TaxTMI 
TaxTMI 
2021 (4) TMI 595
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....trict Cooperative Unions run and manage various dairies for production of milk and milk produces like milk, milk powder, cheese, butter, ghee etc. and also for developing the co-operative sector for such products produced by the District Cooperative Unions, the applicant has been advising and assisting such dairies. 3. The applicant submitted that they are also running and managing a dairy called "Amul Fed", which is located at village Bhat in Gandhinagar District. Various milk products, as aforesaid, are produced by the applicant also in this dairy, namely, Amulfed Dairy. By the very nature of the applicant as a Federation, the applicant is helping and assisting the constituent dairies in policy matters like price fixation, product development, marketing of the products and the like. The applicant at AmulFed Dairy has been producing flavored milk under the trade name of Amul Kool/Amul Kool Café. The applicant submitted that such flavored milk is a product meriting classification under Heading 0402, Sub Heading 04029990 of the GST Tariff. 4. The applicant submitted that the process of the flavored milk is standardization of fresh milk according to the fat contents and ....
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....of these specifications and ingredients, classification of the product under Chapter 4 of the Tariff appears to be appropriate. The details of composition and other relevant information are shown on labels of the product also. 4.3 The applicant submitted that flavored milk is made of milk added with sugar and permitted flavors. The reason for adding sugar and flavors is to improve the shelf life and increase the taste. The essential constituent of the milk have not changed even after adding sugar and permitted flavors and still retains its essential character of milk. The product flavored milk is made from milk added sugar and permitted flavors which do not alter its essential character of milk. If the natural constituents of the milk are replaced with any substance, then flavored milk would not fall under chapter 4, but that is not the case here. Chapter 4 of the Tariff inter-alia covers milk and cream. The word "milk" is statutorily defined under Note 1 to Chapter 4, and according to Note 1, the expression "milk" means full cream milk or partially or completely skimmed milk. Heading Nos. 0401 and 0402 would therefore, cover milk, that is to say, full cream milk or partially or....
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.... being partially or partly skimmed milk and since it contains added sugar also, such partly skimmed milk containing added sugar is most appropriately classifiable under SH No. 0402/04029990 of the Tariff. 4.6 The applicant further submitted that for classifying the product one has to identify the heading in the chapter where the product could fall and then sub-heading and finally tariff item has to be identified. As there is no other specific Tariff heading in GST which coverers milk and milk products, classifying the same in Chapter 4 is prima facie correct. The applicant states that Chapter 4 provides more specific description, and classification of flavored milk in Chapter 4 is more appropriate for the reason stated above. 5. The applicant submitted that the PFA Standards are also relevant for classifying milk under Chapter 4 of the Tariff. It is required to be appreciated that "flavored milk" is also milk containing flavor and flavored milk is specifically covered under Para A. 11.01.05 of the Prevention of Food Adulteration Rules under the category of milk. It is judicially held [1991 (55) ELT 310- Judgment of Punjab & Haryana High Court] and [1998 (97) ELT 402- Judgment....
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.... their representative at the time of Personal hearing. We have also considered the issues involved on which Advance Ruling is sought by the applicant. 11. At the outset, we would like to state that the provisions of both the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the GGST Act. 12. We observe that the applicant is running and managing a dairy called "AmulFed" and various flavoured milk products i.e. "Amul Beverages" viz. Badam, Elaichi, Kesar, Rose, Cold Coffee of different flavours viz. Cinamon, Classic, Hazelnut, Milkshakes of different flavours viz. Badam, Mango, Strawberry, Double Chocolate and Vanilla, Sports Drinks and Smoothies of different flavours viz. Chocolate, Mango and Vanilla are produced by the applicant. 13. The facts of the case is that the process of the flavored milk is standardization of fresh milk according to the fat contents and then heating at certain temperature followed by filteration, pasturisation and homogenization ....
