TaxTMI 
TaxTMI 
2021 (4) TMI 616
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....he GST Tariff. 3. The applicant submitted the following with regard to the case about flavoured milk:- • The process of the flavoured milk is standardization of fresh milk according to the fat contents and then heating at certain temperature followed by filtration, pasteurization, and homogenization and then mixing of sugar and various flavours and finally bottling. The flow chart of the manufacturing process is enclosed and marked as Annexure-"A". • As aforesaid, the process involves various operations, but it comes out from the process that (i) adding flavours to milk does not change essential character of milk; (ii) flavoured milk is a substitute for milk; (iii) it is a simple preparation of milk; (iv) no manufacturing process is involved nor does milk change its composition in any way. Since the commodity milk and milk products are enumerated in Chapter 4, the applicant understands that tariff item/ HSN code 0402 9990 is applicable to flavoured milk. • As per Harmonised System of Nomenclature, Chapter 4 covers the following Diary products. i. Milk (i.e. Full Cream Milk, and partially or compl....
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....er-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 completely skimmed milk. • A reference may be made to the judgement of the Hon'ble Punjab & Haryana High Court in case of Food Specialities Ltd. V/s UOI at this stage, because the Hon'ble High Court has, in the said judgment 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 partly skimmed milk or full skimmed milk. The view of the Hon'ble Punjab & Haryana High Court, as expressed in the above judgment, is also affirmed by the Hon'ble Supreme Court, and therefore, the Indian Standards as well as PF Rules may be applied to consider classification of the product in question under the GST Tariff which is an adoption of the Customs Tariff.....
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....d 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 of the Hon'ble Supreme Court] that PFA Standards were relevant for classifying milk under Chapter 4 of the Tariff • The National Diary Research Institute, Bangalore has also confirmed that flavored milk falls, under Dairy produce as per the FSSAI, 2006. Under FSSAI regulations 2011, section 2.1.3 defines flavoured milk as a "product prepared from milk or other products derived from milk, or both, and edible flavorings with or without addition of sugar, nutritive sweeteners, other non-diary ingredients, including stabilizers and food colors". Flavoured milk shall be subjected to heat treatment as provided in sub-regulation 2.1.1 (general standards for milk and milk products). Where flavoured milk is dried or concentrated, the dried or concentrated product on addition of prescribed amount of water also gives a product conforming to the requirements of flavoured milk. • The applicants submits that a similar Advance Rulin....
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....ilar provisions, a reference to the CGST Act would also mean a reference to the GGST Act. 6. We observe that the applicant is engaged in the manufacture of goods like Ice cream, ready to eat food and various other milk product. Among other products, the applicant is producing flavoured milk viz. Badam, Elaichi, Kesar and Rose flavour, which is sold under the trade name of "Power Sip". 7. 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 and then mixing of sugar and various flavors and finally bottling. The essential constituents of the milk have not changed even after adding sugar and permitted flavors and still retain its essential character of milk. Further stated that the process involves various operations, but it comes out from the process that (i) adding flavors to milk does not change essential character of the milk; (ii) flavoured milk is a substitute for milk (iii) It is a simple preparation of milk (iv) no manufacturing process is involved nor does milk change its composition in any way. The wor....
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....ED 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 matter (+). 0402.10 -In powder, granules or other solid forms, of a fat content, by weight, not exceeding 1.5% -In powder, granules or other solid forms, of a fat content, by weight, exceeding 1.5% : 0402.21 --Not containing added sugar or other sweetening matter 0402.29 --Other -Other : 0402.91 --Not containing added sugar or other sweetening matter 0402.99 --Other This heading covers milk (as defined in Note I to this Chapter) and cream, concentrated (for example, eva....
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....tituted 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 35.02) or globulins (heading 35.04). 8.2 From the above, the following are deduce: • 'Milk', to be covered in this chapter are 'full cream milk or partially or skimmed milk' • Beverages consisting of milk flavoured with cocoa or other substances (heading 22.02) are not covered under CTH 0402 • CTH 0404 90 covers fresh or preserved products consisting of milk constituents, which do not have the same composition as the natural product, provided they are not more specifically covered elsewhere 9.....
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....td. 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 the case at hand is to decide the classification of "Beverage containing milk". Further, the other Act cannot be considered to decide the classification under the GST Tariff which is aligned with Custom Tariff because the purpose and objective of the other Act i.e. PFA (Prevention of Food and Adulteration Act) are different from the Custom Tariff Act. The standards of PFA cannot be considered to decide the classification of any product under GST Act because objective and purpose of both the Act are different and both cannot be mixed to decide the particular issue of one Act. When this is the fact, there appears to be no relevanc....
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....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 juices or essences, or compound extracts, to which citric and or tartaric acid are sometimes added. They are often aerated with carbon dioxide gas, and are generally presented in bottles or other airtight containers (B) Other non-alcoholic beverages, not including fruit or vegetable Juices of heading 20.09. This group includes, inter alia : (1) Tamarind nectar rendered ready for consumption as a beverage by the addition of water and sugar and straining. (2) Certain other beverages ready for consumption, such as those with a basis of milk and cocoa. From the above, it is clear that other non....
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....y 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 ............... Heading No. Sub-heading No. Description of goods Rate of duty (1) (2) (3) (4) 04.01 0401.11 Flavoured milk, whether sweetened or not, put up in unit containers and ordinarily intended for sale. Nil. 2.2 It is submitted that even under the 8 digit code introduced from 28-2-2005, flavoured milk could only fall under Chapter 4 Heading No. 0402, more particularly under sub-heading No. 0402 99 90 reading as under :- CHAPTER 4 DAIRY PRODUCE; BIRD'S EGGS; NATURAL HONEY; EDIBLE PRODUCTS OF ANIMAL ORIGIN, NOT ELSEWHERE SPECIFIED OR INCLUDED Notes :- 1. The expression '....
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.... 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. 95(E), dated the 24th February, 2005] In the said notification, in the Table, after S. No. 11 and the entries relating thereto, the following S. No. and entries shall be inserted, namely :- (1) (2) (3) (4) "11A. 2202 90 30 Flavoured milk of animal origin Nil" 2.6 The basic Notification No. 3/2005-C.E. is a general exemption notification prescribing effective rate for various excisable goods, and it is under this general exemption notification that Sr. No. 11A has been inserted from 15-6-2007 thereby specifying nil rate of duty for flavoured milk of animal origin. As the pr....
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....pellate 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 Notification dated 15-6-2007 to which the petitioners have already given reply on 10-7-2007. 3. Having heard learned counsel for the petitioners, we are of the view that looking to the subject matter of the controversy raised in the petition, this appears to be an eminently fit case where the petitioners should make a representation to the Central Government. Accordingly, if the petitioners make such a representation within one week from today, it is expected that the Central Government will decide the same as expeditiously as possible and preferably within one month from the date of receipt of the representation. 4. As regards pendency of....
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....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 Heading 0402 of Customs Tariff Act, 1975, as seen from the Explanatory notes to HSN of the said chapter - Product not lacking any natural milk constituents nor any natural milk constituents added to the product, therefore, not classifiable under Heading 0404 ibid also - Product appropriately classifiable under Tariff Item 2202 99 30 ibid as 'Beverages containing milk' as also clarified by GST Council. [paras 6.4, 6.5, 6.6, 6.7] (ii) Andhra Pradesh Advance Authority in case of M/s. TIRUMALA MILK PRODUCTS PVT. LTD in ELT 2020 (32) G.S.T.L. 558 (A.A.R. - GST - A.P.) has held that, Milk - Flavoured milk - Classifiable under Tariff....