AI Drafter 
TaxTMI 
TaxTMI 
2019 (12) TMI 1577
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.... of processing and sale of milk and milk products including flavoured milk. The appellant submits that flavoured Milk is obtained by adding sugar and different flavours to milk which does not change the essential character of milk. He states that it is a substitute for milk and a simple modification of milk which involves no manufacturing process. The appellant submits the process of obtaining flavoured milk as follows: "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. As per the flow chart, it involves various operations by RMRD team, weighing team, processing team, packing team and warehousing / dispatch teams and thereby it is a preparation and no more it is fresh milk after adding flavours. The appellant obtains flavoured milk of badam". The appellant in his plea to the AAR, A.P had raised following question. (a) What is the rate of GST applicable on outward supply of "Flavoured Milk"? The Authority for Advance Ruling, A.P, had ruled that 'flavo....
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....ading 04.03). The products of this heading may be frozen and may contain the additives referred 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. However, the Explanatory note to HSN Code 0402 actually reads as under: "MILK AND CREAM, CONCENTRATED OR CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER". 2.4. The appellant contends that explanatory note, as extracted against Serial No.18 for flavoured milk in the Minutes is not factually correct and the appellant is categorical about the same. After due verification, the appellant is certain that the above extract as appearing in the Minutes as well as the impugned Ruling is erroneous and not truly contained in the Explanatory Note to HSN 0402. Therefore, no credibility can be acceded to the Minutes or the reliance placed on the same in the impugned Ruling. 2.5. The appellant also states that, undoubtedly, flavoured milk will squarely fall w....
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....It is clear from the aforesaid that all the products of milk and cream would be covered by this Chapter Heading and the addition of sugar or other sweetener would not make any difference. 7. Since the products in question are the mix of milk as well as milk powder, as far as milk, viz., flavoured milk is concerned, it is covered by sub-Heading 0401.11 and, skimmed milk powder and milk powder are covered by 0401.12 and 0401.13 respectively. The appellant states that the observations of Supreme Court are clear to the effect that the products of milk would be covered by this chapter and addition of sugar or other sweetener would not make a difference. Flavoured Milk is obtained by adding sugar and different flavors to the milk, which does not change the essential character of milk. It is a substitute for milk and a simple modification of the milk, with no manufacturing process involved. 2.7. The Appellant submits the following process of the flavoured milk. Flavoured milk is a result of 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 an....
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....proceedings arising from the show-cause notice, it will be open to the petitioners to make a request before the Commissioner of Central Excise to adjourn the hearing suitably so as to await the decision of the Central Government on the representation. We are sure that such a request will be considered by the Commissioner in the proper perspective when the matter comes up for hearing before the Commissioner on 16-8-2007. The petition stands disposed of in the above terms. It is clear that there is no law laid down by the Gujarat High Court in the said decision. The matter was left to be decided by the Central Government on the representation to be filed by the assessee therein. 2.9. The appellant further states that AAR had erred in ignoring the decision of the Supreme Court in CCE Vs. Amrit Food (324 ELT 418) on 3.9.2015 which is directly on the point as discussed above and amounts to a binding precedent under Article 141 of the Constitution of India. The appellant opines that AAR ought to have seen that the eight digit code introduced from 28.2.2005 will cover flavoured milk under Sub-Heading-0402 9990. 3. Personal Hearing The Personal Hearing was called....
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....Description of goods Unit Rate of duty (1) (2) (3) (4) 0401 Milk and cream, not concentrated nor containing added sugar or other sweetening matter. 0402 Milk and cream, concentrated or containing added sugar or other sweetening matter. 0402 91 Not containing added sugar or other sweetening matter. 0402 99 Other 0402 99 10 Whole milk kg. Nil 0402 99 20 Condensed milk kg. 16% 0402 99 90 Other kg. Nil Further, the classification of the products in question had been changed, vide the basic Notification No. 3/2005-C.E., which 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 under Sr. No. Notification No. and date Amendments (1) (2) (3) 1. 3/2005-Central Excise dated the 24^th February, 2005[G.S.R. 95(E), dated the 24th February, 2005] In the said notification, in the Table, after ....
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....nised or peptonised; but it excludes milk and cream which have been concentrated or which contain added sugar or other sweetening matter (heading 04.02) and curdled, fermented or acidified milk and cream (heading 04.03). The products of this heading may be frozen and may contain the additives referred 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. In this regard this authority opines that the contention of the appellant that too much of reliance being placed on the Agenda of the 31st GST Council Meeting volume-II dated: 22.12.2018 clarifying the HSN code and rate of tax of flavoured Milk by the AAR is presumptuous of nature. Moreover the appellant's argument that the extract of the clarification given in the minutes of the GST Council Meeting is not contained in the explanatory note to HSN 0402 and therefore no credibility can be acceded to the minutes is erroneous. The very purpose of mentioning the spec....