TMI Blog2022 (9) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... ilk, classifiable under tariff item 2202 99 30. In similar facts in the case of M/s. Britannia Industries Ltd. [ 2021 (8) TMI 193 - APPELLATE AUTHORITY ADVANCE RULING, TAMILNADU ], it was held that flavoured milk is not classifiable under Tariff Heading 0402/0404 but classifiable under CTH 2202 99 30. Appeal dismissed. - GUJ/GAAAR/APPEAL/2022/18 - - - Dated:- 26-8-2022 - MILIND TORAWANE AND VIVEK RANJAN, MEMBER Present for the appellant : Shri Amal Dave, Advocate At the outset we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act, 2017 and the GGST Act, 2017 ) are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act, 2017 would also mean reference to the corresponding similar provisions in the GGST Act, 2017. 2. The present appeal has been filed under Section 100 of the CGST Act, 2017 and the GGST Act, 2017 by M/s. Vadilal Industries Ltd (hereinafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant also referred to Advance Ruling of Bangalore Authority in case of M/s Karnataka Co-operative Milk Producers Federation Ltd. 6. The Gujarat Authority for Advance Ruling (herein after referred to as the GAAR ), vide Advance Ruling No. GUJ/GAAR/R/05/2021 dated 20.01.2021, inter-alia observed that as per explanatory notes of HSN 0402, the chapter does not cover beverages of milk flavored with cocoa or other substances; product in question merits classification under Chapter Heading 22029930 which was also confirmed in Agenda of 31 st GST Council Meeting (Volume-2) dated 22.12.2018; case laws relied upon by appellant is not applicable to the facts of present case. The GAAR relied upon the judgement in case of M/s Ernakulam Reg.Co-op.Milk Products Union Ltd V/s CCE, Kochi [2009 (236) ELT 329 (Tri-Bang)], M/s Kaira Dist.Coop.Milk Producers Union Ltd V/s UOI [2015 (320) ELT 408 (Guj.)] and on ruling of Tamilnadu Advance Authority in case of M/s Britannia Industries Ltd [2020 (36) GSTL 582 (AAR-GST-T.N.)], ruling of Andhra Pradesh Advance Authority in case of M/s Trumala Milk Products Pvt Ltd [ELT 2020 (32) GSTL 558 (AAR-GST-A.P.)] and ruling of Andhra Pradesh Adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avor being around 8%, they had no jurisdiction to still hold that flavored milk is beverage containing milk or beverage based on milk. Therefore, decision of GAAR is wholly illegal and liable to be set aside. 7.4 The appellant submitted that GAAR bypassed the judgement in cases of Mehsana District Co-operative Milk Producers Union Ltd and M/s Food Specialties Ltd on the basis that above judgments pertained to the classification of skimmed milk/partially skimmed milk/fully skimmed milk and the judgement were rendered under other act and could not be considered for deciding classification under GST Tariff which was clearly erroneous finding as both Central Excise Tariff and GST Tariff are based on HSN and comparison of Chapter 4 of both tariffs clearly shows that scope and coverage of the chapter is absolutely similar. The appellant also submitted that in above judgments, classification of milk is decided and if skimmed milk/partially skimmed milk/fully skimmed milk is classifiable under Chapter 4 even if they contains sugar or other sweetening matters as well as flavors, then the product in question is also classifiable under Chapter 4. 7.5 The appellant submitted that GAAR er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents and then heating at certain temperature followed by filtration, pasteurization and homogenization and then mixing of sugar and various flavors and finally bottling. 11. The appellant, have in their submission stated that their product i.e. flavored milk is milk itself (consisting of 92% of milk and 8% of sugar, flavor etc.) not beverages containing milk and is classifiable under Chapter 0402 instead under Chapter 2202 as held by GAAR. 12. We find that the classification of goods under GST regime has to be done in accordance with the Customs Tariff Act, 1975, which in turn is based on Harmonized System of Nomenclature, popularly known as FISN . The rules of interpretation, section notes and chapter notes as specified under the Customs Tariff Act, 1975 are also applicable for classification of Goods under GST regime. However, once an item is classified in accordance with the Customs Tariff Act, 1975, the rate of tax applicable would be arrived at on the basis of notifications issued under GST by the respective Governments. 