2018 (9) TMI 1184 – APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA – 2018 (17) G. S. T. L. 128 (App. A. A. R. – GST) – Slaughtering & processing of Sheep/Goat meat and supplies these products to Army against tenders issued by the Indian Army – supplies in unit containers or not? – Whether the supplies being made by the appellant to Army in respect of meat of sheep/goat in packages (a sample of packing material was produced before us) can be considered as supplies in unit containers or not in terms of the explanation under Notification No. 1/2017- Integrated Tax (Rate) dated 28/06/2017 as amended?
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Held that:- The nature of supplies is such that it is not possible to decide the exact quantity (either weight or volume) or the number in advance in respect of the packages to be sent to Army as the goods of supply are natural, not man made, and no two animals are same. Also, there is no such requirement from the buyer side i.e. Army who have floated the tender on total weight basi
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on of the same on the package. Therefore, the frozen meat of goat/sheep supplied by the appellant to Army in HDPE bags does not qualify for the supplies made in unit containers as per definition provided in the explanation to the notification no. 01/2017-IGST (Rate) dt. 28-06-2017 as amended.
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Ruling:- The whole (Sheep/Goat) animal carcass in its natural shape in frozen state in different weight and size packed in LDPE bags without mentioning the weight and one or two such LDPE bags further packed in HDPE bags being supplied to Army by appellant against tender shall not qualify as product put up in “Unit Container”. – MAH/AAAR/SS-RJ/10/2018-19 Dated:- 11-9-2018 – SMT. SUNGITA SHARMA, AND SHRI RAJIV JALOTA, MEMBER PROCEEDINGS (under Section 101 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain pr
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ight and size as that of the other. Further, there is no fixed quantity & size in which these carcasses are dispatched to Army, as the said dispatches are made on the basis of the weight of the frozen carcass which varies in every case, depending upon the weight of the animal s carcass packed in different consignments. Further, the consideration also is charged on the basis of weight of the meat supplied which is not uniform and not pre-determined in each consignment. The packaging and the marketing pattern on illustrative basis is explained as below:- Mutton: – Each frozen carcass is put in LDPE Bag (Primary Packing) which is not sealed & no weight is mentioned on such LDPE Bag. Thereafter, generally two of such LDPE Bags are put in HDPE Bag (Secondary Packing) and the weight of the two carcass packed in two individual LDPE bags is manually mentioned by marker. The reason of mentioning the weight manually by an ink marker is that the weight of each packaging is not pre-determi
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tion No. 2/2017- Integrated Tax (Rate) dated 28.06.2017 vide Sr. No. 10 provided for exemption from whole of the integrated tax leviable thereon as reproduced under : Schedule S. No. Chapter/Heading/Sub-heading/Tariff item Description of Goods 10 0204 Meat of sheep or goats, [other than frozen and put up in unit containers] Therefore, the tax on items of chapter sub heading 0204 was leviable only where the frozen meat of sheep or goats was put up in unit containers . ii. Thereafter, an amendment was carried out in the schedule Il of Notification No. 1/2017 dated 28th June 2017 – Integrated Tax (Rate) vide Notification No, 43/2017 Integrated Tax (Rate) dated 14th November 2017 w.e.f 15th November 2017 onwards, and the following entry was inserted which relates to taxability of the subject products. The Schedule I of the Notification No 43/2017-lntegrated Tax (Rate) dated 14th November 2017 deals with the products which are subject to 5 % GST and entry No 1 which pertain to sheep/Goat me
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tem Description of Goods 8 0204 All goods, fresh or chilled 9 0204 All goods (other than fresh or chilled) other than those put up in unit container and, (a) bearing a registered brand name; or (b) bearing a brand name on which actionable claim or enforceable right in court of law is available father than those where any actionable claim or enforceable right in respect of such brand name has been foregone voluntarily], subject to conditions as in the ANNEXURE l] ; Now a diligent perusal of the above relevant entries reproduced above brings out that GST is chargeable only when the following conditions are met – Up till 14th November 2017, if product is Frozen and put up in Unit container – On or after 15th November 2017, if the product is Frozen , put up in Unit Container and is Branded . D). In the present facts of the case, since the meat supplied by the appellant was not in predetermined quantities in each consignment, the supply could not be construed as in unit containers as define
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uthority for Advance Ruling, vide order no GST-ARA-21/2017-18/B-27 dated 21/04/2018, decided that the supplies made by the appellant were in unit containers and accordingly were chargeable to tax under schedule Il entry No. 4 of the Notification 01/2017-lntegrated Tax (Rate) dated 28.06.2017 for the period 01.07.2017 to 13.11.2017 and thereafter under schedule I entry No. 1 of the Notification 01/2017-lntegrated Tax (Rate) dated 28.06.2017 as amended vide Notification 43 of 2017- Integrated Tax (Rate) dated 14.11.2017. G). Being aggrieved by the orders of the Maharashtra Authority for Advance Ruling, the appellant has preferred the present appeal before this appellate authority on the following grounds which are without prejudice to each other. GROUNDS OF APPEAL 1. The authority for advance ruling has grossly erred in concluding that the clearances of the appellant are in unit containers, which is contrary to the judicial discipline on the subject and is in utter mis-interpretation of
