TMI Blog2019 (8) TMI 1219X X X X Extracts X X X X X X X X Extracts X X X X ..... based drinks. Therefore, the said entry would cover the Fruit pulp based drinks or Fruit juice based drinks only. The Fruit juice concentrate based drink are not covered under the said entry. It is not the case of the applicant that the product Fanta Fruity Orange is manufactured from Fruit pulp or Fruit juice as the said product is undisputedly manufactured from Orange Juice Concentrate . Under the circumstances, the said product do not fall under the Tariff Item 2202 99 20. Thus, the product Fanta Fruity Orange would not fall under Tariff Sub Heading 2202 10, but it would fall under Tariff Sub Heading 2202 99. Further, the said product is not a Fruit pulp or fruit juice based drinks , therefore it would not fall under Tariff Item 2202 99 20. The said product is neither Soya milk drinks nor beverage containing milk therefore it would also not fall under Tariff Item 2202 99 10 or 2202 99 30. Therefore, the product Fanta Fruity Orange is appropriately classifiable under Tariff Item 2202 99 90 as Other non-alcoholic beverages, other than tender coconut water and would attract Goods and Services Tax @ 18% as per Sr. No. 24A of Schedule- III of Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.06.2017 (as amended) ? 4.1 The applicant has submitted that the product FANTA FRUITY ORANGE with 10.5% Orange juice, would be classifiable under Tariff Item 2202 99 20 as Fruit pulp or fruit juice based drinks for the reasons given hereunder : 4.2 It is submitted that the product in question is undisputedly covered under tariff heading 2202, which deals with non-alcoholic beverages, other than fruit or vegetable juices, classified under the tariff heading 2009. Customs Tariff heading 2202 is reproduced below Tariff Item Description of goods (1) (2) 2202 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured, and other non-alcoholic beverages, not including fruit or vegetable juices of Heading 2009 2202 10 - Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured: 2202 10 10 --- Aerated Waters 2202 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90 90 Tender coconut water put up in unit container and bearing a registered brand name 50 2202 90 30 Beverages containing milk Schedule - III - 9% 24A. 2202 99 90 Other non-alcoholic beverages [other than tender coconut water] Schedule - IV - 14% 12. 2202 10 All goods [including aerated waters], containing added sugar or other sweetening matter or flavoured 4.4 The applicant referred to Explanation (iii) and (iv) of Notification No. 1/2017Central Tax (Rate) dated 28.06.2017 and 1/2017-State Tax (Rate) dated 30.06.2017 (as amended) and submitted that the Tariff item , sub-heading heading and Chapter shall be looked into by reference to what has been specified in the First Schedule to the Customs Tariff Act, 1975. For interpretation of correct classification of a commodity under the said Notification the rules of Interpretation of Customs Tariff Act including the Section and Chapter Notes and the General Explanatory Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as its base, which is added to the syrupy liquid consisting of water, sugar and other constituents. The percentage of orange juice is 10.5% of the total beverage. It is the active ingredient of the product in question, and imparts the basic attribute to the drink, including its taste and characteristics. Therefore, the product in question will be an orange juice based drink , qualifying as fruit juice based drink under the tariff item 2202 99 20. 4.9 In support of the above interpretation, the applicant placed reliance upon D. Hicks (ed.), Production and Packaging of Non-carbonated Fruit Juices and Fruit Beverages, 1990, Van Nostrand Reinhold, New York, wherein it is stated that the most significant feature of a fruit beverage is not its fruit content but the function for which it is designed and marketed. The fruit is often a dominant ingredient providing its overall character to the drink which cannot be achieved in any other way. 4.10 It is further submitted that the above submission is further amplified on examination of the scope of sub-headings 2202 10 vis- -vis the scheme of heading 2202. It is submitted that the sub-heading 2202 10 covers waters, including aerate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tariff item 2202 99 20 redundant and otiose. Although sub-heading 2202 99 is provided as a residuary entry, it has to be examined in the broader scheme of heading 2202. If tariff item 2202 10 90 is treated to include an orange juice based drink, it would mean that any fruit juice based drink would be susceptible to classification under tariff items 2202 10 90, as being flavoured water, irrespective of the composition, nature and common understanding of the market regarding the nature of the product. This is so because in a broader sense, juice or essence is a flavouring agent, and any beverage based on fruit juice would be classifiable as flavoured water. However, this is evidently not the intention of the scheme of classification under tariff heading 2202, which provides a separate entry for classification of fruit juice based drinks. 