Dismissed

M/s Vadilal Industries Ltd.

GST AAAR15 Sept 2022GUJ/GAAAR/APPEAL/2022/20

Case brief

AI extract

What is this about?

The Appellate Authority reviewed an appeal against the Gujarat Authority for Advance Ruling's decision that frozen Parathas are not 'Bread' under HSN 1905. The court upheld the ruling, determining that Parathas require cooking before consumption and thus fall under HSN 2106.

What did the court decide?

The appeal was rejected; the Advance Ruling No. GUJ/GAAR/R/20/2021 dated 30.06.2021 was upheld.

M/s Vadilal Industries Ltd. — GST and Indirect Tax | GST AAAR (2022)

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GUJARA.T APPELLATf, AUTHORITY FOR ADVANCE RULING Ia1rotl GOODS AND SERVICES TAX fAx D/5, RA.ryA KAR BHAVAN, ASHRAM ROAD, MAFI(E]

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AHMEDABAD^_ 380 OO9.

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ADVANCE RU LING(APPEA L) NO. GUJ/GAAAR/APPE AL/2022 I 23 (IN APPLICATION NO. Advance Ruling/SGST&CGST/202 I /AR/l I )

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Date : ,5.09.2022

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Nameandaddressofthe	M/sVadilalIndustriesLtd.
appellant	VadilalHouse.53.ShrimaliSociety, NearNavrangpuraPoliceStation, Navrangpura. Ahrnedabad380 009
CiSllNoftheappellant	24AAACV4887FIZ6
AdvanceRuling No.and Date	GUJ/GAAR/R/20/2021dated 30.06.2021
Datcofappeal	04.08.2021
[)atcol' PersonalHearins	28.0'7.2022
Presentfortheappellant	ShriAmalDave. Advocate

¶7

At the outset we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act. 2() I 7 (hereinafter referred to as the 'CGST Act, 2017' and the'GGST Act, 2017') are in pttri moteria and have the same provisions in like matter and differ fiom each other only on a t-cu' specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions. a reference to the CCST Act,2017 would also rnean reference to the corresponding similar provisions in the GC ST Acr, 2017 .

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The present appeal has been filed under Section 100 of the CGST Act. 2017 and the GGST Acl,201'7 by M/s Vadilal lndustries Ltd (hereinafter referred to as Appellant) against the Advance Ruling No. CUJ/GAAR/R/2012021 dated 30.06.2021.

¶9

The appellant had raised the following questions seeking advance ruling in the application for Advance Ruling filed by it.

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"i). Whether the product viz. 'Paratha' i.e. various varieties of Paratha produced by the applicant merit classification under HSN Code 19059090? ii). llthether the product, namely,^'Paratha' i.e. all varieties o.f Paratha produced b1t the applicant are cltargeable lo 5% GST^(i.e. 2.5'% SGST and 2.5% CGST) under Sl.No. 99A of ScheduleJ of Notificotion No. 0l/2017-CT (Rate) and Notification No. 0l/2017-lT (Rate) dated 28-6-17?"

¶11

The appellant has subrnitted that they are producing eight varieties of Paratha which are Malabar Paratha, Mixed Vegetable Paratha, Onion Paratha, Methi Paratha. Alu Paratha. Laccha Paratha. Mooli Paratha and Plain Paratha; that the principal ingredient of all varieties of Paratha is wheat flour; the Parathas supplied and sold by them in packed condition are to be placed directly on pre-heated flat pan or griddle fbr being h medium flame for about 3-4 minutes and during this period, Paratha is to be

