TMI Blog2022 (3) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... izzy appearing in their descriptions. We note that it is a fact that both the goods have been carbonated with carbon di oxide (INS 290). Further, both the goods have INS 211, INS 224, INS 202 as preservatives - carbon di oxide in subject beverages has given them the carbonated effect and the goods are thereby carbonated beverages. The subject goods which consist of water, sugar, sweetener, apple juice concentrate, flavours, aerated with carbon dioxide gas and presented in airtight containers fulfil the criteria to merit consideration for classification at HSN 220210 - also, there is a Tariff item at 22029920 with the description fruit pulp or fruit juice based drinks . Now it is observed that the subject goods having apple juice concentrate 1.9 % [Equivalent to 12.7% Apple Juice Reconstituted] appear to satisfy this description also and prima facie this heading 22029920 cannot be brushed aside as not applicable for subject goods. From reading of Annexure III to the recommendation of the Fitment Committee, it is noted that the Fitment Committee has cited classification of Carbonated beverages with fruit juice at HSN 220210. We, further note that GST Council has approved the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the said tank with treated water. Melted sugar will be transferred through Stainless Steel pump for further processing. e) Melted sugar shall be passed through sugar filter press, where the suspended impurities (if any) will be removed. The filtered sugar syrup will be then passed through Plate type Heat Exchanger (PHE), where the hot syrup shall be brought down to ambient temperature. Further it will be transferred through transfer pump for processing. f) The final sugar syrup will be transferred to blending tank for further processing. Natural fruit juice concentrate, different flavours, colours preservatives of food grade quality are mixed in requisite ratios. g) The mixture shall be then transferred to blending tank for further processing and in the said mixture fruit juice, sugar syrup different flavours/preservatives as mentioned above are mixed with agitator to make the final syrup. h) The final syrup is then transferred through transfer pump for further processing. The same is then transferred to beverage processor, where it is mixed with treated water. i) This ready beverage is transferred for thermal processing to pasteurizer where it is heated at a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Other - Other : 2202 91 00 -- Non alcoholic beer 2202 99 -- Other: 2202 99 10 --- Soya milk drinks, whether or not sweetened or flavoured 2202 99 20 --- Fruit pulp or fruit juice based drink 2202 99 30 --- Beverages containing milk 2202 90 --- Other 8. The applicant submits that Chapter Heading 2202 has been divided into two subheadings, viz. (i) Sub-heading 2202 10 which covers Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured and (ii) Sub-heading 2202 99 which covers other non-alcoholic beverages . Fruit pulp or fruit juice based drinks are specifically covered under Tariff Item No. 2202 99 20 under the sub-heading No. 2202 99 as Other non-alcoholic beverages . Chapter Sub-heading No. 2202 10 covers drinks which are predominantly made up of water, including mineral water and aerated water and are either sweetened or flavoured or both. The applicant submits that drink supplied by them is a Beverage but not Water and hence cannot be classified under 2202 10 which is for Waters. 9. The applicant has submitted that it intends to sell Ready to Serve Fru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) Lime/Lemon ready to serve beverage Not less than 5.0 percent (b) All other beverage/drink Not less than 10.0 percent 3. The container shall be well filled with the product and shall occupy not less than 90.0 percent of the water capacity of the container, when packed in the rigid containers. The water capacity of the container is the volume of distilled water at 20 C which the sealed container is capable of holding when completely filled. 2.3.30 Carbonated Fruit Beverages or Fruit Drinks: 1. Carbonated Fruit Beverages or Fruit Drink means any beverage or drink which is purported to be prepared from fruit juice and water or carbonated water and containing sugar, dextrose, invert sugar or liquid glucose either singly or in combination. It may contain peel oil and fruit essences. It may also contain any other ingredients appropriate to the products. 