TaxTMI 
TaxTMI 
2019 (8) TMI 1219
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....sting 10.5% fruit juice content, Carbonated Water, Sugar, Acidity Regulators, Preservatives, Stabilizers, Sweeteners, and Synthetic Food Colour. The manufacturing process starts with procurement of Orange juice concentrate from approved vendor and stored in -18 C cold storage which forms the base of product. This juice concentrate is then blended with sugar syrup which is prepared by mixing granulated sugar with treated water, additives and preservatives to form the beverage. Thereafter, this beverage is carbonated before being filled in bottles. It submitted the details of the ingredients used for the manufacture of "FANTA FRUITY ORANGE" and the process involved for manufacturing of the said product 3. The applicant has raised the following question for advance ruling - Whether "FANTA FRUITY ORANGE" product is classifiable under CH 22029920 at Sl. No. 48 under Schedule - II as "Fruit pulp or fruit juice based drinks", or under CH 22029990 at Sl. No. 24A under Schedule - III as "Other non-alcoholic beverages" or under 220210 at Sl. No. 12 under Schedule IV as "All goods [including aerated waters], containing added sugar or other sweetening matter or flavoured" under Notificat....
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....o. 1/2017- State Tax (Rate) dated 30.06.2017(as amended) which has been issued under Section 9(1) of the CGST Act and GGST Act respectively. The classification and the applicable rate of GST on products supplied are determined under the said Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 read with Notification No. 1/2017- State Tax (Rate) dated 30.06.2017(as amended). The items manufactured and supplied under Chapter 2202 which are covered under the said Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and Notification No. 1/2017- State Tax (Rate) dated 30.06.2017(as amended), are specified under Schedule - II, III and IV, are as follows: Schedule - II - 6% 47. 2202 90 10 Soya milk drinks 48. 2202 90 20 Fruit pulp or fruit juice based drinks 49. 2202 90 90 Tender coconut water put up in unit container and bearing a registered brand name 50 2202 90 30 Beverages containing milk Schedule - III - 9% 24A. 2202 99 90 Other non-alcoholic beverages [other than tender coconut water] Schedule - IV - 14% 12. 2202 10 &n....
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.... (1) The base of something is its lowest edge or part. ... (11) The base of a substance such as paint or food is the main ingredient of it, to which other substances can be added" It is submitted that 'The Compact Edition of the Oxford English Dictionary, 1987, Oxford University Press explains 'base' to mean "...II. The main or the most important element or ingredient, looked upon as its fundamental part." Thus, a substance or ingredient of a food item can be called its base when such substance/ ingredient forms the main or fundamental ingredient, and imparts the essential attribute to the food item. 4.8 It is submitted that the product in question is prepared with orange juice as its base, which is added to the syrupy liquid consisting of water, sugar and other constituents. The percentage of orange juice is 10.5% of the total beverage. It is the active ingredient of the product in question, and imparts the basic attribute to the drink, including its taste and characteristics. Therefore, the product in question will be an 'orange juice based drink', qualifying as "fruit juice based drink" under the tariff item 2202 99 20. 4.9 In support of the abo....
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....ub-heading 2202 10. However, a closer examination of the scheme of classification under heading 2202 would reveal that such an interpretation is not what is contemplated in heading 2202 and that flavoured water is not the same as a fruit juice based drink. As already stated above, fruit juice based drink is specifically classified under tariff item 2202 99 20. 4.12 Further, it is submitted that the above interpretation is in consonance with the scheme of classification as envisaged under heading 2202. The distinction drawn above between 'fruit pulp or fruit juice based drinks' and mere 'flavoured beverages' is evident from the scheme of heading 2202. If this distinction is ignored, it would render the specific tariff item 2202 99 20 redundant and otiose. Although sub-heading 2202 99 is provided as a residuary entry, it has to be examined in the broader scheme of heading 2202. If tariff item 2202 10 90 is treated to include an orange juice based drink, it would mean that any fruit juice based drink would be susceptible to classification under tariff items 2202 10 90, as being flavoured water, irrespective of the composition, nature and common understanding of the market regarding....
