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M/s. PARLE AGRO (P) LTD. Versus COMMISSIONER OF COMMERCIAL TAXES, TRIVANDRUM, M/s. WE SIX TRADERS ETC. ETC. Versus COMMERCIAL TAX OFFICER & ANR. AND ASSISTANT COMMISSIONER (ASSESSMENT) & ANR. Versus M/s. PARLE AGRO (P) LTD.

2017 (5) TMI 592 - SUPREME COURT OF INDIA

Classification - fruit juice based drink known as ‘Appy Fizz’ - The appellant was classifying the product as fruit juice based drink under Entry 71 of the notification issued under Section 6(1)(d) of Act, 2003 till 2007 and was paying @ 12.5% VAT - the Committee of Joint Commissioner passed the clarification order dated 6th November, 2015 classifying the product as ‘aerated branded soft drinks', at the rate of 20% - What is interrelation between Section 6(1)(a) and Section 6(1)(d) of Act, 2003? .....

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ernment, to include such products in notification under Section 6(1)(d). - What is scope and ambit of Item 5 of Entry 71 as amended? - Held that: - A bare perusal of Entry 71 as above indicates that the Entry covers nonalcoholic beverages and their powders, concentrates and tablets in any form including Item No.2 contains fruit juice, fruit concentrates, fruit squash, fruit syrup and pulp and fruit cordial - the Entry of fruit juice based drinks got subsumed in the residuary entry and the am .....

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the term 'aerated'. The word 'aerated' is scientific and technical word used under different statutes and the scientific and technical meaning of the word 'aerated' can be looked into for finding out the real import of the Entry - common parlance and commercial parlance test was not the only test which could have been applied for interpreting the entries in items mentioned in Section 6(1)(a) and the entries which contain scientific and technical word were also to be looked into in technical and .....

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ciis' - Held that: - Applying the principle of construction of 'noscitur a sociis' on Entry 71, it is clear that clause 5 of Entry 71 has to take colour and meaning from the other items included in Entry 71. Item 5 of Entry 71 uses the words “similar other products not specifically mentioned under any other entry in this list or any other schedule”. Thus, the products which are to be covered under Item No.5 are similar other products - When Item No.2 of the Entry 71 that is fruit juice, fruit co .....

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by the appellant along with Clarification Application under Section 94? - Held that: - the judgment of the Division Bench of Kerala High Court in M/s. Trade Lines did not conclude the issue and the Committee of Commissioners was not absolved from its duty of deciding the same in accordance with the materials brought on the record by the appellant and although the Committee noticed all the pleadings and contentions but mainly relying on the ruling of M/s. Trade Lines dismissed the clarification .....

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High Court in its judgment found that since the product charged with air or carbon dioxide was an aerated drink. From the manufacturing process which was on the record, it is clear that carbon dioxide to the extent of 0.6 percent was added as preservative. Technical note submitted on behalf of the appellant clearly mentioned that use of carbon dioxide was only as a preservative of 'Appy Fizz'. - Whether decision and opinion of Food Safety Authorities on the product in question were relevant? .....

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ave classified as 'aerated branded soft drinks'. The certifications which were relied by the appellant indicate that in the case of 'Appy Fizz' the product does not undergo aeration or carbonation; the product is thermally processed with CO2 which help in preserving the Apple Juice concentrate which is otherwise perishable in nature - Revenue has not filed any material on the record either before the Clarification Authority or before the High Court in support of its view that product is covered .....

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ant. - CIVIL APPEAL NOS. 6468-6469 of 2017, (ARISING OUT OF SLP(C) NOS. 14697-14698 OF 2016), CIVIL APPEAL NOS. 6471-6472 OF 2017, (ARISING OUT OF SLP(C) NOS. 24460-61 of 2016) And CIVIL APPEAL NO.6470 OF 2017, (ARISING OUT OF SLP(C) NO. 9467 OF 2016) - Dated:- 9-5-2017 - Mr. A. K. Sikri And Mr. Ashok Bhushan JJ. For the Petitioner : Mr. Aditya Bhattacharya, Adv., Mr. Victor Das, Adv., Mr. M. P. Devanath, Adv., Ms. L. Charanya, Adv. And Mr. Ramesh Babu M. R., Adv. For the Respondent : Mr. G. Pra .....

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ivil Appeals arising out of SLP(C) Nos. 1469798 of 2016 and SLP(C) No.9467 of 2016 are between the same parties whereas Civil Appeals arising out of SLP(C) Nos.2446061 of 2016 have been filed by different appellants. Civil Appeals arising out of SLP(C) Nos. 1469798 of 2016 5. The appellantM/ s. Parle Agro (P) Ltd. is a dealer engaged in fruit juice based drink known as Appy Fizz which has obtained certificate of registration under Kerala Value Added Tax Act, 2003 (hereinafter referred to as Act, .....

