TMI Blog2020 (3) TMI 1050X X X X Extracts X X X X X X X X Extracts X X X X ..... l are accordingly set aside. The question of law framed is answered in the negative i.e. in favour of Appellant/Assessee and against the Respondent. Appeal allowed. - VATAP No. 338 of 2019 - - - Dated:- 13-3-2020 - JUSTICE S. MURALIDHAR And JUSTICE AVNEESH JHINGAN Mr.Sandeep Goyal, Advocate, for the Appellant Ms.Mamta S.Talwar, DAG, Haryana ORDER Dr. S. MURALIDHAR , J .: 1.This appeal by the Appellant/Assessee under Section 36 of the Haryana Value Added Tax Act, 2003 ( 'HVAT Act' ) is directed against an order dated 2nd July, 2019 passed by the Haryana Tax Tribunal, Chandigarh ( 'Tribunal' ) in STA No.611 of 2018-19 for the Assessment Year ('AY') 2010-11. 2.Admit. 3.The following question of law is framed for consideration in the present appeal: Whether in facts and circumstances of the case, the Tribunal was justified in holding that the Mango Drink under the brand name Slice sold by the appellant, does not fall under Entry 100D of Schedule-C of the HVAT Act and is therefore exigible to tax @ 12.5% instead of 5%. 4.This Court has heard the submissions of Mr. Sandeep Goyal, learned counsel for the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest on additional demand created for the first time by the RA was leviable from the date of order of the RA and not for any period prior thereto. 10.The contention of the Appellant throughout has been that Slice is a fruit drink the main ingredients of which are mango, water and sugar. According to the Appellant, the mango used in its pulp form gives the drink its flavour and main essence. According to the Appellant, the product is covered under the Entry 100D of Schedule C of the HVAT Act. 11. It is submitted that when there is specific entry which covers the product, there is no occasion to resort to the entry governing 'unclassified items'. Reliance is placed on the decisions of the Supreme Court in HPL Chemicals Ltd. v. CCE (2006) 5 SCC 208 and Dunlop India Madras Rubber Factory Ltd. v. Union of India 1983 (13) ELT 1566 (SC). 12. It is submitted by the Appellant that Slice is not an energy drink. It is pointed out that, invariably, fruit based drinks have higher ratio of water and sugar. Water is used for solubility and sugar for enhancement of taste as well as increasing the shelf life. However, it is essentially a fruit drink. Reliance has also pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the 'concentrate' of such fruit. 16.1 In Edward Keventer Pvt. Ltd. v. Bharat State of Agricultural Marketing Board (supra), the question that arose for consideration was whether the ready to serve beverages like 'Frooti' and 'Appy' fell within the description of 'mango' and 'apple' respectively, specified in the schedule to the Bihar Agricultural Produce Market Act 1960 ('BAPM Act'). In terms of the schedule to the BAPM Act, read with Section 2 (1)(a) thereof, mango and appeal juices are covered under the Items Nos.1 and 13 respectively. The taxing authorities treated both the beverages as a fruit themselves and required the Assessee to pay a fee for marketing such beverages. This was then challenged, unsuccessfully by the Assessee in the High Court. The Assessee then appealed to the Supreme Court. 16.2 The Supreme Court in its judgment first noticed the manufacturing process through which 'Frooti' and 'Appy' were produced. It observed: 4...Frooti and Appy are fruit drinks and manufacturing process of both are cumbersome It is alleged that one of 3 the ingredients of Frooti is mango pulp and not mango ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee was a dealer of a fruit juice-based drink known as 'Appy Fizz' which was classified as fruit juice based drink under a notification issued under Section 6(1)(d) of the Kerala Value Added Tax Act, 2003 ('KVATAct'). The Assessing Authority sought to classify it as an 'aerated branded soft drink' attracting a tax liability 20% whereas the Assessee sought to classify it as 'fruit juice based drink' having a tax liability of 12.5%. The relevant entry 71 read as under: '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.' 17.2 It was held by the Supreme Court that fruit juice-based drinks were never treated as 'aerated branded soft drink' when one examined carefully Section 6 (1)(a) and Section 6(1)(d) of the KVAT Act. It held as under: A bare perusal of Entry 71 as above indicates that the Entry covers nonal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the same have not been excluded either, would come within the inclusive definition of 'processed vegetable or fruit' so as to fall under entry 80 of Part A of the Second Schedule to the Act. That apart, the Government of India has understood 'potato chips' to be a vegetable product for the purpose of classification under the Central Excise Tariff Act. Such understanding has also been reiterated by the Ministry of Food Processing. Therefore, potato chips manufactured and sold by the petitioner-company under the brand name Lays and Uncle Chips would be covered by entry 80 of Part A of the Second Schedule to the Assam Value Added Tax Act, 2003 during the relevant period. 21.For all of the aforementioned reasons, this Court is satisfied that both the RA and Tribunal erred in holding that product in question i.e. 'Slice' is not covered under Entry 100-D of Schedule C to the HVAT Act. The impugned orders of the RA as well as the Tribunal are accordingly set aside. The question of law framed is answered in the negative i.e. in favour of Appellant/Assessee and against the Respondent. 22.The orders of refund of any tax paid in excess by the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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