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2019 (12) TMI 1577 - AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESHClassification of goods - rate of duty - outward supply of flavoured milk - whether 'flavoured milk' is classifiable under tariff item 2202 9930 of the First Schedule to the Customs Tariff Act, 1975 as a “beverage containing milk” with the rate of tax as 12% GST as per the ruling of AAR or it is classifiable under HSN 0402 9990 with the rate of tax as 5% under Notification No.1/2017 - Central Tax (Rate) as per the contention of the appellant? - Whether 'flavoured milk' can be considered a beverage containing milk? - N/N. 3/2005-C.E. HELD THAT:- In common parlance, a beverage is “(chiefly in commercial use) a drink other than water. It is a liquid for drinking especially such liquid other than water (as tea, milk, fruit juice, beer) usually prepared (as by flavouring, heating, admixing) before being consumed”. The instant product, the flavoured milk is undoubtedly a beverage containing milk. It is moreover, a 'preparation' made as per the description given by the appellant in the flow chart submitted by him - even though the product in question is a dairy produce and also an edible product of animal origin, the qualifier that it is “not elsewhere specified or included” makes it ineligible to be classified under the chapter 4. The product in dispute as it is already specified and included under chapter 22 dealing with goods /items of “Beverages, spirits and vinegar” makes it ineligible to be classified under chapter 4. Thus, the commodity 'flavoured milk' merits classification under beverage containing milk under tariff heading 2202 90 30. The rate of tax applicable for the said tariff item is 12% GST under entry no. 50 of Schedule II of Notification No.1/2017 - Central (Rate) dated 28.06.2017 as amended - the Ruling of the AAR is in tune with legal position and it needs no interference and the appeal is accordingly dismissed.
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