TaxTMI 
TaxTMI 
2025 (1) TMI 394
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....Ruling No. GUJ/GAAR/R/58/2021 dated 29.10.2021. 3. Briefly, the facts are enumerated below for ease of reference: * the appellant is engaged in the supply of 'Aorom Herbal Smokes' which according to them is classifiable under 30049011; * the ingredients used in manufacturing the goods are tendu leaves, nutmeg, fennel powder, liquid glucose, propylene glycol, sorbital, menthol, baking soda, flavoring additive [clove, paan, mint, chocolate, vanilla, etc], empty paper tubes & filter; * consequent to manufacturing, the processed material is injected in the empty paper tube with filter; * that the final packing is of 10 herbal smokes/20 herbal smokes; * that herbal smoking is an ancient practice to cure many diseases from root mentioned in Ayurveda known as dhumapana, a common practice in ayurvedic treatment/therapy such as panch-karma. 4. In view of the foregoing facts, the appellant had sought Advance Ruling on the below mentioned questions viz 1. Determination of the liability to pay Tax on Sales of Aorom Herbal Smokes - (regular flavour) as per Tax Invoice No.: AH/GST/80 dt. 07/06/2021 made to: M/s. Sonde Exim Pvt. Ltd., Lohegon Maharashtra, regarding. - IGST. 2. D....
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....ttes; * that the product herbal smokes are not intended to assist the smokers to stop smoking; * that wef 1.1.2022, chapter note of chapter 30 as amended states that products, such as tablets, chewing gum or patches [transdermal systems], containing nicotine & intended to assist tobacco use cessation [heading 2404]; * that the products containing nicotine can only be considered as intended to assist tobacco use cessation & is covered under chapter heading 2404; * that product involves inhaling herbal smoke; it helps cure cough, cold, bronchitis, asthma; it also helps increase kapha and vata for treating or preventing the diseases; * that dhumapana literally means smoking medicinal drugs; that dhumapana in ayurveda is recognized as approved method by Ministry of Ayush as well as National Institute of Ayurveda; * that the product 'herbal smoke' is manufactured in accordance with authoritative ayurvedic books; * that the appeal is not hit by limitation; in case where limitation expired during the period 15.3.2020 till 14.3.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.3.2022; that th....
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....e Apex Court in the Suo Moto Writ Petition (C) No. 3/2020, wherein the Hon'ble Court held as under: 5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions: I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply. In view of the foregoing, we find that the appeal ha....
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....basis of plaster for use in dentistry (heading 3407); (h)] blood albumin not prepared for therapeutic or prophylactic uses (heading 3502); or (ij) diagnostic reagents of heading 3822.] [III] Chapter 24 Tobacco and manufactured tobacco substitutes Note: 1. The Chapter does not cover medicinal cigarettes (Chapter 30). GENERAL Tobacco is obtained from various cultivated varieties of the genus Nicotiana of the Solanaceae family. The size and shape of the leaves differ from one variety to another. The harvesting method and curing process depend on the variety (type) of tobacco. The plant may be cut whole, at average maturity (stalk cutting), or the leaves may be picked separately, according to their state of maturity (priming). Thus, tobacco may be cured either as whole plants (on the stalk) or as separate leaves. The various methods of curing are sun curing (in the open air), air curing (in closed sheds with free circulation of air), flue curing (in hot air flues), or fire curing (with open fires). Before packing for shipment, the dried leaves are treated in order to ensure their preservation. This may be done by controlled natural fermentation (Java, Sumat....
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....ne where they are given even heat till they attain 0% moisture. * Flavoring: The roasted leaves are then put into the mixture where for each kilogram; 50 grams of PG, 200 grams of liquid (1000g water: 550g Liquid Glucose), 1g menthol, 3g Sorbitol and 5g of flavoring additive is added and mixed for about halt In hour. After this process the material is ready to inject / ready for herbal samples making. * Injection: The processed material is then injected in the empty paper tube with filter. This is how herbal smoke is made. Then, these herbal smokes are packed into the final packing of 10 herbal smokes / 20 herbal smokes a pack, ready to be sold. The herbal smoke is totally different from regular cigarettes which is available in the market. The major difference between herbal smoke and regular cigarettes is that the regular cigarettes contain tobacco or nicotine and are regulated by THE CIARETTES AND OTHER TOBACCO PRODUCTS (PROHIBITION OF ADVERTISEMENT AND REGULATION OF TRADE AND COMMERCE, PRODUCTION, SUPPLY AND DISTRIBUTION) ACT, 2003. Regular Cigarettes are harmful to health, while Herbal Smokes manufactured by the appellant are used as medicines for ailing various respi....
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....pana. We find that in para 10.2 of the impugned ruling, GAAR reproduced section 3 (a) of the Drugs and Cosmetics Act, 1940, which states that Ayurvedic, Siddha or Unnai Drug, includes all medicines intended for internal or external use for or in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, and manufactured exclusively in accordance with the formulae described in the authoritative books of Ayurved, Siddha and Unani Tibb systems of medicine, specified in the First Schedule. GAAR, further goes on record that the appellant was not in a position to substantiate/pin point the authoritative books of Ayurved, according to which the subject goods have been manufactured. On being specifically asked during the course of personal hearing, the appellant failed to inform the name of the authoritative book of Ayurved. Further, during the course of personal hearing it was also informed that they do not hold any license permitting them to manufacture the said goods. This being the fact, leads us to a conclusion the appellant has failed in making out a case of their product falling under the category of 'medicinal cigarettes'. This view is fur....
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.... the appellant has not succeeded in establishing that their product is medicinal cigarettes. This being the case, the question of relying on the note of chapter 24, is not tenable. 21. The appellant's next averment is that wef 1.1.2022, chapter note 1(b) of chapter 30, as amended, states that the chapter does not cover products. such as tablets chewing gum or patches [transdermal systems], containing nicotine & intended to assist tobacco use cessation [heading 2404]. The averment put forth is that since their product does not contain nicotine, it should fall wit in the ambit of chapter 30 and not chapter 24. While the amended chapter note states that it does not contain products viz tablets, chewing gum or patches, containing nicotine, intended to assist tobacco use cessation, the fact is that the product of the appellant, is neither of the above. This does not mean that for a tobacco substitute to fall within the ambit of chapter 24 it should necessarily contain, nicotine. That, we believe, is not a correct reading of the chapter note in question. Relying on the HSN notes of 24.02, we have held that the product in question would fall within its ambit. Nothing, has been produced, ....