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every 30 seconds;^{the method of cooking is commonfor all the varietiesof Paratha" and} also that the^{principalingredientsfor all varieties is whole wheat flourandother} ingredients like aloo,^{vegetables,mooli,onion,methi etc., are addedonly tbr the purpose} of taste and flavor, but^{otherwise the essential character of all the varieties of Parathais} common and uniform;^{thereforethe product is to be treated as Parathafor the purposeof} application for^{advance ruling; that the word'Paratha'is not definedunder GSfl that} chapter heading 1905^{coversvariouseatables includingbread and HSNexplanatorynotes} includes unleavened^{breadhaving common ingredients viz. cereal flours,leavens and salt} and rnay contain^{other ingredients. Theappellantfurthersubmittedthat roti, chapatti} rvhich is unleavened bread^{of Indian origin likeparatha is covered underSl'No. 99A of} Schedule-l of Notification^{No. 0l/2017-CT,as amended by Notification No' 3412017-} Rarel the appellant^{referredto Rule 3(b) of the Rulesfor Interpretationof Tariff for} rnixtures and composite^{goods whichis called 'predominancetest of classification'and in} product namely Paratha,^{wheat llour is predominant material and thereforeappellant} submitted that Paratha,^{having closeresemblanceof roti and chapafiiwould merit} classification under^{HSN Code19059090 chargeableto GST} @5%^Adv'

¶16

The Gujarat Authority^{for AdvanceRuling (hereinafter referred to as 'the} GAAR'), vide Advance^{Ruling No. GUJ/GAAR/PJ2012021 dated 30.06.2021.inter-alia} observed that appellant's^{product i.e. Parathas are not ready for consumption product but} requires 3-4 minutes^{of cookingas well as theyare not akin to roti or chapattis whichare} prirnarily wheat flour^{productand HSN1905coversalready prepared or cooked products} rvhereas appellant's^{parathas requires 3-4 minutes cookinglHeading 2106 covers food} preparations not elsewhere^{specifiedor included' used directly or after processing such as} cooking. The GAAR^{alsoobserved that Rule 3(b) of Rules of Interpretationis not} applicable as the Paratha^{does not have any specificessential character and as per Rule} 3(c), which states^{when rule3(a) and 3(b) are not applicablegoodsshall be classified} under the heading^{which occurs last in numerical order, therefore. appellant'sparatha} falls under HSN 21069099.

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For applicability of^{Entry at Sl No.99A of NotificationNo.0l/2017-CT (Rate),} the GAAR observed that 'Khakhra,^{plain chapatti or roti', which are readyfor} consumption^goods, are^{mentioned at the said entryand there is no mention of Paratha} which requires further^{processing before consumptionandthereforethe said entry is not} applicable to the^{productParatha.The GAAR observedthat Parathawill be covered} under Entry No. 453 of^{Schedule-lll of NotificationNo. 0ll20l7-cT (Rate) dated} 28.06.2017 for the^{periodfrom 01.07.2017to 14.11.2017 and underEntryNo.23 of} Schedule-Ill of Notification^{No. 0l/2017-CT (Rate) dated28.06.2017 (as amended by} Norification No.4112017-cT^{(P-ate)dated 14.11.2017) with effect from15.11.2017 and} rvilt be liable to GST @18%^{(9% SGST+9%CSGT).}

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6.1 In vierv of the foregoing,^{the GAAR ruledas follows:-}

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"i). Whether the product viz.^'Paratha' i.e.^{various vorieties of paratha} produced by the applicant merit classification^{under HSNCode 19059090?} Ans.^'Paratho Merits classification^{at HSN 2 1069099.}

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ii). llhether the product, namely,^'Paratha' i.e. all varieties of Paratha produced by the applicant are chargeable to 5% GST (i.e. 2.5% SGST and 2.5% CGST) under Sl.No. 99A of Schedule-l of Notification No. 01/2017-CT (Rate) and Notification No. 01/2017-IT (Rate) dated 28-6-17?

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Ans.^'Paratha are covered at

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(il Entry No. 453 of Schedule-lll of Notification No. 0l/2017-Central Tax (Rote) dated 28-06-2017 for the period fron 01-07-2017 to 11-ll-2017 and liable to GST at the rate of 18%^(9% SGST+9% CSGT) and

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(ii) Entry No. 23 of Schedule-lll of Notification No. 01/2017-Central Tax (Rate) dated 28-06-2017 (as amended by Notification No. 4l/2017-Central Tax (Rate) dated l4-ll-2017) with effect from 15-11-2017 and liable to GST at the rate of lSok (9% $GST+9% csGT)."