2. The product may contain food additives permitted in these regulations including Appendix A. The product shall conform to the microbiological requirements given in Appendix B. It shall meet the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gredient which is used for preservation purpose only. 16. Food Safety and Standards (Food Products Standards and Food Additives) Regulation, 2011 was amended vide Notification dated 16th August, 2016 wherein the term carbonated beverage with fruit juice has been defined as follows: 2. In the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011, in regulation 2.3, in sub-regulation 2.3.30, relating to 'Carbonated Fruit Beverages or Fruit Drinks', after clause 3, the following clause shall be inserted, namely:- 3A. In case the quantity of fruit juice is below 10.0 per cent. but not less than 5.0 per cent. (2.5 per cent. in case of lime or lemon), the product shall be called 'carbonated beverage with fruit juice' and in such cases the requirement of TSS (Total Soluble Solids) shall not apply and the quantity of fruit juice shall be declared on the label . 17. The applicant submits that Carbonated Fruit Beverages or Fruit Drinks having characteristics as explained above, having quantity of fruit juice below 10% but not less than 5% shall be called carbonated beverage with fruit juice. The applicant stated that sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Item No. 2202 90 20 of the Tariff. In the present case, there is no dispute regarding the contents of the product. Revenue is not disputing the certificate given by the Ministry of Food and Processing Industries, New Delhi rather they are relying it in the ground of appeal, and as per the certificate, the product in question contains 23% of apple juice, therefore, we find no infirmity in the impugned order. The appeal is dismissed. 19. That in the above case petitioner filed a certificate of the Institute of Chemical Technology regarding the product and the finding of the court is significant for the case, held as follows: 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 commercially and technically distinct from products which have classified as 'aerated branded soft drinks'. The certifications which were relied by the appellant indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice 28% SCHEDULE S.No. Chapter/Heading/Sub-heading/Tariff Item Description of Goods Rate of Goods as Service tax compensation cess (1) (2) (3) (4) 4B. 2202 Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice 12% 24. The applicant submits that on perusal of above it is evident that goods which merits classification under FSSAI Regulation No. 2.3.30 under point 1 or 3A i.e. Carbonated Fruit Beverage or Fruit Drink or Carbonated Beverage with fruit juice have been duly classified under entry 12B of the Notification No. 8/2021-Central Tax (Rate) dated the 30th September, 2021 with rate of tax at 28% and also under entry 4B of notification under Compensation Cess with rate at 12%. 25. The applicant submits that the Hon ble Supreme Court has clearly classified the similar product (i.e. product similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmon and popular meaning of a product to determine the classification of a product, the Hon ble Supreme Court in case of Commissioner v. Connaught Plaza Restaurant (P) Ltd. - 2012 (286) E.L.T. 321 (S.C.) has held that, Classification - Common parlance test - It is extension of general principle of interpretation of statutes for deciphering mind of law maker - It is attempt to discover intention of legislature from language used by it, keeping in mind, that language is at best imperfect instrument for expression of actual human thoughts - In absence of statutory definition in precise terms, it is construction of words, entries and items in taxing statutes in terms of their commercial or trade understanding, or according to their popular meaning - It operates on standard of average reasonable person who is not expected to be aware of technical details of goods - It is construction in sense that people conversant with subject-matter of statute, attribute to it - Rigid interpretation in terms of scientific and technical meanings is to be avoided - However, when legislature has provided a statutory definition of particular entry, word or item in specific, scientific or technical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des the process of carbonation. Hence is classified under FASSAI Regulation No. 2.3.10 which includes Ready to Serve Fruit Beverage and does not include Carbonated Beverages. 