In AAR No.10 /AP/GST/2023 -AAR- AAR (Andhra Pradesh) rules that 'N.B.S. Crackle' is not a 'sugar boiled confectionery'
Members K. Ravi Sankar & RV Pradhamesh Bhanu [26-05-2023]

Read Order: In Re: M/s Sri Venkateswara Cashew Chikky Manufacturers

Chahat Varma

New Delhi, September 7, 2023: The Andhra Pradesh bench of the Authority for Advance Rulings has determined that the product known as 'N.B.S. Crackle,' manufactured and supplied by M/s Sri Venkateswara Cashew Chikky Manufacturers (applicant), containing ingredients such as sugar, cashew nuts, butter, liquid glucose, and other permitted flavours, should not be classified as a ‘sugar boiled confectionery’.

The applicant, engaged in the manufacturing and supply of an edible product known as 'Crackle,' which was also recognized as 'N.B.S. Crackle,' supplied this product as industrial raw material to ice cream manufacturer, Hindustan Unilever Limited and Dairy Classic Ice Creams (P) Ltd. The product was primarily used as a topping for ice creams. The applicant had sought an advance ruling to determine the classification of their product, which contained ingredients such as sugar, cashew nuts, butter, liquid glucose, and other permitted flavours. They sought clarification on whether this product should be classified under Tariff Heading 1704, as specified in Serial number 32AA of Schedule III of Notification No. 01/2017, as a ‘Sugar boiled confectionery’.

The two-member bench of K. Ravi Sankar and RV Pradhamesh Bhanu noted that Heading 1704 covered a wide range of sugar preparations that were typically sold in solid or semi-solid forms and were intended for immediate consumption. These products were collectively referred to as sweetmeats, confectionery, or candies, as per the Central Board of Excise and Customs (C.B.E & C) FAQs issued on 29-09-2-17. On the other hand, 'Sugar boiled confectionery' was a product made from sugar and water, boiled at a temperature, that removed practically all water, resulting in a vitreous mass. Such products were typically purchased and consumed by end-users.

In the present scenario, the bench held that the product in question, known as ‘N.B.S. Crackle’, was exclusively sold to ice cream manufacturers. According to the applicant's submissions, these products were not intended for direct consumption by end-users but were utilized in the ice cream manufacturing process, specifically as toppings.

Therefore, the bench concluded that the product, which served as an industrial input for ice cream production, cannot be classified under the category of ‘Sugar boiled confectionery’.