Aerated drinks and fruit pulp beverages classified under Tariff Heading 2202 9020 as fruit juice based drinks

CESTAT Allahabad allowed the appeal regarding classification of aerated drinks and fruit pulp/juice based beverages under different brand names. The tribunal held that products should be classified under Tariff Heading 2202 9020 as fruit pulp or fruit juice based drinks rather than under Chapter Sub-heading 22021020, covering the period April 2011 to August 2012. The decision followed a Larger Bench ruling in a similar case involving beverage manufacturers, which established that products like Minute Maid Nimbu Fresh and 7UP Nimbooz fall under the fruit pulp/juice based drinks category. The classification issue was considered settled law favoring the appellant.

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Issues: Classification of the product "Minute Maid Nimbu Fresh" under Central Excise Tariff Act, 1985.

Detailed Analysis:
1. Background: The Appellant, engaged in manufacturing aerated drinks, faced a Show Cause Notice (SCN) alleging misclassification of the product "Minute Maid Nimbu Fresh" under Chapter Sub-heading 22029020 instead of 22021020.

2. Order-in-Original: The Additional Commissioner confirmed duty demand, penalty, and interest, leading to a dispute over the correct classification of the product.

3. Appeal before Commissioner (Appeals): The main issue revolved around the classification of the product as "Lemonade" or "Fruit pulp or Fruit juice-based drinks," with the Commissioner upholding the duty demand but reducing the penalty.

4. Tribunal's Decision: The Tribunal noted that the issue of classification had been settled in favor of the Appellant in previous orders and a Larger Bench decision, emphasizing that the product falls under Tariff Item 2202 90 20 as a "fruit pulp or fruit juice based drink."

5. Larger Bench Decision: The Larger Bench emphasized that products like "Minute Maid Nimbu Fresh" with specified fruit juice content are classified as fruit juice-based drinks, contrary to the Commissioner (Appeals) reliance on a previous case.

6. Consequential Relief: Following the precedent set by the Larger Bench, the Tribunal allowed the appeal, providing relief to the Appellant and settling the classification issue in their favor.

7. Precedents: The Tribunal's decision aligned with similar cases like M/s Varun Beverages Pvt. Ltd., M/s Aradhana Foods and Juices Pvt. Ltd., and M/s. Pepsico India Holdings Pvt. Ltd., reinforcing the classification of such products under Tariff Item 2202 90 20.

In conclusion, the judgment resolved the classification issue of "Minute Maid Nimbu Fresh" by aligning with the precedent set by the Larger Bench, providing relief to the Appellant and settling the dispute in their favor.

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