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ontainer or not. In the present case, the carcass of animal is packed into one LDPE bag and two such LDPE bags are then packed into one HDPE bag which is used as master packing to hold the two individual LDPE bags and no one packaging would match in weight as the weight of an animal carcass would never be same as that of the another. Therefore, by no stretch of imagination it could be concluded that the packaging holds predetermined quantity as the weight varies in each and every individual packaging and is depended upon the weight of the animal carcass which is packed in to the individual LDPE bags. Therefore the conclusion drawn by the authority of advance ruling that the packing is in a unit container is highly misconceived and contrary to the facts on records and according may kindly be quashed in entirety. 2. The authority of advance ruling failed to assail the definition of UNIT before drawing their final conclusion on the matter. The Merriam Webster Dictionary defines unit as a
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e a guiding pole star to arrive at a fair and true conclusion. The expression unit container was first used in Tariff item. No 1B in the old Central Excise Tariff which reads as under: 1B Prepared or preserved foods put up in unit containers and ordinarily intended for sale, including preparations of vegetables, fruit milk cereals, flour, starch, birds, eggs, meat offals, animal blood, fish, crustacean or molluses, not elsewhere specified. Thus, under the old Central Excise Tariff, prepared/ preserved food put up in unit container and ordinarily intended for sale were exigible to central excise duty. Therefore there were twin requirements to be satisfied for the levy of duty, firstly the goods should be put up in unit container and secondly, they should have ordinarily been intended for sale. The expression unit container was not defined in the old Central Excise Tariff but instructions in this regard were issued by Central Board of Excise and Customs vide letter M.F. (D.R.I.) No. B/5/
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ver, in the instant case, even the appellant manufacturer does not know the weight of the animal carcass until it is weighed and eventually packed. It is not a case where soap cakes or washing powder is packed in predetermined quantity in its containers as there the manufacturers know as how much quantity they intend to pack in the respective unit containers and the unit containers are also designed to hold the specific predetermined quantity for example; 1 kg, 5 kg or 10kg etc. and the unit containers would have the predetermined quantity preprinted on the container. In the instant case each and every packaging would vary in weight as the weight of the content to be packed is not predetermined and would entirely depend upon the weight of the animal carcass which is packed in the LDPE bags and no two animals would have the same weight. Therefore the interpretation forwarded by the Authority of Advance Ruling is under misinterpretation of the definition and the facts on the record. 4. T
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cheated. It can therefore be very well understood that no intelligent manufacturer would pack prepared or preserved foods (or indeed any similar product of common consumer use) in a container which is not full or practically so. Nor would a prudent customer readily buy a product in a container which does not appear to be full. 46. The above observations on the methods of marketing of common consumer products, do not require any special knowledge because they are a matter of common experience. The tariff item and the Finance Ministry s instructions are consistent with the general experience and practice as mentioned above. General experience would certainly show that prepared and preserved foods and the like, as they are ordinarily sold in the market, are packed in containers which contain a specific and clearly marked quantity of the goods. The quantity may vary according to the product and the manufacturer, but even then there are many standard quantities common to different manufact
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r under the New Central Excise Tariff Act, 1985 was defined to mean as under: Container whether large or small (far examples, tin, can, box, jar, bottle, bag or carton, drum, barrel, or canister) designed to hold a pre-determined quantity or number. In the context of new Central Excise Tariff Act, 1985, in the case of Agro Foods Punjab Ltd. v. Collector of Central Excise, 1990 (49) E.L.T. 404, = 1990 (3) TMI 194 – CEGAT, NEW DELHI the tribunal observed as below; We hold that there is no difference either in the entry, in between 1B of the old Tariff and new Tariff 2001.10 or in the issue involved in both the cases, Following the ratio of the decision in the case of M/s. HPMC we hold that clearance in barrels does not amount to sale of the contents as put in a unit container. Accordingly, the goods in question are not classifiable wider sub-heading 2001.10 but they are classifiable under sub-heading 2001.90, The Hon ble Tribunal in another judgment in the case of MP Vegetable Fruit Prod
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bunal held that meat articles packed in loose plastic bags which were not in uniform quantities cannot be held to be a unit container. The bags in this case were not sealed similar to the LDPE bags in the present case and weight of the animal carcass is also varied in each and every consignment of ours. 6. The explanation to the notification 01/2017 Integrated Tax(Rate) and 02/2017 Integrated Tax ( Rate) both dated 28/06/2017 as amended defines Unit Container in the similar tone and phraseology as to the definition under the old and new Central Excise Tariff and accordingly the judicial precedents ordained in context to the Central Excise provisions in relation to unit containers would very well apply to the present controversy in hand and therefore it can be safely concluded that the contents of appellant s products being not uniform in size and weight in not predetermined quantity and accordingly not packed in unit containers and the appellant is entitled to the exemption as provided