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pellate Tribunal dismissing the appeal. The High Court vide its judgment and order dated 17th November, 2014 dismissed the revision upholding the order passed by the Assessment Officer and the First Appellate Authority. Special Leave Petition was filed by M/s. Trade Lines against the judgment of Kerala High Court which was, however, permitted to be withdrawn by order dated 19th January, 2015 of this Court. On 4th August, 2015 the assessment notices were issued to the appellant for Assessment Yea .....

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on application appellant has filed certificates and expert opinions. Writ Petition No.26279/2015 was filed by the appellant before Kerala High Court seeking direction to the Commissioner of Commercial Taxes to consider and pass order on the application for clarification within a specified time and the proceedings initiated by the Commissioner of Commercial Taxes by different notices be kept in abeyance. Learned Single Judge by its judgment and order dated 31st August, 2015 disposed of the writ p .....

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ed a writ appeal against the judgment of the learned Single Judge before Division Bench of the Kerala High Court. The Division Bench of Kerala High Court vide its judgment dated 5th October, 2015 dismissed the writ appeal by affirming the decision of the learned Single Judge. 6. After the above judgment of the Division Bench dated 5th October, 2015, the Committee of Joint Commissioner passed the clarification order dated 6th November, 2015 classifying the product as aerated branded soft drinks&# .....

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1469798 of 2016 have been filed against the aforesaid order dated 5th February, 2016 and the review order dated 23rd March, 2016 by the appellant. Civil Appeal arising out of SLP(C)No.9467 of 2016 8. The Assistant Commissioner (Assessment) and the Commissioner of Commercial Taxes have filed this appeal challenging the judgment dated 5th October, 2015 by which writ appeal filed by the Assistant Commissioner(Assessment) and another against the direction of the learned Single Judge dated 31st Augus .....

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assessment was issued against which the assessee filed appeal before Kerala Value Added Tribunal in which appeal the Tribunal directed the assessee to deposit 30% as precondition to hear the matter on merits. The assessee filed writ petition in the High Court challenging the aforesaid order passed by the Tribunal on the stay petition. The assessee submitted before the High Court that against the judgment of the High court dated 5th February, 2016 in the case of M/s. Parle Agro (P) Ltd. SLP has .....

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ly, 2016. 10. We have heard Shri K.K. Venugopal, learned senior counsel for the assessee. Shri Jaideep Gupta, learned senior counsel has appeared for the Revenue. 11. Shri K.K. Venugopal, learned senior counsel, submits that both High Court and Committee of Commissioners erred in not classifying the product of 'Appy Fizz' under Entry 71 of S.R.O.No.119 of 2008. Classification of the product as 'aerated branded soft drinks, excluding soda' under Section 6(1)(a) is not the correct .....

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red under Entry 71. When in 2008 Entry 71 was amended, there was no amendment to the schedule under Section 6(1)(a). He submits that had the intention of the legislation was to pick up the certain products earlier covered under Entry 71 and place them in Schedule under Section 6, then entry 'aerated branded soft drinks, excluding soda' which earlier did not cover the said product, would also have been amended at the same time. He submits that if prior to 2007, 'Appy Fizz' could n .....

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n nature. Soft drinks under Kerala VAT would be those drinks that are synthetic whether or not aerated. The product in question is not a synthetic product. It contains more than 10% fruit juice. It is fruit juice based drink and not covered by Section 6(1)(a). A fruit juice based drink is more akin to fruit juice than soft drink. Subclause (5) of Entry 71 covers similar other products not specifically mentioned under any other entry in this list or any other schedule. The product is fully covere .....

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has adverted to the technical evidence and certificate filed by the appellant along with proceedings under Section 94 of Act, 2003. The scientific evidence fully proved that products do not undergo aeration or carbonation; the product is thermally processed with CO2 which help in preserving the Apple Juice concentrate which is otherwise perishable in nature. The certifications fully proved the product as 'Thermally processed fruit juice based drink'. 14. Learned counsel further submitte .....

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k' within the meaning of Section 6(1)(a). He submits that after deletion of Entry 71(4) by S.R.O.No.119 of 2008 which provided Fruit pulp or fruit based drink , it was clear indication of the legislation that the 'fruit based drinks' are out of Entry 71 and have to be covered into 'aerated branded soft drinks' under Section 6(1)(a). He submits that it is not disputed that 'Appy Fizz' is a branded drink and further it is aerated by CO2, hence, it is aerated drink. He s .....