¶27

Aggrieved by the afbresaid advance ruling, the appellant has tlled the^prescnt appea[.

¶28

7.1 The appellant in the grounds of appeal has subrnitted that the^{GAAR erred irr} observing that Paratha is not classifiable under Chapter Heading 1905^as they require 3-'l minutes of cooking as in the GST Tariff and HSN explanatory notes to Chapter^{19. it has} not been mentioned that Heading 1905 only covers ready to eat^products. The appellant subrnitted that GAAR also erred in observed that^plain chapatti or roti does^{not require} an.v- processing belbre consumption as if paratha. chapatti or roti^presented in^packed condition and bought by consumer. they require to be subjected to heating^process for rnaking thern eatable. The appellant ret-erred lhat pizza bread. covered under Heading I 905. is also eligible for concessional rate ol duty vide Notification^{No. 01/20I 7-C'l} (Rate) dated 28.06.2017 and 5o/o GST is applicable on pizza bread, rusk and toasted brcad and it is clear that pizza bread and toasted bread require^{heatingand cookingbeforc} consumption and this fact alone proves that Heading 1905^{is not restricted to product} ready for consumption. The GAAR has not^given any finding lor^arising on^the conclusion that product rvhich requires further^processing or cooking^{cannot be classifled} under Heading 1905.

¶29

7 .2 The appellant subrnitted that the GAAR erred in holding that^Rules l,^{2 and 3} of Rules oi Interpretation is not applicable to^present case and Rule 3(b)^{refers to mix or} composite goods which are classifiable under two^{or moreheading and paratha. despite} being made from wheat flour, does not have any^{specificessential characterb,v rvhichit} can be described and in common^parlance also^{knorvnas paratha and paratha. not being} specially mentioned under Heading 1905, is a distinct cc,mmodity^{not being classillablc} elsewhere rvould be classit'iable under CTH 2106. The appellant^{submittedthat non} inclusion of word Paratha in Heading 1905 does not exclude it frorr being^classified under the same Heading and availing benefit of Entry at 99A of^Schedule I^ol' Notification No. 0l/2017-CT^(Rate). The GAAR should have appreciated^{the nature} of goods akin to the goods mentioned in Heading and that the Heading would only broadly describe the goods f'alling under it. The GAAR in^{presentcase onlyapplied nomenclature} test and not given any importance to end user test and how the^product is being^consumed by people in general. T'he cnd user test and how the^p roduct^{is knownin the nrarketand} the way it is consutned is an essential test fbr the^purpose of classific c undisputed fact that Parathas are similar to Chapatti^{or Roti and many p} 'a Page 3 of l0

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paratha instead of^{plainroti or chapatti. Rule 3(b) makes it clear that rvhen thereis a} mixrure of materials,^{the differentmaterials shallbe classified as if they consisted of the} material which^{gives them their essential character and in presentcase, essential character} of'parathaisgivenbywheatflourandthereforeRule3(b)wouldbeapplicableand paratha. item ofwheat^{flour, wouldbe classitiable under Heading1905. Even otherwise.} in view of Rule⁴ of^{Rulesof Interpietation.whichstates that goodswhichcannotbe} classified in accordance^{with Rules l. 2 and 3 shall be classified undertheheading} appropriate to the^{goods to which they aremost similar, there is no doubt that parathas} are similar to^{roti and chapattiand consumedin similarfashion'}

