TMI Blog2023 (11) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... AUTHORITY ADVANCE RULING, TAMILNADU ]? HELD THAT:- Second Schedule to Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 prescribes 6% CGST on goods specified therein. Sl.No.50 to Second Schedule to Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 prescribes 6% CGST on Beverage Containing Milk . Sl.No.50 to Second Schedule to Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 relates to goods under Chapter Heading 2202 90 30 - The impugned recommendation of the GST in its meeting held on 22.12.2018 has concluded that flavoured milk is classifiable under HSN Code 2202 and thereby has suggested that flavoured milk will be liable to tax at 6% CGST. Consequently, flavoured milk will be classifiable under Heading 2202 of HSN. The function of the GST is not to determine the classification under the provisions of the Customs Tariff Act, 1975. The rule of interpretation of 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 - Since, no standalone enactment has been contemplated under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x at 1% with reference to its Maximum Retail Price(MRP) - By Notification No.17/2008-C.E. (N.T.) dated 27.03.2008, special exemption was given to Flavoured Milk of Animal Origin under Section 11C of the Central Excise Act, 1944. It was issued in view of the prevailing trade practice and confusion that prevailed for period between 28.02.2005 and 14.06.2007. The Tribunal in NESTLE INDIA LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI [ 2017 (3) TMI 1409 - CESTAT NEW DELHI ] had held that HSN notes also make it clear that the products would fall under Chapter 1901 only when natural milk constituents are added with other items such as cereal, groats, yeast, etc., or the milk constituent is replaced by another substance such as oleic acid. The Tribunal concluded that addition of small quantity of artificial flavouring substance does not change the essential nature of the product from what is covered under 0404 of the tariff. The test that whether an artificial flavouring substance will not jettison the product from chapter 4 to Chapter 19 is not a relevant test under the GST regime. The rival entries in the Customs Tariff Act, 1975 namely heading 0402 and heading 2202 of the First ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the binding precedent in Commissioner Vs. Amrit Food reported in 2015 (324) ELT 418 (SC) and levy GST accordingly. 4. Relevant portion of the impugned decision of the 3rd respondent GST Council in its Minutes of Meeting dated 22nd December, 2018 classifying flavoured milk under HS Code No. 2202 reads as under:- Sl. No. Description HSN Present GST Rate (%) Requested GST Rate (%) Comments 18. Flavoured Milk 2202 12% Clarification that it is classifiable under Chapter 4 1.The Explanatory Notes to HSN describe the goods classifiable under the heading 0402 as under: This heading covers milk (as defined in Note 1 to this Chapter) and Cream, whether or not pasteurised, sterilised or otherwise preserved, homogenised or peptonised; but it excludes milk and cream which have been concentrated or which contain added sugar or other sweetening matter (hearing 04.02) and curdled, fermented or acidified milk and cream (heading 04.03). The products of this heading may be frozen and may contain the additives referred to in the General Explanatory Note to this Chapter. The heading also covers reconstituted milk and cream having the same qualitative and quantitative composition as the natural pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive composition as the natural products. 2. Flavoured milk is classifiable under HS code 2202. 3. Fitment Committee does not recommend issuance of such clarification. The above also supports the classification of the 'flavoured Milk' under CTH 22029930 6.8 The applicant has relied on the FSSAI regulations and has claimed that the product is a milk and to be classified under CTH 04. We find the classification as available in the Customs Tariff is aligned with the International convention based on Harmonised system of Nomenclature. The product is specifically covered under a specified heading. When this being the fact, there appears to be no relevance to import the ingredients from another legislation/Act. Constitution Bench of the Apex Court in Hari Khemu Gawali v. Deputy Commissioner of Police, Bombay and another [AIR 1956 SC 559], has stated:- It has been repeatedly said by this Court that it is not safe to pronounce on the provisions of one Act with reference to decisions dealing with other Acts which may not be in pari materia. In the light of the above it would not be proper to transplant the provisions of FSSAI Act, which has a different object and purposes, for deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I Regulations, 2011. 9.1 The product in hand is a ready to drink product. The appellant has contended that their product though is ready to drink, it is Milk, being a dairy produce in which additions as admissible under the GMP as allowed under the FSSAI Regulations are only added and has further contended that to be a Beverage , the product should have water as the dominating ingredient. In this connection, we find that the National Dairy Development Board as seen in the page https://www.nddb.coop/services/ppd/dairyproducts/b everages holds Flavoured Milk as a Dairy 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, chhana and cheese is called whey. Whey co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2202 10 and other Non-alcoholic Beverages other than Non-alcoholic Beer under CTH 2202 99. The relevant tariff items are given below : 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 99 90 --- Other The relevant Explanatory Notes as per HSN is as below : (B) Other non-alcoholic beverages, not including fruit or vegetable hikes of heading 20.09. 