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not relevant. Learned counsel submitted that under the Rules of interpretation as contained in the Act, 2003, the product being not covered with any of HSN number common parlance or commercial parlance test has rightly been applied by the High Court. Under the common parlance even if the product contained more than 10% fruit concentrate it is a soft drink as commonly known and tax liability @ 20% has rightly been imposed. 16. Learned counsel for the parties have placed reliance on various cases .....

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3) Whether common parlance test is the only test to be applied for understanding the different entries under Section 6(1)(a) and Section 6(1)(d)? (4) Principle of Noscitur a Sociis. (5) Whether the Division Bench of Kerala High Court in M/s. Trade Lines can preclude the Committee of Joint Commissioners to examine the materials filed by the appellant along with Clarification Application under Section 94. (6) Whether CESTAT decision dated 18.03.2008 has any relevance with regard to the classificat .....

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of 2008. Section 6 of the Kerala Value Added Act, 2003 provides for levy of tax on sale or purchase of goods. Section 6(1)(a) which is relevant for the present case as existed before 1st April, 2007, was as follows: "6(1)(a) in the case of goods specified in the [Second, and Third Schedules] at the rates specified therein and at all points of sale of such goods within the State (and in the case of goods specified be low at the rate of twenty percent, at all points of sale of such goods wit .....

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008 is as follows: "71. Nonalcoholic beverages and their powders, concentrates and tablets including (I) aerated water, soda water, mineral water, water sold in sealed containers or pouches (ii) fruit juice, fruit concentrate, fruit squash, fruit syrup and fruit cordial [x x x] (v) other nonalcoholic beverages; not failing under any other entry in this List or in any of the Schedule. (1) Water not containing added sugar or other sweetening matter; [x x x] (b) Aerated water (2) Water contain .....

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ary No.1167 dt. 21.6.07 21. Omitted by S.R.O. No.543/2007 dt, 20607 published in Kerala Gazette Extraordinary No.1167 dt.2162007. Prior to the omission it read as under: (a) Mineral water 2201.10.10 21. Now, we come to Section 6(1)(a)(d) which exists as on date as: 6. Levy of tax on sale or purchase of goods (1) Every dealer whose total turnover for a year is not less than ten lakhs rupees and every importer or casual trader or agent of a nonresident dealer, or dealer in jewellery of gold, silve .....

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ver, (a)in the case of goods specified in the Second and Third Schedules at the rates specified therein and at all points of sale of such goods within the State and in the case of goods specified below, mentioned in column (4), at all points of sale of such goods within the States namely; S.No. Description of Goods HSN Code Rates of Tax in percentage (1) (2) (3) (4) 1. Cigars, Cheroots, cigarillos and cigarattes, of tobacco or of tobacco substitutes 2402 [30] 2. Aerated branded soft drinks, excl .....

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factured tobacco substitutes homogenized or reconstituted tobacco; tobacco extracts and essences 2403 22.5 Explanation: The Rules of Interpretation of the Schedules appended to the Schedules of this Act shall apply to the interpretation of the HSN codes mentioned in this clause. xxx xxx xxx xxx (d) in the case of goods not falling under clause (a) or (c) at the rate of 14.5% at all points of sale of such goods within the State, Government may notify a list of goods taxable at the rate of 14.5%; .....

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in sealed containers or pouches. (2) Fruit juice, fruit concentrates, fruit squash, fruit syrup and pulp, and fruit cordial. (3) Soft drinks other that aerated branded soft drinks. (4) Health drinks of all varieties. (5) 'Similar other products not specifically mentioned under any other entry in this list or any other schedule'. 24. As noted above the application was filed by the appellant under Section 94 of Act, 2003 on 24th August, 2014 which has been decided by the Committee of Joint .....

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chase, or if tax is payable, the point and the rate thereof; or (e) any activity carried out in any goods amounts to or results in the manufacture of goods; such dispute an authority consisting of three officers in the rank of Joint Commissioner or Deputy Commissioner nominated by the Commissioner on application by a dealer or any other person. (1A) If the dispute relates to the tax rate of a commodity, the details of the first seller, or the manufacturer of such goods in the State, as the case .....

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ospective operation only. ... ... ... ... ... ... ... ... 25. We, thus, have to examine the classification of product in the light of provisions of Section 6(1)(a) and Entry 71 as existing after 1st April, 2007. Issue Nos.1 and 2 26. We consider both the issues together. According to Section 6(1) liability to pay tax shall be on the taxable turnover of every dealer as enumerated in subclause (a) to subclause (f). Subclause (a) provides that in the case of goods specified in the Second and Third .....