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....above decision of the Hon'ble Tribunal was affirmed by the Hon'ble Supreme Court by dismissing the civil appeal filed by the Department, as reported in 2010 (254) ELT A13 (SC) = 2009 (7) TMI 1229 - SC ORDER. The applicant further relied upon the decision in the case of Godrej Foods Ltd. v. CCE, Indore, 2000 (121) ELT 231 (Tri.) = 2000 (8) TMI 321 - CEGAT, NEW DELHI 4.15 The applicant has submitted that as per the General Rules for Interpretation also, the product in question would be classifiable under Tariff Item 2202 99 20. 4.16 It is submitted that as per the common parlance test also, the product in question would be classifiable under Tariff item 2202 99 20. 5. The applicant submitted additional written submission on 14.02.2018 along with copy of Test Report dated 08.02.2018, Affidavit of Shri K. Sivraman Nair, Associate Vice President, Quality Assurance & Product Integrity of the Company, Certificates issued by Dr. Lombert Rodrigues and Laxminarayan Institute of Technology. 6.1 The Goods and Services Tax, Vadodara - I Commissionerate vide letter F.No. IV/16-34/GST/AAR-HINDUSTAN/T/17 dated 15.02.2018, inter-alia submitted that the product is stated to contain 10.5%....
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....applicant in their application for advance ruling as well as submissions made at the time of personal hearing. We have also considered the views of the Goods & Services Tax Commissionerate, Vadodara - I. 8. We find that the main issue involved in this case is regarding classification of the product 'Fanta Fruity Orange' being manufactured and supplied by the applicant. 9. It is observed that the Explanation (iii) and (iv) of the Notification No. 1/2017Central Tax (Rate) dated 28.06.2017 provides as follows :- "Explanation. - For the purposes of this notification, - (i) ...... (ii) ...... (iii) "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification." 10. The tariff heading 2202 of the Customs Tariff, which deal....
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....nt Coca Cola Beverages P. Ltd. Vs. Commissioner of Central Excise, Chennai - IV = 2017 (3) TMI 1410 - CESTAT CHENNAI, wherein Hon'ble CESTAT observed as follows :- "8. The appellant failed to show purchase of fruit pulp or fruit juice to use the same in the manufacture of drinks. There is a finding by the learned adjudicating authority in para 4.9 of his order that the master mixture used contained authentic aseptic orange juice concentrate and authentic aseptic pineapple concentrate. So also there was orange fruit juice and pineapple fruit juice used in the manufacture of the drinks. 9. Now the question arises is when the imported authentic aseptic concentrate of both kinds were used in the manufacture of the drink and the Tariff Heading 2202.40 requires that the aerated water made out of fruit pulp or fruit juice shall only subscribe to that class, the appellant is entitled to classify its goods under that Tariff Heading. The case of the appellant being admittedly manufacture of the aerated water, (soft drink) with the basis of the concentrates imported and without demonstrating that the base was fruit pulp or fruit juice, it is bound to be classified under the ....
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....ms Tariff Act, 1975. Therefore, the said judgement is not squarely applicable in the facts of the present case. Also, Supreme Court has in case of Dilipkumar & Co. = 2018 (7) TMI 1826 - SUPREME COURT had laid a principle that exemption notifications should be interpreted strictly. 12. The applicant has submitted an affidavit of Shri Rajesh Nair, Associate Vice President - Quality Assurance & Product Integrity, wherein it has been affirmed that during the process of manufacture of Fanta Fruity Orange, Carbon Dioxide equal to 5.148 Grams per Liter (which constitutes 0.5148% of the total beverage) is added; that Carbon dioxide is added to the beverage as a preservative only and not for any other purpose. Therefore, the product 'Fanta Fruity Orange' would not fall under Tariff Sub Heading 2202 10 - 'All goods including aerated waters containing added sugar or other sweetening matter or flavoured'. 13. In view of the foregoing discussion, it is apparent that the product 'Fanta Fruity Orange' would not fall under Tariff Sub Heading 2202 10, but it would fall under Tariff Sub Heading 2202 99. Further, it has already been discussed that the said product is not a 'Fruit pul....