried seeds are further crushed to obtain neemgiri, then the neemgiri is further cold pressed to obtain neem oil, which is of high density, which cannot be used for soil irrigation. As per the specification of buyers the density of neem oil is modified by adding various chemicals such as mixed solvent, reducer oil, cashew nutshell liquid, etc. hence making it chemically modified and unfit for human consumption (nonedible). The chemically modified neem oil is transported through tankers for consumption. 3. The applicant has sought advance ruling in respect of the following questions: 1. Under which HSN code the non-edible to be classified? 2. Whether notification no. 09/2022-Central Tax (Rate) dated 13.07.2022 issued under the Provisions applicable on the applicant? 4. The question is about applicable GST rate under the provisions of CGST Act and liability to pay GST, hence is a....

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....dt. 26.04.2024. Assistant Commissioner, CGST & Central Excise, Dehat, Kanpur has held that Neem Oil (Non-edible) falls in HSN 1515 and Applicant's request to classify it in Ch. 31 of HSN code is not justifiable as chapter 31 classifies "Fertilizers" whereas the applicant is requesting ruling for Neem Oil. It was further stated that as per the declaration of the Unit available at the GST portal , the applicant is into manufacturing of- "Oil cake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of vegetable fats or oils , other than those of heading 2304 or 2305 of Cotton seeds : Oil cake and Oil cake meal, decorticated expeller variety" Therefore the Applicant's view that chemically modified neem oil to be classified in chapter 31 does not seem correct. 8. The applicant was granted personal hearings on 09.05.2024 which was attended by Mr. Santosh Kumar Sahu, Director during which he reiterated the submissions made in the application of advance ruling. DISCUSSION AND FINDING 9. 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 provi....

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....is transported through tankers for consumption. 13. Here reference may be made to Assistant Commissioner, CGST & Central Excise, Dehat, Kanpur letter dt. 26.04.2024 wherein the applicant has declared its product as "Oil cake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of vegetable fats or oils , other than those of heading 2304 or 2305 of Cotton seeds : Oil cake and Oil cake meal, decorticated expeller variety" which falls in HSN code 2306 10 10. Thus the product manufactured by the applicant in no way falls under Chapter heading 31. 14. Reference may also be made to Deputy Commissioner State Tax, Kanpur Dehat, Kanpur letter dt. 04.05.2024 wherein it is stated that the commodity of the Applicant i.e. Neem Oil falls under HSN code 15159020 which is as follows: "Fixed vegetable oils , namely the following neem seed oil, karanj oil, silk cotton seed oil. Khakhon oil, watermelon oil, rubber seed oil, dhup oil, undi oil, maroti oil, Pisa oil, naharoil". Hence, as per Notification No. 09/2022-Central Tax (Rate) dt. 13.07.2022, no refund of unutilized input tax credit shall be allowed, where the credit has accumulated on accou....

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..... As General Rules of interpretation of tariff Rule 1 - "The titles of Sections, Chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions' We find that neem seed oil is mentioned under Chapter Sub-heading 1515 90 20. Thus, the neem oil is classifiable under HSN code 1515 90 20. However,asper applicant their product in question i.e. "non-edible Neem Oil" are chemically modified and it should be classified as fertilizer under chapter 31 of HSN codes. As per applicant, naturally produced neem oil by them is having Azadirachtin content of 100-900 ppm, whereas they are supplying to their buyers having Azadirachtin content of around 150 ppm. PPM of Azadirachtinis modified/reduced to 150 PPM by adding mixed solvent, reducer oil, cashew nutshell liquid, etc. As per applicant this reduction in concentration is nothing but chemical modification and hence their product is chemically modified neem oil. 20. As per technical specification of product ....