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based goods, pan masala, other manufactured tobacco and manufactured tobacco substitutes. Other category contains plastic goods and goods made of polypropylene, Chloride/ Polyethylene and other plastic sheets. All goods enumerated in Section 6(1)(a) by the Legislature itself indicates that higher rate of tax has been fixed for those goods which are harmful for environment and health. Aerated branded soft drinks, excluding soda is also in the company of the above goods described in Section 6(1)( .....

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to Section 6(1)(d). Section 6(1(d) empowers the State to notify a list of goods which are taxable at the rate of 12.5% (at present at 14.5%) which does not fall under clause (a) and (c). The delegated legislative power of issuing notification to the State Government is thus restricted and can be exercised only when goods do not fall under Section 6(1)(a) or Section 6(1)(c). The State of Kerala exercising its delegated legislative power has issued notification under Section Section 6(1)(d). 28. .....

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enty percent, at all points of sale of such goods within the State, namely: Sl. No. Description of goods HSN Code (1) (2) (3) 1. Aerated Drinks 2201.10.10 (1) Mineral Water *** (2) Packaged drinking water 2202.10 (3) Branded soft drinks, excluding soda 8415 2. Air conditioners 3. Building Materials 29. The aerated branded soft drinks, excluding soda were always covered under Section 6(1)(a) and prior to 1st April, 2007 it bears HSN Code 2201.10.10. Entry 71 Item 4 also reads as fruit pulp or fru .....

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ation under Section 6(1(d). Had fruit juice based drinks were also to be covered by aerated branded soft drinks, there was no occasion for subordinate legislative authority, i.e., the State Government, to include such products in notification under Section 6(1)(d). 30. Now, we come to Entry 71 which was substituted by S.R.O. No.119 of 2008 dated 24.1.2008 w.e.f. 01.04.2007, which is to the following effect: "71. Nonalcoholic beverages and their powders, concentrates and tablets in any form .....

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heir powders, concentrates and tablets in any form including Item No.2 contains fruit juice, fruit concentrates, fruit squash, fruit syrup and pulp and fruit cordial. Soft drinks other than aerated branded soft drinks are included in Item No.3. Health drinks of all varieties are included in Item No.4 and similar other products not specifically mentioned under any other entry in this list or in any other Schedules were included in Item No.5. The Entry of fruit juice based drinks got subsumed in t .....

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extracted: RULES OF INTERPRETATION OF SCHEDULES The commodities in the schedules are allotted with Code Numbers, which are developed by the International Customs Organization as harmonized System of Nomenclature (HSN) and adopted by the Customs Tariff Act, 1975. However, there are certain entries in the schedules for which HSN Numbers are not given. Those commodities which are given with HSN Number should be given the same meaning as given Customs Tariff Act, 1975. Those commodities, which are .....

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ded soft drink'. Strictly speaking the Rule of Interpretation which is given in the Appendix to Act, 2003, are the Rules of Interpretation of Schedules that is Schedule Nos.I, II and III. Thus, for interpretation of any item in the Schedule, Rules of Interpretation as given in the Appendix are applicable. The items which fall for consideration in the present case is Item No.6(1)(a) as well as Entry 71 of S.R.O. No.119 of 2008 issued in exercise of power under Section 6(1)(d), which are the e .....

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mentioned in Section 6(1)(a) but Explanation does not say anything about the items where HSN code is not there. The Rules of Interpretation of the Schedules, thus, directly are not attracted with regard to the interpretation of the entry which does not mention with HSN code in Section 6(1)(a) although principle contained in such Rules of Interpretation may apply. Had the legislation intended the Rules of Interpretation of the Schedules should be made applicable both to the interpretation of the .....

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n the appropriate case apart from common parlance test or commercial test any other test can be applied for interpretation of the commodities included in Section 6(1)(a) apart from those which are given HSN code. 35. The principle of statutory interpretation with regard to a word in taxing statutes are well established. This Court in Porritts & Spencer (Asia) Ltd. vs. State of Haryana, 1979(1) SCC 82, has laid down following in paragraph 6: 6.....Where a word has a scientific or technical me .....

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ccasion to consider a term as occurring in Tariff Item No.25.15 of Appendix IB, Schedule 1 to the Import (Control) Order, 1955. The Court held commercial nomenclature or trade understanding inapplicable to the term. While considering the aforesaid case the Court had occasion to consider several earlier cases of this Court. Following was stated in paragraphs 36,37,40,41,42, 43: 36. In deciding this question the first thing that requires to be noted is that Entry 25.15 refers specifically not only .....