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....her -Other : 0402 91 --Not containing added sugar or other sweetening matter : 0402 91 10 ---Condensed milk 0402 91 90 ---Other 0402 99 ---Other : 0402 99 10 ---Whole milk 0402 99 20 ---Condensed milk 0402 99 90 ---Other 0404 WHEY, WHETHER OR NOT CONCENTRATED OR CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER; PRODUCTS CONSISTING OF NATURAL MILK CONSTITUENTS, WHETHER OR NOT CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER, NOT ELSEWHERE SPECIFIED OR INCLUDED 0404 10 -Whey and modified whey, whether or not concentrated or containing added sugar or other sweetening matter : 0404 10 10 ---Whey, concentrated, evaporated or condensed, liquid or semi-solid 0404 10 20 ---Whey, dry, blocks and powdered 0404 10 90 ---Other 0404 90 00 -Other The Chapter Note 1 of Custom Tariff Act,1975 is read as under : I. The expression "milk" means full cream milk or partially or completely skimmed milk. The relevant explanatory notes of CTH 04.02 and 04.04as per the HSN is as below: CTH 04.02 04.02 Milk and cream, concentrated or containing added sugar or other sweetening matt....
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....d (to obtain, for example, a protein-rich product). Apart from natural milk constituents and the additives mentioned in the General Explanatory Note to this Chapter, the products of this heading may also contain added sugar or other sweetening matter. The powdered products of this heading, particularly whey, may contain small quantities of added lactic ferments, with a view to their use in prepared meat products or as additives for animal feed. The heading does not cover: (a) Skimmed milk or reconstituted milk having the same qualitative and quantitative composition as natural milk (heading 04.01 or 04.02). (b) Whey cheese (heading 04.06). (c) Products obtained from whey, containing by weight more than 95% lactose, expressed as anhydrous lactose, calculated on the dry matter (heading 17412). (d) Food preparations based on natural milk constituents but containing other substances not allowed in the products of this Chapter (in particular, heading 19.01). (e) Albumins (including concentrates of two or more whey proteins, containing by weight more than 80% whey proteins, calculated on the dry matter) (heading 35.0....
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...., partly skimmed or skimmed The above case law is not relevant in the instant case and not applicable because in the said referred case CETAT was to decide "whether skimmed milk powder produced by them is classifiable under sub-heading 0401.19 of the Schedule to the Central Excise Tariff Act as claimed by them or under sub-heading 0401.13 as confirmed by the Commissioner (Appeals) under the impugned order" whereas the present application is with regard to the classification of "Beverages containing milk" and not of "skimmed milk powder". • Hon'ble Punjab & Haryana High Court in case of Food Specialities Ltd. V/s UOI reported in 1991 (51) ELT 310 (P&H), held that the Indian Standard specifications for milk powder issued by the ISI as well as the Standards under the prevention of Food Adulteration Rules, 1955 were relevant to decide even under the Central Excise Law as to what was skimmed milk or partially skimmed milk or full skimmed milk. The aforesaid judgement is not applicable in the instant Advance Ruling case because the said judgement is with regard to decide the nature of skimmed milk or partially skimmed milk or full skimmed milk whereas in th....
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....not sweetened or flavoured 2202 99 20 ---Fruit pulp or fruit juice based drink 2202 99 30 ---Beverages containing milk 2202 99 90 ---Other The relevant Explanatory notes as per HSN is as below: 22.02 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 20.09. 2202.10 -Waters, including mineral waters anti aerated waters, containing added sugar or other sweetening matter or flavoured -Other : 2202.91 --Non-alcoholic beer 2202.99 --Other This headings covers non-alcoholic beverages, as defined in Note 3 to this Chapter not classified under other headings, particularly heading 20.09 or 22.01. (A) Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured. This group includes, inter alia: (1) Sweetened or flavoured mineral waters (natural or artificial). (2) Beverages such as lemonade, orangeade, cola, consisting of ordinary drinking water, sweetened or not, flavoured with fruit ju....
