TaxTMI 
TaxTMI 
2021 (2) TMI 822
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....terials placed on record and upon suggestion of the Court, the parties have consented to the following order being passed :- a) The Customs Excise and Service Tax Appellate Tribunal (CESTAT) is directed to decide the main appeal bearing Customs Appeal No. 75195 of 2020 within a period of three weeks from date. b) The petitioner shall be at liberty to pursue its remedy before the Customs Excise and Service Tax Appellate Tribunal (CESTAT) against the order passed by the Principal Commissioner of Customs dated December 07, 2020 as well as the order dated December 15, 2020 passed by the Deputy Commissioner of Customs before the Appellate Authority." 2. Accordingly, the matter was heard on a priority basis on 18 January 2021 for final disposal. 3. The issue which falls for consideration in this appeal is whether the goods imported by the respondent, such as, Big Cola, Big Orange Cola, Big Lemon etc., which they described as "carbonated beverage with fruit juice" are classifiable under Customs Tariff Heading 22021090 and 22021020 as claimed by the Revenue or are classifiable under 22029920 as claimed by the respondent/importer. 4. ....
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....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". 5. From the above explanation to the notification, it is clear that there is no separate classification of goods for the purpose of IGST and the classification of the goods under the Customs Tariff holds good for IGST as well. The Customs Tariff Act, 1975 provides for Rules of interpretation which aid in classifying the goods and these Rules also apply to IGST. If the imported goods are classified under Customs tariff Heading 220210 as "all goods (including aerated waters), containing added sugar or other sweetening matter or flavoured", IGST @ 28 per cent is to be levied on the imported goods. On the other hand, if they are classified under Customs Tariff Heading 22029920 as "fruit pulp or fruit juice based drinks", IGST @ 12 per cent is to be levied. On a specific query by the Bench, the learned Counsel for the respondent explained that t....
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................. 1 30% 2202 99 --- Other : 1 30% 2202 99 10 --- Soya milk drinks, whether or not sweetened or flavoured 1 30% 2202 99 20 --- Fruit pulp or fruit juice based drinks 1 30% 2202 99 30 --- Beverages containing milk ................. 1 30% 2202 99 90 --- Other ............................................ 1 30% 7. Learned Assistant Commissioner held that the primary quality of the imported product is a beverage with overwhelming constituent being carbonated water with an extremely small percentage of fruit juice between 2.5% and 5% and therefore the HSN Code 22029020 under which the assessee claimed the classification is not correct. This tariff entry pertains to fruit pulp or fruit juice based drinks. As the defining character of the products is carbonated beverages and the fruit juice is a secondary character, they need to be classified under Customs Tariff Heading 22021020 in case of Lime based drinks and 22021090 in case of others. Being Aggrieved by this order, the i....
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....al parlance test has rightly been applied by the High Court. Under the common parlance even if the product contained more than 10% fruit concentrate it is a soft drink as commonly known and tax liability @ 20% has rightly been imposed. 16. Learned counsel for the parties have placed reliance on various cases which shall be referred to while considering the submissions in detail". (c) the Larger Bench of the CESTAT in the case of Brindavan Beverages Pvt. Ltd. versus Commissioner of Customs, Central Excise & Service Tax, Meerut [2019 (29) G.S.T.L. 418 (Tri. - LB)] also held that Nimbu Masala Soda and Nimbooz are classifiable under 22029020 as the fruit juice content of Lime in Nimbooz is not less than 5% and the total soluble solid is also not less than 10% as required under FSSAI Regulations ; (d) The FSSAI Regulations 2.3.30 pertaining to carbonated beverages or fruit drinks was amended w.e.f. 25/10/2016 whereby Clause 3A has been inserted providing for beverages containing more than 5% of fruit juice (2.5% for lime) but less than 10% (5% for Lime) would also fall under Regulation 2.3.30 as "carbonated beverages with fruit juice". 8. ....