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em. Moreover, the calcareous stones as mentioned in ITC Schedule has to be taken in scientific and technical sense as therein the said stone has been described as of an apparent specific gravity of 2.5 or more. Therefore, the word marble has to be interpreted, in our considered opinion, in the scientific or technical sense and not in the sense as commercially understood or as meant in the trade parlance. There is no doubt that the general principle of interpretation of tariff entries occurring i .....

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sed then the said principle of interpretation should not be applied. Trade meaning or commercial nomenclature would be applicable if a particular product description occurs by itself in a tariff entry and there is no conflict between the tariff entry and any other entry requiring to reconcile and harmonise that tariff entry with any other entry. 37. In Union of India v. Delhi Cloth & General Mills1 the question arose as to how the term refined oil occurring in the tariff was to be construed. .....

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ndian Standards Institution furnishes very strong and indeed almost incontrovertible support for Dr Nanji s view and the respondents contention that without deodorisation the oil is not refined oil as is known to the consumers and the commercial community. … … … … … 40. It may be pointed out that this Court has clearly and unequivocally laid down that it is not permissible but in fact it is absolutely necessary to depart from the trade meaning or commercial nom .....

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of course, by the words popular sense , that sense which people conversant with the subject matter with which the statute is dealing would attribute to it. But if a word in its popular sense and read in an ordinary way is capable of two constructions, it is wise to adopt such a construction as is based on the assumption that Parliament merely intended to give so much power as was necessary for carrying out the objects of the Act and not to give any unnecessary powers. In other words, the constr .....

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II, the test that would be applied is what would be the meaning which persons dealing with coal and consumers purchasing it as fuel would give to that word. A sales tax statute being one levying a tax on goods must in the absence of a technical term or a term of science or art, be presumed to have used an ordinary term as coal according to the meaning ascribed to it in common parlance. 42. This Court in K.V. Varkey v. Agricultural Income Tax and Rural Sales Tax Officer specifically declined to a .....

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erpreted according to the well settled commercial meaning of that term which was accepted by all persons in the trade, inasmuch as the said commercial meaning would militate against the statutory context of the said exemption notification issued in June 1962. The word hank as used in the notification meant a coil of yarn and nothing more. 37. In the cases as noted above this Court departed from construing the entry from its normal commercial meaning but had adopted a technical or scientific mean .....

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arlance or commercial parlance but such a trade understanding or commercial nomenclature can be given only in cases where the word in the tariff entry has not been used in a scientific or technical sense and where there is no conflict between the words used in the tariff entry and any other entry in the Tariff Schedule. 38. In the present case, the Entry 2 under Section 6(1)(a) uses the word 'aerated'. This is scientific term and has been repeatedly used in different statutes including t .....

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mentioned in Section 6(1)(a) and the entries which contain scientific and technical word were also to be looked into in technical and scientific meaning. Both the High Court and the Committee of Joint Commissioners discarded the evidence of technical and scientific meaning of word. The appellant has rightly relied on the technical evidence brought on the record which indicate that use of carbon dioxide to the extent of 0.6 per cent was only for the purpose of preservative in packaging the commo .....

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submitted that 'Appy Fizz' which a fruit juice based drink is more akin to other commodities included in the Entry 71 other than that which was included in Section 6(1)(a). In interpreting Item 5 of Entry 71 the doctrine of 'noscitur a sociis' is fully attracted. Justice G.P.Singh in 'Principles of Statutory Interpretation, 14th Edition, has explained the 'noscitur a sociis' in the following words: "(b)Noscitur a Sociis The rule of construction noscitur a sociis .....

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to MAXWELL, means that when two or more words which are susceptible of analogous meaning are coupled together, they are understood to be used in their cognate sense. They take as it were their colour from each other, that is, the more general is restricted to a sence analogous to a less general. The same rule is thus interpreted in Words and Phrases. Associated words take their meaning from one another under the doctrine of noscitur a sociis, the philosophy of which is that the meaning of the d .....

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dingly wider. It is only where the intention of the Legislature in associating wider words with words of narrower significance is doubtful, or otherwise not clear that the present rule of construction can be usefully applied. 41. This Court in Pardeep Aggarbatti Vs. State of Punjab, 1997 (96) E.L.T. 219(S.C.), considering Entry 16 of Schedule A of Punjab General Sales Tax Act, 1948, in paragraph 9 has laid down following: 9. Entries in the Schedules of Sales tax and Excise statutes list some art .....

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y other entry in this list or any other schedule . Thus, the products which are to be covered under Item No.5 are similar other products. When Item No.2 of the Entry 71 that is fruit juice, fruit concentrates, fruit squash, fruit syrup and pulp, and fruit cordial and item No.4 that is health drinks of all varieties, are kept in mind the fruit juice based drink shall fall in Item No.5. Both High Court and Committee of Commissioners overlooked this principle while interpreting item No.5 of Entry 7 .....