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....st. Coop. Milk Producers' Union Ltd. v. UOI [2015 (320) E.L.T. 408 (Guj.)] dealt with the issue of classification of flavoured milk, which is as follows : "[Order per : M.S. Shah, J. (Oral)]. - What is challenged in this petition under Article 226 of the Constitution of India is the constitutional validity of the Central Government Notification No. 28/2007-Central Excise, dated 15-6-2007, particularly Serial No. 1 in the table insofar as in column No. 2, code 2202 90 30 is given to "Flavoured milk of animal origin" while giving the said item exemption from duty. The dispute is about the flavoured milk being produced by the petitioners under the brand name Amul Kool/Amul Kool Cafe. 2. Mr. Paresh M. Dave for the petitioners has submitted as under :- 2.1 Earlier under the six digit code system prevailing till 27-02-2005, the flavoured milk made by the petitioners was falling under Entry 0401.11 which read as under :- CHAPTER 4 DAIRY PRODUCE; EDIBLE PRODUCTS OF ANIMAL ORIGIN, NOT ELSEWHERE SPECIFIED OR INCLUDED Notes :- 1. The expression, 'Milk' means full cream milk or partially or completely skimmed milk. 2 ......
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....tates that only items like Milkis and Swerve (Vanana) being made by other foreign producers can be considered as beverages containing milk because over and above milk, they contain many other ingredients and milk is only one of the ingredients. On the other hand, Amul Kool and Amul Kool Kafe are only skimmed milk with sugar and flavour and therefore they fall only under Chapter 4 providing for dairy produce where note 1 specifically defines milk as including skimmed milk. 2.5 The Notification dated 15-6-2007 reads as under :- "In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby further amends the following notifications of the Government of India in the Ministry of Finance (Department of Revenue) specified in column (2) of the Table hereto annexed, in the manner and to the extent specified in the corresponding entry in column (3) of the said Table, namely :- Sr. No. Notification No. and date Amendments (1) (2) (3) 1. 3/2005-Central Excise dated the 24th February, 2005 [G.S.R. 9....
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....to exemption from excise duty for the entire period from 28-2-2005 to 14-6-2007 by contending that the flavoured milk is only milk with sugar and flavour and is not beverage containing milk as such. Hence, it would have been open to the petitioners to contend that the flavoured milk made by them only falls under Tariff Item No. 0402 99 90 for which Nil rate of duty is prescribed right from 28-2-2005 onwards. 2.8 However, the Central Government itself having given the classification of Tariff Item No. 2202 90 30 in the Notification dated 15-6-2007, apparently with prospective effect, no authority whether the Commissioner of Central Excise or the Appellate Tribunal could accept the petitioners' contention that flavoured milk falls under Tariff Item No. 0402 99 90. The petitioners have, therefore, challenged the Notification dated 15-6-2007 only in so far as it purports to give classification of Tariff Item No. 2202 90 30 to "Flavoured milk of animal origin". 2.9 In view of the above Notification, the authority which has issued the show cause notice on 16-4-2007 would simply proceed on the basis of the said classification code given by the Central Government in the N....
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....rred to in the General Explanatory Note to this Chapter. The heading also covers reconstituted milk and cream having the same qualitative and quantitative composition as the natural products. 2. Flavoured milk is classifiable under HS code 2202. 3. Fitment Committee does not recommend issuance of such clarification. 18. In view of the above, we arrive to the conclusion that 'flavoured milk' is classifiable under Tariff Item 2202 99 30 of the First Schedule to the Customs Tariff Act, 1975 as a "beverage containing milk" under HS Code 2202. 19. We also refer to the following Rulings of Advance Authority, which are squarely applicable in the instant case: (i) Tamilnadu Advance Authority in case of M/s. BRITANNIA INDUSTRIES LIMITED {Advance Ruling No. 08/AAR/2020, dated 25-2-2020} reported in ELT 2020 (36) GSTL 582 (AAR -GST-T.N.) has held that, Milk - UHT Sterilized Flavoured Milk - Product consists of Standardised/Toned milk (87% to 89%) without removal of fat content thereon, sweetened with around 10% of sugar to which stabilizers, flavours, etc. are added - Products being marketed as Thick shakes' and ready for consumption, specifically excluded under ....