Application for Advance Ruling on Flavoured Milk Classification Rejected

The Authority rejected the application for an advance ruling on the classification of flavoured milk under the Customs Tariff Act, 1975, as the Revenue was already investigating the mis-classification issue. The applicant's plea was not admitted due to the ongoing investigation, leading to the rejection of the application by the Authority.

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Issues:
Classification of the product "Flavoured Milk" under the Customs Tariff Act, 1975.

Analysis:
The application was filed under the Central Goods & Services Tax Act and Andhra Pradesh Goods & Services Tax Act by a company primarily engaged in processing and marketing dairy products, including flavoured milk. The applicant sought clarification on the appropriate chapter under the Customs Tariff Act for classifying flavoured milk. The National Dairy Research Institute confirmed that flavoured milk falls under dairy produce. The applicant argued that flavoured milk should be classified under chapter 4, heading 04029990, with a 5% tariff rate, as it is a milk-based product. The applicant referenced the Gujarat High Court judgment stating that flavoured milk is essentially milk, supporting their classification argument.

The applicant contended that flavoured milk should not be classified under chapter 22, as it deals with beverages containing milk, and flavoured milk does not contain alcohol. The applicant provided a breakdown of the components in flavoured milk, highlighting that milk constitutes 90.96% of the product, supporting the classification under chapter 4. The applicant's representative reiterated these arguments during a personal hearing.

However, the Revenue raised a plea stating that an investigation was initiated against the mis-classification of flavoured milk. The Revenue requested the rejection of the applicant's plea for an advance ruling, citing that the issue was already pending with them. The Authority, considering the proviso to section 98(2) of the CGST Act, decided not to admit the application due to the ongoing investigation by the Revenue on the classification of flavoured milk. Therefore, the application was rejected by the Authority.

In conclusion, the Authority did not admit the application for an advance ruling on the classification of flavoured milk under the Customs Tariff Act, 1975, as the issue was already under investigation by the Revenue.

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