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2019 (7) TMI 1607 - APPELLATE AUTHORITY FOR ADVANCE RULING GUJARATClassification of goods - Fanta Fruity Orange - whether the product “Fanta Fruity Orange” being manufactured and supplied by the appellant is appropriately classifiable under Sub-heading 2202 10 or under Tariff Item 2202 99 20 or 2202 99 90? - challenge to AAR decision. HELD THAT:- On going through the Explanatory Notes of HSN and the contents of the product “Fanta Fruity Orange” it is evident that the product “Fanta Fruity Orange” fully conforms to the description given in Explanatory Notes of HSN for Sub-heading 2202 10. Therefore, the said product is found to be appropriately classifiable under Sub-heading 2202 10 - 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. There is nothing in the Customs Tariff or Explanatory Notes of HSN pertaining to Heading 2202 to suggest that the product containing Carbon Dioxide as preservative only would not fall under Tariff Sub Heading 2202 10. On the contrary, Explanatory Notes of HSN for Sub Heading 2202 10 specifically mentions that the products of this Sub heading are often aerated with carbon dioxide gas. Therefore, the product “Fanta Fruity Orange” is not excludible from Sub Heading 2202 10 on the ground that the product contains Carbon Dioxide as preservative only. Tariff Item 2202 99 20 which covers “Fruit pulp or fruit juice based drinks” - HELD THAT:- 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 - 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 that “juices” of heading 20.09 would cover “concentrated juices”. Hon’ble CESTAT in appellant’s own case M/S. HINDUSTAN COCA COLA BEVERAGES P. LTD. VERSUS CCE, CHENNAI-IV [2017 (3) TMI 1410 - CESTAT CHENNAI] has decided this issue - the view of the GAAR that the product “Fanta Fruity Orange” do not fall under Tariff Item 2202 99 20 is confirmed. As regards the third limb of the question raised for classification of “Fanta Fruity Orange”, it is observed that the GAAR concluded that the said product would not fall under Sub heading 2202 10 but would fall under Sub heading 2202 99. As the GAAR further concluded that the said product would not fall under Tariff Item 2202 99 20 as “Fruit pulp or fruit juice based drinks”, it held that the product would fall under residuary entry of Tariff Item 2202 99 90. However, as we have already discussed that the product “Fanta Fruity Orange” is appropriately classifiable under Sub heading 2202.10, the question of classifying it under residuary entry of Tariff Item 2202 99 90 does not arise. The product “Fanta Fruity Orange” manufactured and supplied by M/s. Hindustan Coca Cola Beverages Private Limited (GSTIN 24AAACH3005M1ZX) is classifiable under Sub heading 2202 10 and Goods and Services Tax rate of 28% as per S. No. 12 of Schedule IV of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended, issued under the CGST Act, 2017 and corresponding Notification No. 1/2017-State Tax (Rate) dated 30.06.2017, as amended, issued under the GGST Act, 2017 and Goods and Services Tax Compensation Cess rate of 12% as per S. No. 2 of Schedule of Notification No. 1/2017-Compensation Cess (Rate) dated 28.06.2017, are applicable to the said product - the decision of AAR modified to such extent.
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