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7.3 The appellant^{relied upon the Appellate Advance Ruling in case of M/s} Ramachandran^Bror [2018^{( l8) GSTL 367] wherein it was heldthat goodswhichare not} covered under specitic^{heading are classitlable under heading appropriateto the goodsto} $,hich they have the^{mostsimilarcharacter and that if such goods are similar to other} gootls. then the residual entry^{cf classificationshouldnot be resortedto. Theappellant} also relied upon^{the ruling of MaharashtraAuthorityof AdvanceRuling in case of M/s} Signature Intemational^{Foodslndia Pvt Ltd} t2019^{(20) GSTL 6401 whereinit was held} that paratha is covered^{under Entry99A and tiabte to 5% GST.The appellant submitted} that Maharashtra^{Authority while holdingabove, observed that various types of Indian} Breads called by different^{namesby users depending upon their regionslike Roti, fulka'} bhakhri. rotla etc.^{and therefore, classificationshould not merely be guidedby} nomenclature but it should^{be guided by the mannerit is consumed'}

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7.4 The appellant submitted^{that the GAARerred in classify the goods under residual} snrq, i.e. Heading 2106^{as residual entrycoversall the itemswhichare nowhere specified} or. are not classiflable^{in a more appropriate heading whereasin the present case, as} discussed above. it is clear^{the parathasare most appropriately relatable to roti and} chapatti and consumed^{in samemannertherefore, whena more appropriate classification} is available i.e. Heading^{1905,the GAAR enedin resortingto residual heading and not} fbllowing the principles of^{classification.}

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g. During the course of^{personalhearing heldon 28.07.2022, the advocate t'or the} appellant reiterated the^{submissions made in the appeal dated 04.08.2021.}

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FINDINGS:-

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g. we have caref'ully^{gone through and considered the appeal and written} subrnissions filed by the appellant,^{submissions made at the time of personalhearing.} Advance Ruling^given by^{the GAARand other material available on record.}

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The main issue here is to^{decidethe classiflcationoftheproductviz. varioustypes} of paratha i.e. Malabar^{Paratha,MixedVegParatha.Onion Paratha,MethiParatha,Alu} Paratha. Laccha Paratha, Mooli^{Parathaand Plain Parathahaving common ingredient as} r.r,heat flour varying in composition from^{36% lo 62Yo and having other ingredientsviz.} Water. edible vegetable oil, salt,^{anti-oxidant etc. These Parathas are soldby appellantin} packed and tiozen condition and^{required to be cooked on panor griddle for-3-4minutes} NS till the Paratha is^{golden brownon both sides.Thedetailedcooking i} provided on the packaging ofrespective^Parathas.

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The appellant in its submission stated that, their product i.e. various types ol Parathas is classifiable under Heading 1905 which covers "Bread, pastry, cakcs. biscuits and other bakers' wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing rvafers, rice paper and sirnilar products" and not under Heading 2106 which covers "Food preparations not elsewhere specilied or included" as held by GAAR which is a residual entry.

¶42

We find that the classification of goods under the GST regime has to be done in accordance with the Customs TarifT Act, 1975, which in tum is based on Harmonized System of Nomenclature, popularly known as the 'HSN'. The rules of interpretation. section notes and chapter notes as specified under the Customs Tariff Act. 1975 are also applicable for classification of goods under the GST regime. However, once an item is classified in accordance with the Customs Tariff Act, 1975, the rate of tax applicable rvould be arrived at on the basis of notifications issued under GST by the respective Governments.

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The appellant claimed that Paratha is classifiable under Chapter Heading 1905 of Customs Tariff Act, 1975 which is reproduced below:

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CHAPTER 19

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1905	BREAD, PASTRY, CAKES, BISCUITS AND OTHERBAKERS' WARES,WHETHERORNOTCONTAININGCOCOA;
	COMMUNIONWAFERS,EMPTYCACHETSOFAKIND SUITABLEFORPHARMACEUTICAL USE,SEAL"VGWAFERS, RICE PAPER AND SIMILARPRODUCTS
19051000	Cispbread
190520 00	Gingerbreadandthelike
	Suzeetbrbcuifgwafflesandwafers;
1905 31 00	Sweefbiscults
190532	Wafflesandwafers: Communionwafers:
19053211	Coatedwith chocolateorcontaining chocolate
19053219	Other
1905 32 90	Other
190540 00	Rusks,toasfedbreadandsimilar toastedproducts
1905 90	Other:
19059010	Pasfrlesandcakes
19059020	Elscrlfsnot elsewherespecified orincluded
1905 90 30	Extrudedor expandedproducts,savouryorsalted
19059040	Papad
190590 90	Other

