TaxTMI 
TaxTMI 
2019 (7) TMI 1607
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.... 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 has 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 appellant filed an application for Advance Ruling before the Gujarat Authority for Advance Ruling (hereinafter referred to as the "GAAR") and sought ruling on following questions - 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....
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....roduct "Fanta Fruity Orange" manufactured and supplied by M/s. Hindustan Coca-Cola Beverages Private Limited (GSTIN 24AAACH3005M1ZX) is classifiable under Tariff Item 2202 99 90 and Goods and Service Tax rate of 18% (CGST 9% + GGST 9% or IGST 18%) is applicable to the said product as per Sl. No. 24A of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended, issued under the CGST Act, 2017 and Notification No. 1/2017-State Tax (Rate) dated 30.06.2017, as amended, issued under the GGST Act, 2017 or IGST Act, 2017. 6. Aggrieved by the aforesaid Advance Ruling, the appellant has filed the present appeal. 7.1 The appellant has submitted that the GAAR has failed to appreciate scope of Chapter Heading 2202 and mis-classified "Fanta Fruity Orange" under the residuary entry. It has been submitted that "Fruit pulp or fruit juice based drinks" are specifically covered under Tariff Item No. 2202 99 20 under the sub-heading No. 2202 99 as "other non-alcoholic beverages". It has been further submitted that the intention of the Legislature is to include those beverages under Tariff Item No. 2202 90 20, wherein the fruit imparts the essential character of the bev....
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....tracts CGST of 6%. 7.6 As regards the conclusion of the GAAR that Tariff Item 2202 99 20 will not cover drinks made from fruit juice concentrates, the appellant has submitted that as long as beverages are "based" on fruit juices and such fruit juices impart the essential character to the beverage, they will continue to fall under Tariff Item No. 2202 99 20 as a "fruit pulp or fruit juice based drink", even though they are produced from fruit juice concentrates. The appellant submitted that frozen Orange juice is specifically classified under Tariff Item No. 2009 11 00 which includes Orange juice concentrate within its ambit. Therefore, "fruit juice based drinks" under Tariff Item No. 2202 90 20 will also include "fruit juice concentrates based drinks" within its ambit. The appellant also referred to Explanatory Notes to the Harmonized Commodity Description and Coding system of Chapter Heading 20.09. 7.7 The appellant has further submitted that in classification disputes, a specific entry is to be preferred over a general entry. Therefore, when the Customs Tariff Act, 1975 provides for a specific Tariff Entry No. 2202 99 20 for "fruit pulp and fruit juice based drinks", there is n....
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....ted waters], containing added sugar or other sweetening matter or flavoured", or under Tariff Item 2202 99 20 at S. No. 48 under Schedule II as "Fruit pulp or fruit juice based drinks" or under Tariff Item No. 2202 99 90 at S. No. 24A under Schedule III as "Other non-alcoholic beverages". 10.1 The appellant has submitted that the manufacturing process starts with procurement of Orange juice concentrate from the vendor and the same is stored in -20oto -16oCelsius cold storage. Orange juice (which constitutes 10.5% of the total beverage) is then obtained by adding water to the Orange juice concentrate. Thereafter, sugar syrup (which is prepared by mixing granulated sugar with treated water), along with flavor, additives and preservatives is blended with Orange juice base to obtain the final mixture. This mixture is then carbonated, before being filled in PET bottles. It is submitted that Orange juice concentrate is produced from real orange juice after extraction of water and is easier to transport. It is for this reason i.e. to facilitate ease of transportation that the appellant procures Orange juice concentrate instead of orange juice for manufacturing "Fanta Fruity Orange". 10.....