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Fizz' at the rate of 20% against which M/s. Trade Lines has filed an appeal which was dismissed and thereafter Revision was filed in the High Court and the High Court dismissed the Revision affirming the assessment made at the rate of 20% tax. Proceeding under Section 94 of Act, 2003 is a separate and specific proceeding. In the present case when the appellant has filed application under Section 94 the judgment of Division Bench in M/s. Trade Lines was already rendered and in a writ petitio .....

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d the writ appeal on 15th October, 2015 and in paragraph 4 of the judgment has dealt with the judgment of M/s. Trade Lines to the following effect: 4....The socalled revisional order passed by this Court in yet another case would not also have the efficacy of depleting the jurisdiction of the authority under Section 94 of the KVAT Act to issue clarification. The very purpose of the provision in the form of Section 94 and clothing authority with power to make different nature of considerations to .....

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ng the application under Section 94 and when the Division Bench by its judgment of 5th October, 2015 dismissed the appeal of the Revenue, the Committee of Commissioners ought to have followed the observation given by the Division Bench in paragraph 4 quoted above. Thus, we are of the view that the judgment of the Division Bench of Kerala High Court in M/s. Trade Lines did not conclude the issue and the Committee of Commissioners was not absolved from its duty of deciding the same in accordance w .....

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ion of the same product 'Appy Fizz' and the order passed by the Commissioner(Appeals) whereby it was held that product 'Appy Fizz' is classifiable under subheading No.22029020 of Central Excise Tariff on the ground that the product is fruit juice based drink. Revenue challenged the order on the ground that the same is classifiable under subheading No.22021010 of Central Excise Tariff as 'aerated water'. The Tribunal vide its judgment dated 18.03.2008 dismissed the appeal. .....

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ontention of the Revenue is that the Commissioner (Appeals) has ignored the chemical examiner's report and Ministry of Food and Processing Industries opinion and which was on record and Ministry of Food and Processing Industries opinion and which was on record and held in favour of the respondents. The contention of the Revenue is that since the product in question is aerated, therefore, is classifiable as flavoured aerated water. The Revenue also relied upon the HSN Explanatory notes in sup .....

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as Central Excise Tariff under Subheading No.2202 there are specific headings in respect of soya milk, drinks etc. As per the Central Excise Tariff, the waters; including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured are classifiable under subheading No.2202.10. The drinks based on fruit juice are specifically classifiable under Heading No.22029020 of the Tariff. In the present case, there is no dispute regarding the contents of the product. Re .....

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dgment of CESTAT and the order of the Supreme Court were specifically relied by the appellant before the High Court. The High Court without giving cogent reason has refused to rely on the said adjudication. It may be said that the adjudication by the CESTAT was with regard to the HSN Code which found place in Central Excise Tariff Act. The competent entry under which CESTAT authorities were to adjudicate regarding the product has already been extracted Fruit pulp or Fruit juice based drink on wh .....

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ore deeper consideration by the High Court to find out as to whether the product is 'aerated branded soft drink' or not. The High Court in its judgment found that since the product charged with air or carbon dioxide was an aerated drink. From the manufacturing process which was on the record, it is clear that carbon dioxide to the extent of 0.6 percent was added as preservative. Technical note submitted on behalf of the appellant clearly mentioned that use of carbon dioxide was only as a .....

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bed as 'Thermally Processed/Fruit Beverages/ Fruit Drink ready to serve Fruit Beverages to the following effect: 2.3.10: Thermally Processed Fruit Beverages/Fruit Drink/ Ready to Serve Fruit Beverages 1. Thermally Processed Fruit Beverages/Fruit Drink/ Ready to Serve Fruit Beverages (Canned, Bottled, Flexible Pack And /Or Aseptically Packed) means an unfermented but fermentable product which is prepared from juice or Pulp/Puree or concentrated juice or pulp or sound mature fruit. The substan .....

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ct shall meet the following requirements: (i) Total Soluble Solid (m/m) Not less than 10.0 percent (ii) Fruit Juice content (m/m) (a) Lime/Lemon ready to serve beverage Not less than 5.0 percent (b) All other beverage/drink Not less than 10.0 percent ... ... ... ... 52. It is on the record that the contents of food product of 'Appy Fizz' are more than 10%. In Section 94 proceedings the appellant has filed letter of the Government of India dated 28.03.2005 containing the Subject : Opinion .....

