2018 (10) TMI 308 – AUTHORITY FOR ADVANCE RULING, GUJARAT – 2018 (18) G. S. T. L. 68 (A. A. R. – GST) – Classification of goods – RBD Palm Stearin – Whether RBD Palm Stearin would fall under Chapter 1511 – ‘Palm Oil and its fractions, whether or not refined but not chemically modified’ or under Chapter 382311 ‘Industrial monocarboxylic fatty acid, acid oils from refining, stearic acid, Palm Stearin?
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Held that:- Now there is specific Tariff Item 1511 90 30 for ‘Refined bleached deodorized palm stearin’. Therefore, the product ‘Refined bleached deodorized palm stearin’ is classifiable under Chapter Heading 1511 with Tariff Item 1511 90 30 in view of Rule 1 and Rule 3(a) of the General Rules for the Interpretation of the First Schedule to the Customs Tariff Act, 1975 – It is observed that CBEC Circular No. 81/2002-Customs dated 3.12.2002 was issued in the context of the then existing entries in the First Schedule to the Customs Tariff Act, 1975.
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Similarly, in the judgement o
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Groundnut Oil, Palm oil (Palmolein), Sunflower Oil, Vanaspati and Industrial Oil such as Castor Oil. 2.1 The applicant has submitted that it purchases Crude Palm Oil (HSN 1511 10 00) from either a foreign vendor or local vendor. Thereafter, the said Crude Palm Oil is refined in the storage tank from which Refined Palm Oil (HSN 1511 90 10) is generated. Along with the Refined Palm Oil, there is a by-product which gets automatically generated which is called Palm Fatty Acid (HSN 3823 19 00). 2.2 The Refined Palm Oil (HSN 1511 90 10) is then further processed in Fractionation Plant (which includes Crystallization and Filtration process) from which following two products are generated – (a) Palmolein Oil (b) RBD (Refined Bleached Deodorised) Palm Stearin. 3. The applicant has sought advance ruling on the question – Whether RBD Palm Stearin would fall under Chapter 1511 – Palm Oil and its fractions, whether or not refined but not chemically modified or under Chapter 382311 Industrial monoc
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hours. The crystallized slurry is then ready to be filtered at the membrane filtration system. Filtration Section The partially crystallized RBD palm oil is fed to membrane filter press by filter feed pump. The filter is of mixed packed type and 3-piece detachable type of rubber membrane with individual squeezing air / hose connection, closed delivery, hydraulic press closing type. The filtrate, i.e. olein passes through a filter cloth of suitable porosity, and flows along the corrugated channels of a rubber membrane, which wraps behind the filter cloth, and guide the olein out of the filter frame into a channel for closed discharge into a olein receiver tank. When the chambers are filled with cake, i.e. stearin, the feed is topped and high pressure fluid (usually compressed air) is admitted behind the membrane which being elastic, presses or squeezes the stearin mass in the chamber free of liquid olein entrained within the inter-spaces of the crystals out into the discharge channel fo
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he month of June, 2017 wherein Central Excise Duty was paid under Chapter 38231900. It is further submitted that during the earlier law, the applicant was of the opinion that RBD Palm Stearin would fall under Chapter 3823 1112 and 3823 1119 and had raised the invoices by charging Excise Duty at the rate of 12.5%. 6.2 The applicant further submitted that the Budget, 2017 was introduced on 1st February, 2017 wherein the amendment came in First Schedule of Customs Tariff Act, 1975 where a new tariff was created under HSN 1511 90 30 for Refined Bleached Deodorised Palm Stearin to harmonise the Customs Tariff in accordance with WCO classification decision [clause No. 109(b) of the Finance Act, 2017]. The applicant submitted that with this amendment, there is lack of clarity as to whether Palm Stearin would fall under 1511 9030 or 3823 1112. 6.3 The applicant also submitted that in the Notification No. 18/2017-Customs, dated 9th May, 2017, RBD Palm Stearin was introduced by Customs in Chapte
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heir application for advance ruling as well as at the time of personal hearing and views of Central Goods and Services Tax and Central Excise Commissionerate, Ahmedabad North. 9. The issue involved in this case is regarding classification of the product RBD (Refined Bleached Deodorised) Palm Stearin being supplied by the applicant. 10. The Explanation (iii) and (iv) of the Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and Notification No. 1/2017-State Tax (Rate) dated 30.06.2017 provides as follows :- Explanation. – For the purposes of this notification, – (i) …… (ii) …… (iii) Tariff item , sub-heading heading and Chapter shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory N
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g. 3823 19 00 – Other kg. 3823 70 – Industrial fatty alcohols kg. …… ………… 11.2 The First Schedule to the Customs Tariff Act, 1975 has been inter-alia amended as follows; vide Section 110(b) read with the Third Schedule of the Finance Act, 2017 In the First Schedule to the Customs Tariff Act – (1) …… (2) …… (3) in Chapter 15, after tariff item 1511 90 20 and the entries relating thereto, the following tariff item and entries shall be inserted, namely : – 1511 90 30 Refined bleached deodorized palm stearin Kg. 100% 90% (4) in Chapter 38, – (a) in heading 3823, for sub-heading 3823 11 and tariff items 3823 11 11 to 3823 11 90 and the entries relating thereto, the following shall be substituted, namely:- 3823 11 00 Stearic acid Kg. 30% – 11.3 In the Annexure IV (Legislative Changes), Part A (Customs), Sub-part III (Amendment in the First Schedule to Customs Tariff Act, 1975) of the D.O. F.No. 334/7/2017-TRU dated 01.02
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1) (2) (3) 3823 Industrial monocarboxylic fatty acids; acid oils from refining; industrial fatty alcohols – Industrial monocarboxylic fatty acids; acid oils from refining : 3823 11 00 Stearic acid kg. 3823 12 00 – Oleic acid kg. 3823 13 00 – Tall oil fatty acids kg. 3823 19 00 – Other kg. 3823 70 – Industrial fatty alcohols kg. …… ………… 12. Thus, now there is specific Tariff Item 1511 90 30 for Refined bleached deodorized palm stearin . Therefore, the product Refined bleached deodorized palm stearin is classifiable under Chapter Heading 1511 with Tariff Item 1511 90 30 in view of Rule 1 and Rule 3(a) of the General Rules for the Interpretation of the First Schedule to the Customs Tariff Act, 1975. 13. It is observed that CBEC Circular No. 81/2002-Customs dated 3.12.2002 was issued in the context of the then existing entries in the First Schedule to the Customs Tariff Act, 1975. Similarly, in the judgement of Hon ble Supreme Court, in the case o
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