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....o two sub-headings, viz. sub-heading 2202 10 which covers "waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured", and sub-heading 2202 90 which covers "other". The Tariff Heading 2202 in the Customs Tariff Act, 1975 is reproduced herein below :- Tariff Item Description of goods Unit (1) (2) (3) 2202 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured, and other non-alcoholic beverages, not including fruit or vegetable juices of Heading 2009 2202 10 - Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured: 2202 10 10 --- Aerated Waters 1 2202 10 20 --- Lemonade 1 2202 10 90 --- Other 1 - Other : 2202 91 00 -- Non-alcoholic beer 2202 99 -- Other: 2202 99 10 --- Soya milk drinks, whether or not sweetened or flavoured 1 2202 99 20 --- Fruit pulp or fruit juice based drinks 1 2202 99 30 --- Beverages containing milk 1 2202 99 90 --- Other 1 It is apparent t....
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....s which are predominantly made up of water, including mineral water and aerated water and are either sweetened or flavoured or both. It is submitted by them that Tariff sub-heading 2202 99 covers other non-alcoholic beverages and the drinks covered under this subheading would be imparted their essential character by another substance. 14.2 As already noted, as per the contents of "Fanta Fruity Orange", the said product is sweetened (with Sugar and Sweetener) and flavoured (with Orange Juice Concentrate and added Orange flavours -natural and nature-identical flavouring substances). The same is also aerated as well as presented in PET bottles. As per explanatory notes referred to above, the Sub-heading 2202 10 covers products flavoured with fruit juices or essences or compound extracts. Thus, "Fanta Fruity Orange" flavoured with Orange Juice Concentrate and added Orange flavours would fall under sub-heading 2202 10 in view of the explanatory notes of HSN. 15.1 The GAAR in its Advance Ruling has referred to the affidavit filed by Shri Rajesh Nair, Associate Vice President - Quality Assurance & Product Integrity, wherein it is stated that during the process of manufacture of "Fanta F....
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....estaurant (P) Ltd. [2012 (286) E.L.T. 321 (S.C.) - para 43] = 2012 (12) TMI 149 - SUPREME COURT has held that "it is a settled principle in excise classification that the definition of one statute having a different object, purpose and scheme cannot be applied mechanically to another statute". The same view was held by Hon'ble High Court of Bombay in the case of Kaira Dist. Co. Op. Milk Producers" Union Ltd. Vs. U.O.I. [1989 (41) E.L.T. 186 (Bom.) - Para 7 and 8] = 1988 (4) TMI 81 - HIGH COURT OF JUDICATURE AT BOMBAY. 17.3 As regards the reliance on the judgement of Hon'ble Supreme Court in the case of Parle Agro (P) Ltd. Vs. Commissioner of Commercial Taxes, Trivandrum [2017 (352) E.L.T. 113 (S.C.)] = 2017 (5) TMI 592 - SUPREME COURT, we agree with the view of the GAAR that the issue involved in that case was related to the classification under Kerala Value Added Tax Act, 2003 wherein the scheme of classification was different than the classification under Customs Tariff Act, 1975. As regards the decision of Hon'ble CESTAT in the case of CCE, Bhopal Vs. Parle Agro Pvt. Ltd. [2008 (226) ELT 194 (Tri.)] =2008 (3) TMI 67 - CESTAT NEW DELHI, it is observed that in that case, the pro....
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....arrived at the conclusion that "concentrate" based drink will not be covered under "Fruit pulp or fruit juice" based drink by taking all relevant aspects into consideration and had not drawn any support from the Board's Circular dated 21.03.1997. 19.1 The appellant has referred to Explanatory Notes of Heading 20.09, wherein it is mentioned that the term "frozen orange juice" also covers concentrated orange juice" to buttress the argument that "fruit juice based drinks" under Tariff Item 2202 99 20 will also include "fruit juice concentrates based drinks" within its ambit. 19.2 In the said Explanatory Notes, it is mentioned that the juices of this heading may be concentrated (whether or not frozen) or in the form of crystals or powder. Thus, this clarification is applicable to the Heading 20.09 only and cannot be applied to other Headings. Similarly, the sub-heading note for sub-heading 2009.11 providing that the term "frozen orange juice" also covers concentrated orange juice" will be applicable to that sub-heading only. These explanatory notes only reiterate the fact that the "concentrated juices" are known differently from "juices" and therefore the explanatory notes clarify th....