35. The applicant has submitted that lastly it has already been held by the Hon ble SC that beverages which merits classification under 2.3.10 under FSSAI regulations are classified under HSN Code 2202 99 20. Thus the product of the applicant which merits classification 2.3.10 and is not a carbonated beverage but rather is Fruit Juice based Drink and hence is taxable at Entry No 48 GST rates in Tariff Notification No. 01/2017- Central Tax (Rate) with rate of 12%. Question on which Advance Ruling sought 36. What should be the classification and applicable tax rate on the supply of Ready to Serve Fruit Beverage named as Apple Cola Fizzy and Malt Cola Fizzy made by the applicant under Notification No. 1/2017 CT (Rate) dated 28.06.2017 as amended up to date? Personal Hearing 37. Personal hearing granted on 18-2-22 was attended by Ms. Shuchi Sethi, CA and she reiterated the submission. Revenue s submission 38. Revenue has neither submitted its comments nor appeared for hearing. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de Section 168 CGST Act, 2017 with the power to issue Instruction or directions as per the GST scheme of law. As per CGST Act and rules framed thereunder, we do not find FSSAI empowered under GST scheme of law to issue directions/ instructions for GST Classification. We hold that the FSSAI has been created for laying down science based standards for articles of food and to regulate their manufacture, storage, distribution, sale and import to ensure availability of safe and wholesome food for human consumption (url: https://fssai.gov.in/cms/about-fssai.php#) ; and cannot be the factor for determination of the classification of goods under the GST scheme of law and procedure. The issue whether the regulation of other statute can be used for determination of the classification under the different statute, has been addressed by the H ble Apex Court in the case of Commissioner of Central Excise, New Delhi v. Connaught Plaza Restaurant (P) Ltd. [2012 (286) E.L.T. 321 (S.C.) - para 43]. The H ble Supreme Court has held that it is a settled principle in excise classification that the definition of one statute having a different object, purpose and scheme cannot be applied mechanically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) (3) 2202 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured, and other nonalcoholic 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 : 220210 10 --- Aerated Waters 1 220220 10 --- Lemonade 1 220290 10 --- Other 1 - Other : 2202 00 91 -- Non-alcoholic beer 2202 99 -- Other : 2202 10 99 --- Soya milk drinks, whether or not sweetened or flavoured 1 2202 20 99 --- Fruit pul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Water, Sugar We find the Tariff 2202 satisfied. 2. Flavoured with fruit juices or essences, or compound extracts. Apple juice concentrate(1.9%) equivalent to 12.7% apple juice reconstituted. We find the Explanatory Notes to HSN 220210 satisfied. 3. Aerated with carbon dioxide gas Carbon dioxide (INS 290) We find the Explanatory Notes to HSN 220210 satisfied. 4. Presented in bottles/ other airtight containers. Goods filled in Pet Bottles We find the Explanatory Notes to HSN 220210 satisfied. 51.1 In pursuance to para 51, we are of the opinion that the subject goods which consist of water, sugar, sweetener, apple juice concentrate, flavours, aerated with carbon dioxide gas and presented in airtight containers fulfil the criteria to merit consideration for classification at HSN 220210. 52. We hold that subject goods, as evidenced from the Table-I at para 51, are carbonated beverages with fruit juice. Further, we, also, do notice there is a Tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant para is reproduced as follows: 34.31 From item Nos. 43 to 57 of Annexure-III, the Council had no objection and approved the recommendation of Fitment Committee. The Hon ble Minister from Uttar Pradesh raised the issue about item at Sl. No. 58 of Annexure III i.e. Extra Neutral Alcohol (ENA). 55. Further, GST council meeting held on 13th Sept. 2021, in the Press Release has issued following clarification: 5. Carbonated Fruit Beverages of Fruit Drink and Carbonated Beverages with Fruit Juice attract GST rate of 28% and Cess of 12%. This is being prescribed specifically in the GST rate schedule. 56. From reading of Annexure III to the recommendation of the Fitment Committee, We note that the Fitment Committee has cited classification of Carbonated beverages with fruit juice at HSN 220210. We, further note that GST Council has approved the recommendation of Fitment Committee. Thus, with this, we infer that competing entries of HSN 220210 and 220299 for subject goods, is answered by the GST Council decision to be 220210 for carbonated beverages with fruit juice. Here we find it apt to reproduce the wordings of H ble Delhi High Court, in the case of Manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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