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nk. 2. Flavored sweetened aerated waters. The product which contains less than 10% of ..sic.. & vegetable extractives is included in this category. The product is commonly known as soft drink such as Pepsi Cola, Coca Coin etc. 3. Sweetened aerated mixtures containing fruit juice or bits. The product should contain a maximum of 10% of fruit juice or pulp or bits. This category of product technically is same as at serial no.1. 53. Thus, according to the Government of India, Ministry of Food Pr .....

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product Appy Fizz in pet bottles under the category2.3.10 i.e. Thermally Processed Fruit Beverages/Fruit Drink/Ready to serve Fruit Beverages of Food Safety and Standards (Food Product Standards & Food Additives) Regulations, 2011 with name of the food item as Fruit Pulp or Fruit Juice based Drinks for which you are already holding a license. 54. The Committee of the Joint Commissioners while deciding the application under Section 94 has noted the aforesaid orders passed by the Food Safety A .....

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licensed to be manufactured to the appellant cannot be said to be an irrelevant factor while examining the nature and contents of the product. Whether the product is an aerated branded soft drink or can be covered by residuary of clause (5) of Entry 71 is a question on which the manufacture licence, orders issued by Food Safety and Standards Authority of India were relevant facts which were although cited before the Committee of Joint Commissioners but were brushed aside relying on the Kerala H .....

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also before the Committee of Joint Commissioners produced the technical certificates. The Food Safety and Standards (Food Products Standards & Food Additives) Regulations, 2011 in clause 2.3.10 deals with thermally processed fruit beverages/fruit drink ready to serve fruit beverages which has already been extracted above. The appellant has filed a certificate dated 11.06.2015 from the Institute of Chemical Technology. It is useful to refer to the above certificate which is to the following e .....

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d and added nature identical flavouring substances and natural colour. The juice content of APPY FIZZ is 12.7% m/m and Total solids content is 13%. The product is manufactured under FSSAI licence category Ready to Serve fruit beverage/drink. The manufacturing process involves the following steps: 1. Addition of all the ingredients to treated water, except carbon dioxide and making a batch. 2. Thermal Process (Pasteurization) of the product at 950 C for 30 seconds and cooling to 40 C. 3. Purging .....

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ges/Fruit drink/Ready to serve fruit beverage) It is made from apple juice concentrate It compiles with respect to the juice content and solids content percentage which is more than 10required as per the 2310 It mentions CONTAINS APPLE JUICE on the label It is thermally processed beverage It has substances mentioned sicother ingredients appropriate to the product After the Thermal processing the ready sicas required in 2310 Carbon Dioxide is purged in the beverage FRUITS action of preservation t .....

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APPY FIZZ is thermally processed Pasteurization Thermal process is not mentioned in 2330 and 21061 APPY FIZZ are not contain artificial sweetenerscaffeine as allowed in 21061 Carbon dioxide(INS 290/E 290) is mentioned as a Packing gas/propellant/carbonating agent/preservative/foaming agent by CODEX ALIMENTATIRUs and its use is allowed as per GMP. Carbon dioxide along with other preservatives help in extending the shelf life of the product as the product is filed in PET bottles/cans and is not f .....

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Professor, Dept. of Food Engineering & Technology, Institute of Chemical Technology Matunga, Mumbai400 019. 57. The above technical opinion clearly mentioned that carbon dioxide is used for preservation purpose only. Before the Committee of Commissioners the entire process of manufacture of the product was explained along with all relevant orders and certificates of Food Safety Authorities. It was stated that the Experts in their opinions and certifications have mentioned that product is com .....

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rd at page 138Annexure P13, in paragraph 3.1 elaborate process of manufacture was mentioned. 59. Other relevant materials which were part of the clarification application were mentioned in clause 6 which are to the following effect: VI. OTHER RELEVANT MATERIAL (a) Technical opinion dated 28.02.2005 issued by the authority under Fruit Processing Order, 1955 i.e. Director Food & Vegetable Processing Industry working as licensing officer under Fruit Product Order 1955 in ministry of Food Proces .....

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Exhibit I) (c) Technical expert opinion issued by Professor Dr. Uday S. Annapure dated 11.06.2015 classifying the said product as ready to serve Fruit beverage falling under the category of 02.03.2010 of FSSAI Regulation 2011 and specifically stated that Appy Fizz is not Carbonated Water. Exhibit J. (d) Technical Note and Photographs explaining the use of impregnated Carbon Dioxide for the purpose of preservation as well as for the strengthening the wall of PET bottles due to expansion of Carbo .....

