Appellate Tribunal upholds classification of Ready to Serve Beverages under Central Excise Tariff Act

The Appellate Tribunal CEGAT upheld the classification of Ready to Serve Beverages (RTS) under sub-heading No. 2202.90 of the Central Excise Tariff Act, rejecting the appellants' challenge seeking classification under sub-heading No. 2001.20. The Tribunal emphasized the appellants' prior acceptance of the classification proposed in the show cause notice and distinguished the RTS beverages from fruit pulp-based drinks like Maaza. Ultimately, the Tribunal found no merit in the appeal, affirming the Collector's classification and dismissing the appeal.

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Issues:
Classification of Ready to Serve Beverages (RTS) under sub-heading No. 2001.20 of the CETA vs. sub-heading No. 2202.90 as per the Asstt. Collector's order. Appellants' acceptance of classification under sub-heading No. 2202.90. Challenge based on CBEC Circular No. 16/5/87-CX. I regarding fruit pulp-based drinks.

Analysis:

The appeal before the Appellate Tribunal CEGAT, New Delhi involved the classification of Ready to Serve Beverages (RTS) by M/s. Maharashtra Agro-Industries Development Corporation Ltd. The appellants sought classification under sub-heading No. 2001.20 of the Central Excise Tariff Act (CETA), while the Asstt. Collector classified the RTS beverages under sub-heading No. 2202.90, considering them as non-alcoholic beverages containing added sugar or sweetening matter. The Collector, C. Ex. (Appeals), Bombay affirmed this classification based on the manufacturing process involving fruit juices, water, sweetening, flavoring, and citric acid.

In response to the appellants' prayer for a decision on merits, the Revenue argued that the appellants had previously accepted the classification proposed in the show cause notice, citing the Tribunal's decision in Krishna District Milk Producers Union v. CCE. The Tribunal in that case had classified fruit drinks diluted with water as beverages under Tariff Heading No. 22.02 of CETA, 1985. The appellants referred to their product as "RTS beverages" and had accepted the classification under sub-heading No. 2202.90 in their submissions.

The Tribunal, comprising S/Shri Lajja Ram and S.S. Kang, analyzed the matter, noting the appellants' acceptance of the classification in the show cause notice and their reference to the product as "RTS beverages." The appellants' sole ground for appeal was the CBEC Circular suggesting the classification of fruit pulp-based drinks under a different heading. However, the Tribunal found that the product in question was not fruit pulp-based like Maaza, as it was manufactured differently. Referring to the Krishna District Milk Producers Union case, the Tribunal distinguished between fruit drinks like Maaza and RTS Beverages, concluding that the latter did not resemble Maaza.

After considering all relevant facts and arguments, the Tribunal upheld the Collector's classification under sub-heading No. 2202.90, rejecting the appeal for lack of merit. The Tribunal found no reason to interfere with the lower authority's decision and dismissed the appeal accordingly.

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