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. As per HSN Explanatory Notes to Chapter 22, against Note No. (B)(2), Certain other beverages ready for consumption, such as those with a basis of milk and cocoa is specifically mentioned against Chapter sub-heading No. 2202 as Beverages containing milk . In the case at hand, the product after process has attained the character of a beverage being packed in tetra pack having a slot in the packing in which the straw can be inserted. Further perusal of the records ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCLAC Nutritious Milk Drink being a baby milk powder based drink which is not comparable with the product (2) The product in question is essentially milk and deserves to be classified under Chapter 4 - (a) Gujarat Coop Milk Marketing Federation Ltd. v. State of U.P. [ 2017 (5) G.S.T.L. 351 (All.)] - The decision is a VAT case and is on the exemption to be extended based on the wordings of the description the listing of products under VAT laws of U.P. is different from the Tariff Classification. (b) Karnataka Co-operative Milk Producers Federation Ltd. - The decision of AAR has been declared as void ab initio by the appellate authority in the Order No. KAR/AAAR-13/2019-20, dated 11- 2-2020 [ 2020 (34) G.S.T.L. 606 (App. A.A.R. - GST - Kar.)] (c) Deputy Commissioner of Sales Tax (Law), Board of Revenue, Ernakulam v. PIO Food Packers - on Manufacture which is not applicable to the case (3) Flavoured Milk is classified under Chapter 4 - (a) Commissioner of C. Ex. v. Amrit Food [ 2015 (324) E.L.T. 418 (S.C.)] - The facts of the case in the subject case is whether the Milk Shake Mix and soft serve is to be classified under CH : 0404.90 or under CH : 1901.90.90 and the question of classif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Ramavatar Budhaiprasad, ETC Vs. Assistant Sales Tax Officer, Akola and another , [AIR 1961 SC 1325]; (iii) Indian Aluminium Cables Ltd. Vs.Union of India , [1985 (21) E.L.T.3(S.C.)]; (iv) Collector of Customs, Madras Vs. Lotus Inks , [(1997) 10 SCC 29]; (v) CCE Vs. Wood Craft Products Ltd. , [1995 (77) ELT 23 (SC)]; (vi) Indodan Milk Products Ltd., Vs. Commissioner of Sales Tax, U.P ., [(1974) 33 STC 381 (ALL)]; (vii) Commissioner of Central Excise Vs. Amrit Foods , [2015 (324) E.L.T. 418 (S.C.)]; (viii) Nestle India Limited Vs. Commissioner of Central Excise, Delhi , [2017 (6) G.S.T.L. 483 (Tri. Del)]; (ix) Fun Foods Private Ltd., Vs. Commissioner of Central Excise Jaipur , [2017 (348) E.L.T. 357 (Tri. Del)]; (x) Gujarat Coop. Milk Marketing Federation Ltd., Vs. State of U.P. , [2017 (5) G.S.T.L. 351 (ALL.)]; (xi) Nestle India Limited Vs. Commissioner of Central Excise (LTU), Delhi , [2018 (8) G.S.T.L. 211 (Tri. Del)]; (xii) Cavinkare Private Limited Vs. Commissioner of Central Excise , [2019 SCC Online CESTAT 7218]; (xiii) Neulife Nutrition Systems Vs. Commissioner of Central Excise , [2018 SCC Online CESTAT 3722]; (xiv) Commissioner of Customs (Import) Nhavasheva Vs. Neuli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e totally wholly irrelevant. It is submitted that the ratio rendered therein cannot be imported in the context of the classification of goods under the above notification under GST regime. That apart, it is submitted that the issue relating to rate of duty was the subject matter of the Minutes of the Meeting of the GST Council held on 22.12.2018. 17. A request was placed regarding change in the rate of tax and in the said meeting and it was unanimously decided by the GST Council to continue the rate that was fixed at the time of inception vide Sl.No.50 to Second Schedule to Notification No. 1/2017-Central Tax (Rate) dated 28.6.2017. 18. It is further submitted that the 3rd respondent is a constitutional body and the functions of the 3rd respondent are clearly delineated under the Constitution. The function of the 3rd respondent Goods and Service Tax Council cannot be diluted at the behest of the petitioner to reduce the rate of tax, it being policy decision taken by the GST Council in consultation of the all stake holders viz., all the State Government and Union Territories. It is submitted that, Sub-clause (6) of Article 279A of the Constitution states that while discharging the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 985. It is submitted that till 27.2.2005, flavoured milk was specifically classifiable under Tariff Heading 04.01 and under sub-heading 0401 .11 and attracted NIL rate of duty. It is submitted that with effect from 28.2.2005, after 8 digit code system was introduced in the Central Excise Tariff Act, 1985, all the Headings, in the chapters underwent a sea change in tune with Harmonized System of Nomenclature (HSN). 23. The learned counsel for the respondent has also drawn attention to the Notification No.3/2005-CE dated 24.02.2005 as amended by Notification No.28/2007-CE dated 15.06.2007. It is submitted that by an amendment to Notification No.28/2007-CE dated 15.06.2007, Sl.No.11A was inserted and flavoured milk was classified under heading 2202 90 30 and was liable to Nil duty after Tariff was amended. It is submitted that flavoured milk was later liable to tax at 1% vide Notification No.1/2011-CE dated 01.03.2011. 