TaxTMI 
TaxTMI 
2025 (8) TMI 513
X X X X Extracts X X X X
X X X X Extracts X X X X
....would submit that the petitioner is engaged in the manufacture of scented areca nuts, also known as, betel nuts under the brand name "Nizam Pakku", owned by M/s.S.A.Safiullah & Co. 3.2 Further, he would submit that the farmers supply dried betel nuts to the petitioner after splitting the same. Such split betel nuts are broken into smaller pieces which are then mildly heated with vegetable oils. Thereafter, sugar/glucose syrup, menthol and spices are added along with food grade perfumes. This is further packed in pouches using pouch making machines and are subsequently, dispatched to the market. Hence, he would contend that the petitioner's product "Nizam Pakku" is only a betel nut added with vegetable oils, sugar/glucose syrup, menthol and spices along with some food grade perfumes and additional of said ingredients will not change the character of the petitioner's product from the betel nut into any other form and thus, the impugned product will fall only under the Chapter 0802 of the CTA. 3.3 He would also submit that the aforesaid issue has already been settled by the Hon'ble Supreme Court vide the judgement rendered in Crane Betel Nut Powder Works vs. Commissi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....espite the above amendments to Chapter 21 and Chapter 08. The said final order was accepted and all subsequent proceedings were dropped by the Department, thus putting rest to all the disputes with respect to the impugned goods under the Central Excise regime. 3.6 After the introduction of Goods and Services Tax Act (GST), i.e., with effect from 01.07.2017, the CTA was made applicable to GST, which is akin to Central Excise Tariff Act. However, there is no difference between the Tariff entries under the CETH 0802 and 2106 under CETA and CTA, i.e., the Tariff entry claimed by the petitioner under CETH 0802 8090 and disputed by the Department under CETH 2106 9030 remains identical both under Central Excise regime and GST regime. 3.7 Under these circumstances, on 24.10.2019, M/s.S.A.Safiullah & Co, who owns the brand "Nizam Pakku", has applied for an Advance Ruling with respect to the classification of the impugned goods, namely, "Nizam Pakku", and its applicable GST rate. After detailed consideration, the Authority for Advance Ruling (AAR) gave a ruling that the classification of impugned product falls under CTH 08028090 attracting 6% of CGST and 6% of SGST vide Ruling dated 21....
X X X X Extracts X X X X
X X X X Extracts X X X X
....now, due to change in Law, i.e., after the introduction of GST, the petitioner's product has to be looked into from the aspect of "Supply and Services of Goods" in terms of Charging Section 7 of Circular No.163/19/2021-GST dated 06.10.2021. Therefore, the impugned show cause notice was issued by taking into consideration of the aspect that the concept of "manufacturing" replaced with the new concept of "Supply and Services", which has been incorporated for the purpose of levying GST. 4.2 Further, he would submit that the present petition has been filed challenging the classification of goods, which cannot be interfered by way of writ petition and hence, he would suggest that the petitioner shall avail the alternate remedy available to them. 4.3 He would also submit that the respondent had initiated an investigation and based on the said investigation, the petitioner's products were sent for chemical examination, wherein, vide the Chemical Examiner's report, it has been stated that the first sample is in the form of brown coloured cut pieces of nuts (Raw Betel Nuts) and the second sample having Nizam Beetle Nut, is in the form of heterogeneous mixture of brown colo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the Hon'ble Apex Court, wherein, it was held that the petitioner's product is classifiable under Chapter 0802 of CTA, and not under 2106 as contended by the respondent. 7. Thereafter, the respondent had followed the law laid down by the Hon'ble Apex Court and CESTAT and applied the same for the petitioner's product, which falls under the category of Chapter 0802. 8. Now, there is a sudden shift and change in the approach of the respondent on the ground that subsequent to the introduction of GST regime, in terms of Charging Section 7 of GST and Circular No.163/19/2021-GST dated 06.10.2021, the petitioner product is liable to be classified under Chapter 2106 9030, which attracts GST rate of 18%. 9. During the pre-GST regime, the concept of "manufacture" was available. Even at that time, the petitioner's product was added with the ingredients, such as vegetable oils, menthol, sugar/glucose syrup, spices and food grade perfumes. In spite of such additional ingredients, there was no change in the character of the petitioner's product and it was only considered as "betel nut". In such case, now, i.e., after the introduction of GST regime also, the petit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....travention to Section 98(2) of CGST Act, is totally baseless. If there is any such contravention, the Department ought to have proceeded under Section 104 of CGST Act to declare the Advance Ruling as void, which is not the present case. No appeal was preferred against the Advance Ruling provided by the Appellate Authority for Advance Ruling and thus, the Department is bound to follow the same. 12. Further, the respondent had also placed reliance on the recommendation of 45th GST Council meeting held on 17.09.2021, communicated vide CBIC Circular No.163/19/2021-GST dated 06.10.2021, wherein it has been held as "Scented sweet supari falls under tariff item 2106 9030 as "Betel nut product" known as "Supari" and attracts GST rate of 18% vide entry at S.No.23 of Schedule III of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017". However, in the show cause notice, the Department had comfortably ignored the crucial part of the said circular that only "Betel Nut product known as Supari", whereas, in this case, the impugned goods are sweetened/scented betel nuts and not "betel nut product known as Supari". 13. Further, the respondent had also placed reliance on Chapter Note 6....