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Original Notification SRO 82 of 2006 dated 21.01.2006 and classified the product based on Central Excise Tariff which interalia is based on HSN at Entry no.71 Sr. No.4 as Fruit Juice Based Drink. Copy of the said Notification and White Paper is enclosed herewith as Exhibit M and Exhibit N Colly. (f) The said classification under Entry No.71 sr.No.4 of the product under Kerala VAT remained in Entry No.71 at Sr.5 despite the substitution brought by Notification SRO 119 of 2008 dated 24.01.2008. (C .....

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rs have attained the finality being not challenged by the department. (i) As per subsection( 1A) of Section 94 of Kerala VAT Act, 2003 which interalia contemplates that if the dispute relates to tax rate of a commodity the details of first seller or the manufacturer of such goods in the state as the case may be shall be furnished by the applicant. Accordingly, we are submitting sales tax Assessment order under Tamilnadu VAT Act since the manufacturer is located in Tamilnadu, Exhibit Q. Hence, th .....

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subject matter of consideration before Hon ble High Court. 60. The above materials which were filed by the appellant before the Clarification Authority were relevant materials for understanding the manufacture process and the nature and contents of ultimate product. The expert authority and its opinion which were relied by the appellant were required to be adverted to both by the Clarification Authority as well as by the High Court and we are of the opinion that expert opinion and materials have .....

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td. vs. Collector of Central Excise, Bombay, 1997(89) ELT 16(SC), in paragraph 3 it was laid down: 3. It is not in dispute before us,as it cannot be, that the onus of establishing that the said rings fell within Item 22F lay upon the Revenue. The Revenue led no evidence. The onus was not discharged. Assuming therefore, that the Tribunal was right in rejecting the evidence that was produced on behalf of the appellants, the appeal should, nonetheless, have been allowed. 62. We, thus, conclude that .....

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2003 Section 6(1)(a) from the very beginning included 'aerated branded soft drink'. The inclusion of fruit juice based drinks in Entry 71 clearly proved that fruit juice based drinks were never treated to be included in 'aerated branded soft drinks'. Had fruit juice based drinks were also included in 'aerated branded soft drinks', the State could not have exercised its power under Section 6(1)(d) to include such products in Entry 71. Whether after amendment of Entry 71 by .....

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uit juice based drinks and it is clear that fruit juice based drinks are subsumed in Item No.5 of Entry 71 after its amendment. We have already observed that items which have been grouped under Section 6(1)(a) are all those items where higher tax slab has been fixed looking into the nature of the goods. It is well settled that all tobacco based goods which are now included in Item No.6(1)(a) are dangerous to health, the use of the plastic, polythene etc. which have also adverse effect on the hea .....

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ved by relevant scientific and technical materials that the product in question that is 'Appy Fizz' is a commodity which is fully covered by Item No.5 of Entry 71 as amended by S.R.O. No.119 of 2008. The High Court discarded scientific and expert opinion with regard to manufacturing process and contents of the product. The orders of Food Safety Authority were also discarded which were relevant for considering the nature and contents of product. The adjudication by CESTAT was relevant at .....

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e rate of 14.5%). 64. Now, coming to the appeal arising out of SLP(C)No.9467 of 2016. The appeal has been filed by the Revenue challenging the judgment of learned Single Judge and Division Bench by which direction was issued to the Committee of the Commissioners to decide the application filed by the appellant under Section 94 of Act, 2003. Learned Single Judge has issued directions dated 31st August, 2015 directing the Commissioner of Commercial Taxes to pass orders on the clarification applica .....

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edings recorded under the KVAT Act, or any earlier law, no such question shall be entertained for determination under Subsection (1). Insofar as the issue raised by the respondent through the application before the authority is concerned, there is no order that has already been passed or there is no proceedings recorded as against it which could be treated as a final one. All what has been done is the issuance of notice as noted above as a proposal in relation to the assessment proceedings. The .....

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in an application for clarification by the competent authority under Section 94 of the KVAT Act. 65. The Division Bench did not commit any error in dismissing the appeal and observing that no revisional order of this Court in an earlier proceedings could conclude the issues which could be considered in an application for clarification by the competent authority under Section 94 of Act, 2003. We do not find any error in the judgment of the learned Single Judge as well as of Division Bench and th .....

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50% of the amount involved. (ii) The petitioners are granted four weeks time to remit the amount. (iii)The Appellate Authority shall endeavour to dispose of the appeal as expeditiously as possible. 67. The learned Single Judge has noted about the pendency of SLP(C)Nos.1469798/ 2016 in this Court where classification of the product was under challenge. By this judgment we are also disposing of the Civil Appeals arising out of SLP(C)Nos.1469714698 of 2016. Further proceedings in case of the asses .....

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