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mption or other benefits are provided by the Government in exercise of its statutory power normally have some purpose and policy decision behind it. Such benefits are meant to be provided to the investors and manufacturers. Therefore, such purpose is not to be defeated nor those who may be entitled for it are to be deprived by interpreting the notification which may give it some meaning other than what is clearly and plainly flowing from it. Further the Hon ble Tribunal in the case of: DHL LEMUIR LOGISTICS PVT. LTD. Versus COMMISSIONER OF C. EX., MUMBAI 2012 (284) E.L.T. 505 (Tri. – Mumbai) = 2012 (6) TMI 458 – CESTAT, MUMBAI has ordained in unequivocal terms in para 5.2 of their judgment as under : 5.2 Any exemption notification has to be interpreted based on the language used therein. The Supreme Court in the case of Hemraj Gordhandas Vs. H.H.Dave, Asst. Collector of Central Excise & Customs [1978(2)ELT J 350 (SC)] = 1968 (9) TMI 112 – SUPREME COURT OF INDIA laid down the princip
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rded by the Authority of Advance ruling is in utter misinterpretation of the facts on record and is in utter disregard to the judicial disciple on the subject and accordingly may kindly be quashed in entirety. PERSONAL HEARING 8. The personal hearing in the matter was fixed on 14.08.2018 which was attended by Sh. Gautam Chugh, Advocate and Sh. Ashok Mishra, C.A., on behalf of the appellant who reiterated their written submissions and also presented two rulings from Haryana State Advance Ruling Authority given in favour of the applicants(other than appellant) in similar matters. They further argued that even the number of carcass was not fixed in every package and many times there was only one carcass supplied depending upon the weight and size of the animal. The appellant submitted the sample packing material being used for the inner and outer packing of the carcass. They confirmed that in pre-GST regime the frozen meat in sealed container was levied to VAT in some states. The jurisdic
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ses of this Schedule, – (ii) The phrase unit container means a package, whether large or small (for example, tin, can, box, jar, bottle, bag, or carton, drum, barrel, or canister) designed to hold a predetermined quantity or number, which is indicated on such package. The facts of the case are such that if the said supplies are in unit container than same are chargeable to GST @12% for the period from 1st July 2017 to 14th November 2017 and @5% thereafter (provided they bear brand for this period). The issue of branding of the said goods is not before us as the appellant had sought advance ruling only on the issue of Unit Container and they are in appeal for the same. 11. We observe that the definition of Unit Container is provided under the CGST Act as an explanation to the exemption Notification and we do not see any reason to resort to the similar definitions available in other Acts/Statutes. So, we will concentrate and restrict our scope to the definition available under the CGST A
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antity or number is possible when the buyer/customer/consumer/recipient is aware in advance i.e. before the purchase/receipt of the said goods about the fixed quantity/weight/number contained in the package which is not the case here. We have gone through the conditions specified in the tender document of Army and found that at nowhere it is mentioned that the said bags (LDPE or HDPE) should contain any fixed weight/quantity or number of the goods to be supplied. Just by mentioning the weight of the carcass (which may be one or two in number) on the outer packing in no way can be considered as the pre-determined quantity of the package. There is no doubt that the samples of bags produced before us during hearing are covered under package as per the definition given in explanation to the notification but that package is not designed to hold any predetermined quantity. In the specifications mandated by the Army for the packing following is mentioned- Packing- Each dressed carcass subsequ
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there is only one carcass inside the HDPE bag and some other times these are two. AAR, Maharashtra, has also not ruled that the quantity in the package is pre-determined. They, however, observed that the number is pre-determined which is known to the Army that each HDPE bag will contain two LDPE bags. This observation of AAR is contrary to the wordings of question No. 1 posed before them which clearly indicates that one or two such LDPE bags further packed in HDPE bags . As claimed by the appellant, even the number is not pre-determined as the carcass may be one or two depending upon the size of the animal but it can never be more than two. Regarding the observation of AAR that Army is aware about the pre-determined number, we have seen that Army is not concerned about the number as they have neither floated tender on the basis of number nor are they making payment to appellant based on numbers. The number of carcasses is of no importance to the Army as their contract is based on weigh
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sdictional officer, during the hearing, had pointed out that the appellant was paying VAT in pre-GST era on the same activity. We have seen the copies of contract of the appellant with Army of pre- GST era and the invoices raised by the appellant. It is true that the contract was awarded for the basic rate and VAT was shown separately. The invoices confirm that the appellant was collecting and paying VAT at that time as the VAT was applicable on the Frozen meat in sealed containers . The new contract under GST regime is also on similar lines i.e. on basic rates and GST is shown as separate. But the invoices produced by the appellant shows that they have collected only basic rates from Army and not charged the GST as the concept of unit container was not under VAT. Here we observe that applicability of VAT on said activities in pre-GST regime would not render the supplies chargeable to GST as we have to examine the issue in light of GST Acts, Rules, Notification etc. The conditions of c
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