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I'he general explanatory note to Chapter 19 as per HSN is as follows:

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"This Chapter coyers a number of preparations, gene-ally used for food, which are made either directly from the cereals of Chapter 10, from the products qf' Chapter I t or from food flour, meal and powder of ttegetable origin of other Chapters (cereal flour,^{groats and meal, starch,} fruit or vegetable /lour, meal and powder

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goodsofheadings04.0lto04.04.TheChapteralsocoverspastrycooks,prodttctsand biscuits, even^{whennot containing} flour,^{starch or other cerealproducts' "}

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The explanatory^{noteto Chapterheading1905as per HSN is as follows:}

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,,This ieading coyers all bakers'wares. The most common ingredients of suchwares^are cereal Jlours,^{leavensand salt but they mayalso contoin other ingredients sttchas:} gluten, starch, flour^{of leguminousvegetables,malt extactor milk'seedssuchas poppy'} 'rrro.oy or anise, sugar,^honey,eggs, fax,^cheese, fruit'^{cocoain any proportion'mea4} fi.sh,^bakery "^{improvers", etc' Bakery " improvers " servemainly to focilitatethe} working of the dough,^hasten fermentation,^{improve the characteristics and appearance} o.ftheproducnandgivethembetterkeepingqualities.Theproductsofthisheodingmay alsobeobtainedfromadoughbasedonflour'mealorpowderofpotatoes.''

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From the above^{and explanatorynotes to HSN1905,it canbe easily inferredthat} above chapter^{covers preparationof flour, generally used as food' whichare made lrom} the products of^{Chapterl1 and Heading1905 covers Bread, Pastries, Cakes etc. which} are completely^{cooked and ready for consumption whereas the appellant's producti'e'} various types^{of Parathas require 3-4 minutesof cooking on a pan or griddlebefore} consumption' on^{this ground,the productin question i.e. various types of Parathas do not} rrerit classif'rcation^{under Headrng1905'}

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The appellant^{in their groundsof appealstressed on the point that their product} i.e. parathas are^{akin to roti or chapatti whichis classifiable under Heading 1905and} liabie to 5% GST^{by virtue of Entry at 99A of Scheduleto NotificationNo' 0l /20I 7} central Tax^{(Rate) 28.06.2017.The appellanthas also contendedthat, while determining} classification of^{Paratha, Rule 3(b) of Rules of Interpretation of Tariff is squarely} applicable. According^{to the saidrule Paratha wouldbe classifiableas perthe component} *hi.h giu". it. it's^{essential character, which in this caseis wheat flourand accordingly} paratha is more appropriately classifiable under Heading^{1905 instead underresidual} entry at Heading^2106'

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l4.l As regard^{the appellant's contentionthattheir product is sirnilar to roti or chapatti,} we have^gone through^{the compositionof various types of parathas as providedby the} appellant and^{found that they have one common ingredient wheatflour (369/0 ro 620A} depending upon^{the typeofparatha) and other ingredientsare water, ediblevegetableoil.} salt.anti.oxidant,alu(potato),vegetables,mooli(radish).onion,methietc.whereas'in common^{parlance,plainroti or chapatti is basicallymade only frorn wheat flour apart} from water. From^{the above, it is clear that on the basis of ingredientsused in the} appellant,s^{productandroti or chapatti, compositionof bothare very different fromeach} other.

