Appellate authority upholds product classification as "Carbonated Beverages with Fruit Juice" under specific tariff headings.

The appellate authority upheld the lower authority's classification of the appellant's products under CTH 22021020 and 22021090 as "Carbonated Beverages with Fruit Juice," rejecting the appeal. The products were not classified as "Fruit Juice Based Drinks" under CTH 22029920. The appeal was disposed of accordingly.

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Issues Involved:
1. Classification of carbonated fruit juices under GST.
2. Applicability of FSSAI regulations and food categorization.
3. Interpretation of Customs Tariff Headings (CTH) 2202 and 2009.
4. Common parlance test and industry practice.
5. Fitment Committee recommendations and GST rates.

Detailed Analysis:

1. Classification of Carbonated Fruit Juices under GST:
The appellant, a manufacturer of fruit juices and carbonated fruit juices, sought a ruling on whether carbonated fruit juices fall under "Fruit Juices" or "Aerated Drinks." The original authority classified the products under CTH 22021020 and 22021090, which was contested by the appellant. The appellant argued that their products should be classified under Tariff Item 22029920 as "Fruit Juice Based Drinks," relying on FSSAI regulations and Supreme Court judgments.

2. Applicability of FSSAI Regulations and Food Categorization:
The lower authority considered FSSAI Regulations, specifically Regulation 2.3.30, which distinguishes between "Carbonated Fruit Beverages or Fruit Drinks" and "Carbonated Beverages with Fruit Juice." The appellant's products, with 2.5% lime juice and 5% orange juice, fall under "Carbonated Beverages with Fruit Juice" as per Para 3A of Regulation 2.3.30. The lower authority also referred to food category 14.1.4.1, which includes "Carbonated water-based flavoured drinks," concluding that the products are classifiable under CTH 22021020 or 22021090.

3. Interpretation of Customs Tariff Headings (CTH) 2202 and 2009:
The Customs Tariff Heading 2202 includes non-alcoholic beverages, excluding fruit or vegetable juices of Heading 2009. The appellant accepted that their products are not classifiable under CTH 2009 but argued that they should fall under CTH 22029920 as "Fruit Juice Based Drinks." The lower authority, however, classified the products under CTH 220210, which covers aerated waters containing added sugar or other sweetening matter or flavoured.

4. Common Parlance Test and Industry Practice:
The appellant contended that their products are marketed and understood by consumers as "Fruit Juice Based Drinks," not merely flavoured waters. They cited industry practices where similar products are classified under CTH 22029920. However, the lower authority's classification was supported by the larger bench decision in the case of Brindavan Beverages Pvt Ltd, which stated that beverages with less than 5% lime or lemon juice content classify as lemonade.

5. Fitment Committee Recommendations and GST Rates:
The Fitment Committee's recommendations, discussed in the GST Council meeting, indicated no change in the prevailing GST rates for carbonated beverages with fruit juice, maintaining a 28% GST rate plus cess. This supported the lower authority's classification under CTH 220210.

Conclusion:
The appellate authority upheld the lower authority's classification of the appellant's products under CTH 22021020 and 22021090, rejecting the appeal. The products were found to be "Carbonated Beverages with Fruit Juice" and not "Fruit Juice Based Drinks" under CTH 22029920. The appeal was disposed of accordingly.

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