2019 (10) TMI 796 - AAR - GST

AAR rejects FANTA FRUITY ORANGE classification application due to identical Gujarat AAR application already decided

The Karnataka AAR rejected an application seeking classification of FANTA FRUITY ORANGE under GST schedules, determining whether it falls under Chapter ... Advance Ruling application - Application not to be admitted where identical question is pending or decided - Rejection of application under Section 98(2) proviso - Admissibility of advance rulingAdvance Ruling application - Application not to be admitted where identical question is pending or decided - Rejection of application under Section 98(2) proviso - Whether the advance ruling application should be admitted or must be rejected because the same question had already been the subject-matter of an earlier advance ruling application before another Authority. - HELD THAT: - The Authority examined the application and the records and noted that the applicant had earlier filed an application before the Gujarat Authority for Advance Ruling on the identical question concerning classification of the product 'Fanta Fruity Orange'. Section 98(2) and its proviso bar admission of an application where the question raised is already pending or decided in any proceedings in the case of the applicant under the Act. Having found that the same question had already been decided by the Gujarat Authority for Advance Ruling, the Authority concluded that the present application could not be admitted and therefore had to be rejected. The Authority recorded that an opportunity of hearing would be required before rejection as contemplated by the provisos, and proceeded to reject the application for the specified reason. [Paras 8, 9]Application rejected as not admissible under the proviso to Section 98(2) because the identical question had already been decided by the Gujarat Authority for Advance Ruling.Final Conclusion: The Advance Ruling Authority rejected the applicant's application for advance ruling on admissibility grounds under Section 98(2) since the identical question had previously been decided by the Gujarat Authority for Advance Ruling. Issues Involved:1. Classification of 'FANTA FRUITY ORANGE' under the appropriate Chapter Heading and Schedule of the GST Tariff.Detailed Analysis:Issue 1: Classification of 'FANTA FRUITY ORANGE'The applicant, a private limited company registered under the GST Act, sought an advance ruling on whether 'FANTA FRUITY ORANGE' should be classified under:- Chapter Heading 2202 99 20 at Sl.No. 48 under Schedule II as 'Fruit pulp or fruit juice based drinks',- Chapter 2202 99 90 at Sl.No. 24A under Schedule III as 'Other Non-alcoholic beverages', or- Chapter 2202 10 at Sl.No.12 under Schedule IV as 'All goods (including aerated waters), containing added sugar or other sweetening matter or flavoured'.Applicant’s Submission:1. Product Composition and Manufacturing Process:- The product contains 10.5% Orange Juice, sugar, acidity regulators, preservatives, stabilizers, synthetic food colors, carbon dioxide, and sweeteners.- The manufacturing process involves mixing orange juice concentrate with water, sugar syrup, and other additives, followed by carbonation and packaging.2. Classification Argument:- The applicant argues that the product should be classified under Tariff Item No. 2202 99 20 as 'Fruit pulp or fruit juice based drinks' because the orange juice constitutes 10.5% of the total beverage and imparts the essential character to the drink.- They assert that the carbonation is only for preservation purposes and not to classify it under aerated waters.3. Supporting References:- The applicant references various dictionaries and technical literature to define 'base' and 'flavour', emphasizing that the orange juice is the main ingredient giving the drink its essential character.- They also cite the US Customs Ruling No. N 122815, which distinguishes between fruit juice-based drinks and flavoured waters based on the dominant ingredient.4. Legal Precedents:- The applicant references the Tribunal’s decision in CCE, Bhopal v. Parle Agro Pvt. Ltd., where a similar product 'Appy Fizz' was classified under Tariff Item 2202 90 20 despite being aerated.Authority’s Findings:1. Pending Application in Gujarat:- The applicant had already filed an application for advance ruling on the same issue before the Gujarat Authority for Advance Ruling, which culminated in a ruling (GUJ/GAAR/R/07/2019 dated 30.03.2019).2. Legal Provisions:- Section 98(2) of the CGST Act, 2017, states that the Authority shall not admit an application where the question raised is already pending or decided in any proceedings in the case of an applicant under any provisions of the Act.Ruling:- The application filed by the applicant is rejected because the question raised has already been decided by the Gujarat Authority for Advance Ruling.