13. The appellant have claimed that flavored milk is classifiable under Chapter Heading 0402 of Customs Tariff Act, 1975 which is elaborated below: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocoa or other substances (heading 22.02). Sub-heading Explanatory Note: Sub-Headings 0402.10, 0402.21 and 0402.29: These sub-headings do not cover concentrated milk or cream in the form of paste (sub-headings 0402.91 and 0402.99). 13.1 From the explanatory notes, which is a guide to understand the scope of the entries, it is seen that above heading covers milk as defined in Note 1 to this chapter and means full cream milk or partially/completely skimmed milk. Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 (FSSAI) defines full cream milk, skimmed milk, standardized milk and toned milk as under: 1.2.6 Full Cream Milk means milk or a combination of buffalo or cow milk or a product prepared by combination of both that has been standardised to fat and solids-not fat percentage, given in the table below in 2.1.1:1, by adjustment/addition of milk solids, Full Cream Milk shall be pasteurised. It shall show a negative phosphatase test. It shall be packed in clean, sound and sanitary containers properly sealed so as to prevent contamination. 1.2.19. SKIMMED MILK means the product prepared from milk from which almost a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Beverage containing milk 2202 99 90 Other The explanatory notes as per HSN is as below: (A)... (B) Other non-alcoholic beverages, not including fruit or vegetable juices of heading 2009 This group includes, inter alia: (1) Tamarind nectar rendered ready for consumption as a beverage by the addition of water and sugar and straining. (2) Certain other beverages ready for consumption, such as those with a basis of milk and cocoa. A perusal of the above tariff entries, and explanatory notes of the HSN indicates that beverages with a basis of milk and cocoa which are ready for consumption is covered under tariff item 2209 99 30 as beverage containing milk. Furthermore, on conjoint reading of Chapter heading 0402 and 2202 and relevant explanatory notes, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) ELT 310 (P H)], we find that this judgment is not applicable to present case as the issue to decide was the nature of skimmed milk or partially/full skimmed milk whereas in the present case the issue is to decide the classification of beverage containing milk. 18. Further the appellant in support of their contentions has relied upon the following judgments: i) Dalmia Industries Ltd. [1992(61) ELT 295 (Tribunal)] ii) UOI Vs. Food Specialities Ltd. [1998 (97) ELT 402 (SC)] iii) Gujarat Co-op. Milk Marketing Federation Ltd. [2017 (5) GSTL 351] We find the above case laws are not applicable to the present case of the appellant for the reasons enumerated below: In the case of Dalmia Industries Ltd., the Tribunal held that, Partially skimmed milk powder and skimmed milk powder are different products inasmuch as, the expression skimmed milk powder means completely skimmed milk powder. The product is essentially partially skimmed milk which was sweetened and to which certain additives like vitamins, minerals were added. The product is thus classifiable under sub-heading 0401.19. The said decision of Tribunal was overruled by Larger Bench of Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for classification under GST. 19. The appellant submitted that their product i.e. flavoured milk is milk itself and GAAR erred in classifying it as beverage with a basis of milk or beverage containing milk as milkis, swerve, vio etc (which, apart from milk constitute filtered/carbonated water, citric acid, sugar, flavour, corn syrup, phosphoric acid etc.) can be considered beverages. In this connection, we find that the National Dairy Development Board as seen on their web page https://www.nddb.coop/services/ppd/dairyproducts/beverages holds Flavoured Milk as a Diary based Beverage. The same is given as under: Dairy based Beverages MILK BEVERAGE WITH RAGI A preparation of ragi (finger millet) in milk is a refreshing and satiating drink for older infants, growing kids and adults. NDDB has developed a simple technology for manufacturing milk beverage with ragi for commercial production at the dairy plants. The pasteurised variant of product can be packed using pouch filling machine used for milk. The sterilised variant has a shelf life of 45 days at ambient temperature. WHEY-BASED DRINK Liquid obtained during production of shrikhand, paneer, chhan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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