Fruit drink classification: a ready-to-serve diluted beverage falls under Heading 22.02, and revised classification can be justified.

A diluted or reconstituted fruit-based drink marketed for direct consumption is classifiable as a ready-to-serve non-alcoholic beverage under Heading 22.02, not as fruit juice under Heading 20.01, where it no longer retains the character of fruit juice of normal composition. The tariff scheme, HSN Explanatory Notes, and food-control standards support classification by the product's substantive character rather than its fruit origin. An earlier classification view may be departed from and the matter revisited when later analytical material and relevant standards provide cogent reasons and the prior record was incomplete.

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Issues: (i) Whether the fruit drink marketed as a ready-to-serve beverage was classifiable under Heading 20.01 as fruit juice or under Heading 22.02 as a non-alcoholic beverage; (ii) Whether the department was justified in departing from the earlier classification view and re-opening the matter.

Issue (i): Whether the fruit drink marketed as a ready-to-serve beverage was classifiable under Heading 20.01 as fruit juice or under Heading 22.02 as a non-alcoholic beverage.

Analysis: The product was manufactured from pulp or juice concentrate with added water, sugar, additives and preservatives, and was marketed in a form meant for direct consumption. The relevant tariff scheme distinguished fruit juices of Heading 20.01 from other non-alcoholic beverages under Heading 22.02, and the HSN Explanatory Notes indicated that diluted or reconstituted products having the character of beverages fall under Heading 22.02. The product did not retain the character of fruit juice of normal composition and, in substance, answered the description of a ready-to-serve fruit beverage. The Food Adulteration and Fruit Products standards also supported that it was a fruit drink rather than fruit juice.

Conclusion: The classification under sub-heading 2202.90 was and the assessee's claim under sub-heading 2001.10 failed.

Issue (ii): Whether the department was justified in departing from the earlier classification view and re-opening the matter.

Analysis: The earlier classification was not conclusive for all time. The record showed that subsequent materials, including the analytical report and the relevant food-control standards, had not been considered earlier, and the authorities followed the proper procedure while revisiting the classification. The change was supported by cogent reasons and was not barred merely because a prior view had been taken on a different and incomplete record.

Conclusion: The re-classification and re-opening were justified.

Final Conclusion: The product was held to be a ready-to-serve non-alcoholic beverage under Heading 22.02, and the challenge to the revised classification did not succeed.

Ratio Decidendi: A diluted or reconstituted fruit-based drink that has the character of a ready-to-serve beverage, rather than fruit juice of normal composition, is classifiable under Heading 22.02 and not under Heading 20.01; an earlier classification may be departed from when supported by cogent reasons and relevant material.

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