Classification of goods— In the instant case, the appeal is mainly based on two major points viz.

(i) that the AAR was wrong in not following the precedent decisions of the higher judicial forum on the premise that the said cited decisions were of pre GST regime, hence were inapplicable to the present context.

(ii) That the de-oiled cakes were unintended products of their main manufacturing activity of manufacture of rice bran oil/mahua oil and were in fact technological necessity and therefore were 'waste products' not exigible to GST.

The appellant has prayed for—

(a) setting aside/modifying the order of AAR.

(b) The term waste is not defined in CGST Act 2017 and therefore the case laws of Apex court and Higher Courts are having binding value on the scope of the term.

(c) The 'Waste' generated during the manufacturing process cannot be treated as 'supply' in light of judicial pronouncements since it is mere technological necessity.

(d) The provisions of Section 17 and more specifically sub-section (2) of CGST Act 2017 are inapplicable.

(e) Entire Input Credit should be allowed since the whole of it is being used in the manufacture of solvent extract oil.

Tthere is no specific entry for this item or similar product anywhere in the tariff and therefore it should be classified under the residuary entry serial number 453 of the Notification No. 01/2017-CT(R) dated 28.06.2017 [“Any Chapter-Goods which are not specified in Schedule I, II, IV, V, VI"] having a GST rate of 18% (CGST @9% + SGST @9%). Hence, the appellant is required to pay GST @18% on the supply of de-oiled mahua cake and is therefore entitled to avail input tax credit.

Held that— This authority modify the ruling of lower authority as follows—

(i) Input Credit attributable to the supply of de-oiled rice bran cake (exempted supply) is to be reversed by the appellant in terms of Section 17(2) of the CGST Act 2017; and

(ii) GST @ 18% is payable on supply of de-oiled mahua cake with consequent allowing of input credit in terms of Section 16 of the CGST Act 2017.