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...., the Revenue prays to set aside the order of the learned Commissioner (Appeals) and classify the imported products namely Big Cola, Big Kids Orange and Big Kids Apple under 22021090 and Big Kids Lime, Big Lemon under 22021020. Learned Authorized Representative for the Department vehemently asserted the above arguments. 10. Rebutting the above arguments, learned Counsel for the respondent submits as follows: (1) the onus of proving that the classification adopted by the importer is incorrect, rests on the Department and the Department has not discharged this burden through any positive evidence, test report, market enquiry, by expert evidence, common parlance test, etc. to prove that the subject goods are recognised as aerated water in the market ; (2) up to 20 April 2020, the same goods were being allowed clearance by the Department under Tariff item 22099920 and it has been the long standing practice which should not be changed unless there is adequate evidence to change it ; (3) the Tariff Heading 220910 under which the Revenue seeks to classify their products, covers only beverages which are prepared with flavours. The....
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....usion he prays that the appeal may be dismissed. 12. We have heard both sides through video conferencing & have gone through the records of the case and considered the submissions made by both sides. We have also examined the labels produced before us by the learned Counsel of the respondent and the test reports. There is no dispute regarding the facts of the case. The goods are sold as "carbonated beverage with fruit juice'. In the case of lime, the fruit juice content is 2.5% whereas in the case of other fruit, such as, apple the content is 5%. There are also products named Big Orange which has orange flavour but contains 5% apple juice and no orange juice but has only pictures of cut orange. Similarly, Big Kids Jeera does not appear to have any Jeera but only apple juice. To that extent, the representation on the labels appears to be inaccurate but this does not affect the classification of the products since there is no dispute that all these are "carbonated beverages with fruit juice'. The products in question are not fruit or vegetable juices themselves which would be classifiable under Heading 2009. It is also not in dispute that the Customs Tariff is relevant for d....
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....git headings which are further divided into six digit and still further divided into eight digit tariff headings. 14. Further, in the Customs Tariff, groups of articles are prefixed by a Single dash (-) or Double Dash (--) or triple dash (---). Wherever there is a single dash, it is to be read as a sub-classification of the article or group of articles covered by the heading preceding it. Similarly, a double dash is to be taken as a sub-classification of the goods covered by a single dash preceding it. A triple dash is a further sub-classification of the goods covered by a double dash preceding it. 15. In this appeal, it is not in dispute that the goods in dispute fall under Tariff item 2202. Under this heading there are two groups of products with a single dash (-) the first one is numbered 220210 which covers "Waters including mineral waters and aerated waters containing added sugar or other sweetening matters or flavoured" and the second one is for "other" which is not numbered but the further divisions under this single dash are numbered.According to the Revenue, the goods fall under the first Single Dash and according to the Respondent Assessee, under t....
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....lative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions: 2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished articles has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3. 3. When by application of rule 2(b) or for any other reason, goods are, prima....
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....allest component of the drink is usually the coffee powder which imparts the drink its essential character and the predominant hot water is irrelevant. Nimbu pani has lime juice, water and sugar of which the lime juice, the smallest component defines the drink. 22. Ice-cream is neither predominantly ice nor cream nor sugar. It is predominantly (at least 50%) air.Water-melon is 99% water. Human body is also predominantly comprised of water. All matter in the universe, with the exception of that in black holes, is mainly space because the nucleus (with its protons and neutrons) is but a very small part of the atom and a few electrons are revolving around it and rest of the atom between the outer edge of atom and the nucleus is just space. Any tablet marked 5mg actually weighs several times more as 5 mg is only the active ingredient and the rest is filler material like talc, glue, etc. Yet, the tablet cannot be classified as product of talc.Thus, predominance of a component may not matter at all in many cases. 23. In other cases, the predominant ingredient characterises the product and the smaller ingredient only imparts to it some special characteristics or fe....
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....hey shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. Since Customs tariff heading 22029920 comes last in the order, it prevails and the goods are classifiable under this heading. 26. We find that the Hon'ble Supreme Court in the case of Parle Agro (supra) examined the classification of appy fizz which was a drink containing apple juice as well as carbonated water and held that the product is correctly classifiable under 22029920. While deciding the matter, the Hon'ble Apex Court has referred to the Regulation 2.3.30 of FSSAI too, inter-alia, found that the product appy fizz met with the conditions in Clause 2 of this Regulation. Revenue's argument is that the appy fizz contained 10% of the apple juice whereas the present products contained only 5% fruit juice (2.5% in the case of lime). It is true that in view of this difference in the composition these goods do not fall under Clause 2 of FSSAI Regulation 2.3.30 but they do fall under Clause 3A. Identical view has been taken by the Larger Bench of the Tribunal in the case of Brindavan Beverages (supra). 27. Revenue ....