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14.2 The General^{Rules of Interpretation for classification of goods read as follows:}

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-rnlrr"r* RutelThetitlesofsections,Chaptersandsub-Chaptersareprouidedfo.reaseof only; for i"gal^{purpos"s, classificationshall be determined accordingto the} terms of the " he"adingl oia i"y relative section o_r chapter Notes and, provided such headings or^Notes di^{not otherwiserequire, according to the followingprovisions}

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Rule 2:^(a) Any reference^{in a heading to an article shallbe taken to include a re.ference} to that article incomPlete^or unfinished, pr^{ovided that.as presented; the inco} L

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unfinished article has the essential character of the complete or finished article. lt sholl also be taken to include a reference to that article complete or finished (or failing to be classiJied as complete or finished by virtue of this Rule), presented unassembled or disassembled.

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(b) An_v reference in a heading to a mdterial or substance shall be taken to include a reference to mixtures or combinolions of that malerial or substance with other materiols or substances. Any reference to goods of a given material or substonce shall be taken to include a reference to goods consisting wholly or partly of such materiol or substattce. The classification of goods consisting of more than one material or subs[ance shall bc according to the principles of Rule 3.

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Rule 3: When by application of Rule 2 (b) or for ony other reason, goods are, prima ./bcie,^{classiftable under two or more headings. classification shallbe effectedas} follows:

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(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings ore to be regarded as equally specific in relation to those goods, even if one of them gives a rnore complete or precise description of the goods.

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(b) Mixtures, composite goods consisting of dffirent materials or made up of different componenls, and goods put up in sets for reloil sale, which cannot be classi/ied by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essentiol character, insofar as this criterion is applicable.

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(c) When goods cannot be classifed by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideralion.

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Rule 4: Goods which connol be classified in accordance with the above Rules shull^be classified under the heading appropriate to the goods lo which they are most akin.

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14.3 On examining the above rules of interpretation and the contention of the appe llant that in their case Rule 3(b) is applicable for classifying Paratha under chapter heading 1905 as the component viz. wheat flour which gives Paratha its essential character is akin to Roti or Chapatti. we find that the said contention does not hold^ground as appellant's products i.e. different varieties of Parathas are different from Roti and Chapatti. The only common thread between these items is usage of wheat flour; however the^percentage of usage of rvheat flour used in Parathas manufactured by the appellant ranges from³⁶⁷⁰ to 620Z whereas the ingredient of Plain Roti or Chapatti is wheat flour apart from water.^T'hc different varieties of Parathas supplied by the appellant include ingredients such^as. margarine, salt, emulsifuing agent. milk. edible oil, sugar, bread improver.^potato,green peas, cauliflower, carrot, coriander powder, spices, cardamom, clove, nut lnc-u,. pomegranate seeds etc., depending upon the type of parathas apart from wheat llour and rvater. Even the Plain Paratha apart from whole wneat flour and water contains margarine. salt. emulsifuing agent. edible vegetable oil and bread improver. Further Roti or Chapatti is consumed directly but the Parathas manufactured and supplied by the appellant requires to be cooked before the same can be consumed. We therefore find that or Parathas supplied by the appellant will not fall under the category of Roti I rvill not be classified under Chapter heading 1905 as contended by the

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products supplied by the^{appellantare thusquite different from plain Rotior Chapattiand} are therefore, not^{eligiblefor the concessionalrate of 5% GST (applicableto Plain} Chapatti or Roti),^{provided und:r Sl.No.99A of ScheduleI to Notification No' 1/2017-CT} (Rate) dated 28.06.2017 as amended.

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14.4 The GAAR has^{classified Paratha under tariff item 2106 90 99. The detailsof the} said Chapter heading^{are reproduced below:}

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CHAPTER 21

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2106	FoodPreparationsnot^{elsewherespecified} orincluded
2106l000	-Proteinconcentrates^{andtexturedprotein} substances
210690	-Other: --^{Softdrinkconcenlrales:}
2106 90ll	--^Sharbat
2t06 90l9	--^Other
2t06 90 20	---Panmasala
2t06 9030	--^{Betel nutproduct knownas}-Supari^J
2106 9040	---Sugar-syrupscontainingadded^{flavouring or} colouringmatter,not^{elsewherespecifiedor} included;lactosesyrup;^{glucose syrupand} malto dextrinesyrup
21069050	---Compound prep.rationsformaking non-alcoholic
2106 9060	---beverages^Food flavouringmaterial
2106 9070	---Chumaforpan
2106 9080	--^{Custardplwder} ---Other:
2106 909l	--^{Diabeticfoods}
21069092	--^{Sterilizedorpasteurizedmillstone}
2to69099	----Other