4.13 Furthermore, upon a closer examination of the Chapter heading 2202, it can be seen that sub heading 2202 99 20 covers Fruit pulp or fruit juice based drinks within its ambit whereas sub heading 2202 99 30 covers Beverages containing milk . Therefore, it is evident that the intention of the Legislature is to include those beverages under su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted additional written submission on 14.02.2018 along with copy of Test Report dated 08.02.2018, Affidavit of Shri K. Sivraman Nair, Associate Vice President, Quality Assurance Product Integrity of the Company, Certificates issued by Dr. Lombert Rodrigues and Laxminarayan Institute of Technology. 6.1 The Goods and Services Tax, Vadodara I Commissionerate vide letter F.No. IV/16-34/GST/AAR-HINDUSTAN/T/17 dated 15.02.2018, inter-alia submitted that the product is stated to contain 10.5% of the Orange Juice as base; that the said Orange Juice is reconstituted from Orange Juice Concentrate, which is as per label of the product, is 1.6% of the product. The Commissionerate referred to the Regulation No. 2.3.10 of the Food and Standards (Food Products Standards and Food Additives) Regulation, 2011. It has also been submitted that the Hon ble CESTAT has held in the case of Commissioner of Central Excise, Bhopal Versus Parle Agro Pvt. Ltd. [2008 (226) ELT 194 (Tri. Del.)] = 2008 (3) TMI 67 - CESTAT NEW DELHI that the drinks based on fruit juice are specifically classifiable under heading No. 2202 90 20 of the Tariff. The said decision was affirmed by the Hon ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. 10. The tariff heading 2202 of the Customs Tariff, which deals with non-alcoholic beverages, other than fruit or vegetable juices, classified under the tariff heading 2009, is reproduced below Tariff Item Description of goods (1) (2) 2202 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured, and other non-alcoholic beverages, not including fruit or vegetable juices of Heading 2009 2202 10 - Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g authority in para 4.9 of his order that the master mixture used contained authentic aseptic orange juice concentrate and authentic aseptic pineapple concentrate. So also there was orange fruit juice and pineapple fruit juice used in the manufacture of the drinks. 9. Now the question arises is when the imported authentic aseptic concentrate of both kinds were used in the manufacture of the drink and the Tariff Heading 2202.40 requires that the aerated water made out of fruit pulp or fruit juice shall only subscribe to that class, the appellant is entitled to classify its goods under that Tariff Heading. The case of the appellant being admittedly manufacture of the aerated water, (soft drink) with the basis of the concentrates imported and without demonstrating that the base was fruit pulp or fruit juice, it is bound to be classified under the Tariff Heading 2209.99. Had the appellant brought out a clear test report subjecting the goods to chemical test to rule out the allegation of Revenue that the same falls under Tariff Heading 2202.99, it could have a case to fall under tariff heading 2202.40. There was no fruit pulp or fruit juice used in the manufacture of drinks in abse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shri Rajesh Nair, Associate Vice President Quality Assurance Product Integrity, wherein it has been affirmed that during the process of manufacture of Fanta Fruity Orange, Carbon Dioxide equal to 5.148 Grams per Liter (which constitutes 0.5148% of the total beverage) is added; that Carbon dioxide is added to the beverage as a preservative only and not for any other purpose. Therefore, the product Fanta Fruity Orange would not fall under Tariff Sub Heading 2202 10 All goods including aerated waters containing added sugar or other sweetening matter or flavoured . 13. In view of the foregoing discussion, it is apparent that the product Fanta Fruity Orange would not fall under Tariff Sub Heading 2202 10, but it would fall under Tariff Sub Heading 2202 99. Further, it has already been discussed that the said product is not a Fruit pulp or fruit juice based drinks , therefore it would not fall under Tariff Item 2202 99 20. The said product is neither Soya milk drinks nor beverage containing milk therefore it would also not fall under Tariff Item 2202 99 10 or 2202 99 30. Therefore, the product Fanta Fruity Orange is appropriately classifiable under Tariff Item 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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