Page 130 - GSTL_16th July 2020_Vol. 38_Part 3

368 GST LAW TIMES [ Vol. 38
Further Chapter 1006 which has been claimed by the appellant to be
proper classification for FRK reads as under :

1006 Rice
1006 10 - Rice in the husk (paddy or rough) :
1006 10 10 --- Of seed quality kg. 80% -
1006 10 90 --- Other kg. 80% -
1006 20 00 - Husked (brown) rice kg. 80% -
1006 30 - Semi-milled or wholly-milled rice, whether or
not polished or glazed :
1006 30 10 --- Rice, parboiled kg. 70% -
1006 30 20 --- Basmati rice kg. 70% -
1006 30 90 --- Other kg. 70% -
1006 40 00 - Broken rice kg. 80% -

While going through the above classification of Rice under Chapter 10, we find
that rice in natural form including rice after certain processing like husking, mill-
ing, parboiling etc. fall within the ambit of Chapter Heading 1006. We find that
rice in its natural form with its essential characteristics as intact is classified in
Chapter 10, and FRK is not covered in the said chapter. We find support from the
Chapter Note 1 of Chapter 10 which mentions as below -
1. (A) The products specified in the headings of this Chapter are to be classi-
fied in those headings only if grains are present, whether or not in the
ear or on the stalk.
(B) The Chapter does not cover grains which have been hulled or
otherwise worked. However, rice, husked, milled, polished, glazed,
parboiled or broken remains classified in Heading 1006.
From the manufacturing process, it is noted that to manufacture FRK, the natural
rice has to be converted into Rice Flour. The moment the Rice is converted into
Flour, essential characteristics of rice is changed and no grain remain present in
the product and therefore, the same cannot be classified in any of the heading of
Chapter 10 in terms of Chapter Note 1(A) ibid. Further, consequent upon chang-
ing from rice grains to rice flour and then preparation of any product out of rice
flour, whether similar to Rice or not in shape, the resultant product does not fall
in the inclusive part of the Chapter Note 1(B) of Chapter 10, which specifically
mentions Rice (i) Husked, (ii) milled, (iii) polished, (iv) glazed, (v) parboiled or
(vi) broken as in all such form of Rice, natural grains are present in the product.
Thus, we are of considered opinion that FRK is out of the ambit of Chapter 10.
14. It is further noted that the Chapter 1904 covers the otherwise
worked preparations of the articles classified in Chapter 10 or 11 to the extent
beyond that provided in the headings of or notes to Chapter 10 or 11. To deter-
mine the exact classification, the relevant portion of the Chapter Heading 1904 of
GST tariff is as below -

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