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14.5 The supplementary note 5 to Chapter 2l^{of the Customs Tariffwhichexplainsthe} scope of tariff heading 2 106 is as under:

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Fleading 2106 (except tariff items 2106 90^{20 and 210690 30), inter alia,includes:}

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a. protein concentrates and textured protein substancesi

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b. preparations for use, either directly or after^{processing(such as cooking'} dissolving or boiling in water, milk or^{other liquids),for human consumption;}

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c. preparations consisting wholly or partly of foodstuffs, used^{in the making} of beverages of food preparations lor human^consumption;

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d. powders fbr table creams,^jellies. ice-creams and similar^{preparations, whetheror} not sweetened;

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e. flavouring powders for making beverages,^{whether or not sweetened;}

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f. preparations consisting oftea or coffee and milk^powder. sugar^{and anyother} added ingredients;

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(, preparations ( for example, tablets) consisting ofsaccharin^{and tbodstuff',suchas} lactose. used for sweetening^purposes;

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h. pre-cooked rice. cooked either fully or partially and their dehydrates;^{and their} dehydrates; and

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i. preparations for lemonades or other beverages, consisting,^{for example, of} flavouted or coloured syrups! syrups flavoured^{with an added concentrated extract.} syrup flavoured with fruit^juices and concentrated^{fruit juice with added} ingredients."

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Further the explanatory note to HSN Code 2106 similarly mentions that this heading covers^{"Preparations} for use, either directly or after processing (such as cooking. dissolving or boiling in water, milk, etc.), for human consumption".

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14.6 As discussed above, the Parathas supplied by the appellant are different from Plain Roti or Chapatti and cannot be treated as or covered under the category of Plain Roti or Chapatti. Fu$her as held by the GAAR, the parathas supplied by the appellant will not fall under Chapter heading 1905. We find that the appropriate classification of Parathas would be under Chapter heading 2106 as the subject Parathas require to be cooked before the sarne can be consumed. The Chapter heading 2106 covers food preparations not elsewhere specified or included and Parathas do not fall under any specific chapter head. Further as per Rule 3(c) of Rules of Interpretation, rvhen goods cannot be classifiable under Rule 3(a) or 3(b) then they shall be classified under thc heading which occurs last in numerical order arnong those which merit consideratirx. Thus, among the headings 1905 and 2106, latter occurs last in the numerical order and hence heading 2016 would be more appropriate and right classification of appellant's product, even from this consideration.

¶95

14.7 The appellant submitted that mere heating of their parathas for 3-4 minutes with a little bit of oil would not debar it from falling under Heading 1905 and the GAAR erred in not classilying Paratha under Heading 1905. We refer to cooking instructions mentioned on the packaging ofvarious frozen parathas, as provided by appellant. wherein it is rnentioned lhat "heat on a medium /lame for about 3-4 minutes (lipping after every 30 seconds) pressing gently till Paratha is golden brown on both sides". On^going through the above, we observe that the above process of 3-4 minutes of heating amounts to cooking of the Parathas as the color of the Parathas changes and the fiozen^Parathas become ready for consumption. As cornpared to Roti or Chappati or items l'alling under Chapter heading 1905 which are ready to eat and does not require any further processing befbre consumption, the appellant's products have to be cooked before the same can be consumed.

