TaxTMI 
TaxTMI 
2025 (1) TMI 394
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.... by M/s. Aorom Herbotech, (hereinafter referred to as Appellant) against the Advance 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 - ....
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....¢ attributes of herbal smoke do not match with listed goods that are globally considered as substitutes of tobacco cigarettes. • chapter note of chapter 24 clearly states that it does not cover medicinal cigarettes; • that cigarettes having medicinal property shall be classified as medicinal cigarettes; • 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 o....
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.... to the applicant. The applicant in Form GST ARA -02, in Sr. No. 2 has informed that the date of communication of the impugned ruling is 29.10.2021. Therefore, the appeal should have been filed by 28.11.2021. The proviso to section 100, ibid, gives the Appellate Authority power to grant condonation for further period of 30 days in case of sufficient cause. 11. The appellant has however relied upon the order dated 10.1.2022 of the Hon'ble 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 procee....
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....ion IV); (b) products, such as tablets, chewing gum or patches (transdermal systems), containing nicotine and intended to assist tobacco use cessation (heading 2404); (c) plasters specially calcined or finely ground for use in dentistry (heading 2520); (d) aqueous distillates or aqueous solutions of essential oil, suitable for medicinal uses (heading 3301); (e) preparations of headings 3303 to 3307, even if they have therapeutic or prophylactic properties; (f) soap or other products of heading 3401 containing added medicaments; (g) preparations with a 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 ha....
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....facility, and they are kept in the water for overnight before processing further. • Leaves Cutting: Leaves that are kept in water overnight are drained off water and then cut in the fine size of: 0.8 mm to 1.0 mm. • Leaves Drying: These cut-rags are then dried in a natural setting. The drying takes about 2-3 hours • Base flavoring: For each kilogram of dried tendu leaves, a mixture of 4 liters of water, 200 grams of nutmeg powder, 200 grams of fennel powder and 8 grams of baking soda is heated on a medium flame on a stove for half an hour. After filtering this mixture, the leaves are dampened in it for about half an hour. • Roasting: After half an hour, these leaves are squeezed off the mixture and then put into the roasting machine 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....
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....ecially processed leaves of a variety of lettuce, containing neither tobacco nor nicotine. The heading does not cover medicinal cigarettes (Chapter 30). However, cigarettes containing certain types of products specifically formulated to discourage the habit of smoking but which do not possess medicinal properties remain classified in this heading. What is evident from the above is that the heading excludes medicinal cigarettes (chapter 30). It is further stated that cigarettes containing certain type of products specifically formulated to discourage the habit of smoking but which do not possess medicinal properties remain classified in his heading. 17. The first question that arises based on the above, is whether the product is a medicinal cigarettes? The appellant's claim is that herbal smoking is an ancient practice to cure many diseases from root mentioned in Ayurveda and that this practice specifically under a procedure of Dhoompana. 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....
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.... substitute of cigarette and is also manufactured and marketed with the said aim in mind. Therefore, the averment of the appellant in para 13 to the effect that "It is submitted that such understanding is factually incorrect as the herbal smokes manufactured by the appellant are not intended to assist the smokers to stop smoking", belics fact. 19. In view of the foregoing, we concur with the finding of GAAR that the product is classifiable under HSN 24029010 more so since it is not a medicinal cigarette and secondly since the appellant himself, in his brochure claims that the product in question, is a substitute to cigarette and is also intended to addicts who really want to quit the smoking habit. 20. The next averment of the appellant is that the chapter note of chapter 24, reproduced supra, states that it does not cover medicinal cigarettes; that cigarettes having medicinal property shall be classified as medicinal cigarettes. We have already held in paragraph 17, that 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....