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I 5. The appellant has contended that GAAR had mainly^gone on the test of nomenclature and not given any importance to end user test as to how the^{product is} known in the market and the way it is being consumed; that Paratha is similar to roti or chapatti and both are consumed in similar fashion. In this regard we ref'er to the Suprerrc Court's^judgment in case of CCE Vs Carrier Aircon Ltd [2006⁽¹⁹⁹⁾ E.L.T. 577^(S.C].)l wherein the apex court has observed that "End use to which the^product is^pltt to b, itseU' cannot be determinative of the classification of the product. There are a nttmber o-f .factors^{whichhave to be tokeninto consideration} for^{determiningthe classificationof a} product. For the purposes of classification the relevant foctors inter alia are statutory .fiscal^{entry, the basic choracter,} function^{and use of the goods.Ll/hen a commodity} falls u,ithin a tariff entry b1t virtue of the purpose for which it is put to, the end use to which the product is put to, cannot determine the classification of that product^". In view of above^judgment of Apex Court, we infer that the end use cannot be determinative of the classification of the product. and a number of f'actors is required to be considered. As discussed above, the products in question are very diff'erent from^plain chapatti or roti and the products have to be classified on merits.

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15.1 The appellant^{hasrelieduponthe advanceruling by Maharashtra Authority of} Advance Ruling^{in the case of M/s. SignatureIntemationalFoods India Pvt. Ltd. [2019} (20) GSTL 6401. ln the^{saidcasethe authorityhas held Paratha is covered under Entry} No.99A^{(Khakhra, Plainchapatti or Roti) and is liable to concessional rate of duty. we} find that in the said^{case the authorityhas given findingsthat " The productbeforeus is} ernntined front^{this view point. The product is plain like a chapatti and unstuffed like} Gobhi paratha,^{Laccha poratho. Tous, thisis nothing buta plain chapatti and paratha is} a misnomer for^this food^{product supplied by the applicant. As such we do not find any} ttiLficulty in classifying^{the product as plainchapatti covered by entry 99A of Notification} No. of 31/2017." we^{are of the viewthat as per Section 103 of the CGSTAct' any} Advance Ruling^{is binding on the Applicantwho hassought it and on the concerned} officer or the^{jurisdictional officer in respectof the Applicant. We also point out that on} the contrary to the^{above ruling and in consonancewiththe ruling given by GAARin the} present case, we find that^{the Authority for Advance Rulingunder GST, Keralain the} case ol M/s. Modern^{Food Enterprises P!t' Ltd., while deciding the classillcation of} 'Classic Malabar Parota' and 'Whole Wheat Malabar Parota'^{has held that "Classic} Molabar^parota and^{Ll/holetlheat Malabar Paroto is classified under Schedule III of} GST laws, vicle Heading^{2106 ',Food preparationsnot elsewhere specified or included'} ttntl is taxable @18%^GST'.

¶101

15.2 Taking into account^{the above discussion and findings, we feel that rulingsof the} Kerala and Gujarat AAR^{decide the matter correctly andappropriately,takinginto} account the classification^{scheme of the tariff readwith the explanatorynotes.}

¶102

15.3 Thus. in view of the^{above,the Parathassupplied by the appellant are dif-lerenl} fiom Plain Chapatti or^{Roti antl cannot be treatedas or covered underthe Categoryof} lrlain Chapatti or Roti^{andappropriateclassification of Parathas would be underChapter} heading 2106.

¶103

ln vieu' of the^{foregoirg. we reject the appeal filed by appellantM/s Vadilal} lndustries Ltd and uPhol^d e Advance Ruling No.^{GUJ/GAAR/2201202Idated} 30.06.2021 of the Guj uthority for Advance^Ruling.

¶104

<r,.' (M d Torawane) (Vivek *fnjan) Member^(SGST) I Mernbcr [ccsr; : AhrnedabadAhrnedabad xoY. : 1r.,.09.2022.1r.,.09.2022. ai

¶105

Place : AhrnedabadAhrnedabad Date : 1r.,.09.2022.1r.,.09.2022.

¶106

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M/s Vadilal Industries Ltd.

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M/s Vadilal Industries Ltd.

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