24. The issue of classification that is rate of duty and valuations are normally reserved with the authorities under the Tax Acts/enactments, the Tribunal and the Supreme Court. This is the scheme of the Central Excise Act, 1944 Central Excise Tariff Act, 1985 and the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid Notification attracts 2.5% GST. On the other hand, the 3rd respondent GST Council in the impugned Minutes of the Meeting dated 22.12.2018 has classified Flavoured Milk under Chapter Heading 2202 90 30 of the Customs Tariff Act, 1975. Sl.No.8 to the First Schedule deals with goods falling under Heading 0402 namely Milk and cream, concentrated or containing added sugar or other sweetening matter, including skimmed milk powder, milk food for babies [other than condensed milk] . Sl.No.50 to Second Schedule to Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 prescribes 6% CGST on Beverage Containing Milk . 31. Second Schedule to Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 prescribes 6% CGST on goods specified therein. Sl.No.50 to Second Schedule to Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 prescribes 6% CGST on Beverage Containing Milk . Sl.No.50 to Second Schedule to Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 relates to goods under Chapter Heading 2202 90 30. 32. The impugned recommendation of the GST in its meeting held on 22.12.2018 has concluded that flavoured milk is classifiable under HSN Code 2202 and thereby has sugge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intended for the recommendations of the GST Council to only have a persuasive value, particularly when interpreted along with the objective of the GST regime to foster cooperative federalism and harmony between the constituent units. 171.1.2. Neither does Article 279A begin with a non-obstante clause nor does Article 246A state that it is subject to the provisions of Article 279A. The Parliament and the State legislatures possess simultaneous power to legislate on GST. Article 246A does not envisage a repugnancy provision to resolve the inconsistencies between the Central and the State laws on GST. The recommendations of the GST Council are the product of a collaborative dialogue involving the Union and States. They are recommendatory in nature. To regard them as binding edicts would disrupt fiscal federalism, where both the Union and the States are conferred equal power to legislate on GST. It is not imperative that one of the federal units must always possess a higher share in the power for the federal units to make decisions. Indian federalism is a dialogue between cooperative and uncooperative federalism where the federal units are at liberty to use different means of persuasio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1975 and Central Excise Tariff Act, 1985 could be reduced by the Central Government in public interest by notifications issued under Section 5A of Central Excise Act, 1944 and under Section 25 of the Customs Act, 1962. 37. By Notifications issued under Section 11C of the Central Excise Act, 1944 and under Section 28A of the Customs Act, 1962, by the Central Government could also grant special exemptions on account of trade practice. 38. It will be useful to keep in mind the general scheme of the GST Law. The charging section for levy and collection for supply of goods and service tax is under Section 9 of the respective GST Enactments of 2017. 39. Under section 9(1) of the respective GST Enactments, the maximum rate of tax that can be levied has been capped at 20%. The rate is to be notified by the respective Governments on the recommendation of the GST Council constituted under Article 279-A of the Constitution of India, though the reality the rates are uniform across the country and the rates recommended by the GST Council is uniformly adopted. The Central Rate, State Rates of various States and Union Territories are uniform as tax rates are adopted only on the recommendation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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. 45. Thus, the rule of interpretation of 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. 46. Since, no standalone enactment has been contemplated under the present regime, for rates and for classification of the goods and service , the Parliament and State Legislatures have left it to the wisdom of respective Governments to fix rate of tax under Section 9(1) of respective GST enactments on the recommendations of GST Council. 47. This has been provided to give flexibility to the Governments to ensure that the rates are common all over the country so that both the assesses and customers are clear about the rate of tax. This practice of adoption of classification under the Customs Tariff Act, 1975 (51 of 1975) is similar to the adop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han 40% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included; food preparations of goods of heading Nos. 04.01 to 04.04, not containing cocoa or containing less than 5% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included. - Ghee : Put up in unit containers : 0404.11 - Put up in unit containers and bearing a brand name. 1901.11 For instant use. 0404.19 Other 1901.19 Other 0404.90 Other 1901.91 Malt extract. 1901.92 Food preparations containing malt or malt extract or cocoa powder in any proportion. 1901.99 Other 54. The Hon ble Supreme Court in Commissioner v. Amrit Food 2015 (324) E.L.T. 418 (S.C.) in para Nos.6 to 9 and in para Nos.13 and 14 thus held as under:- 6. Chapter Heading 04.04 deals with other dairy produce; edible products of animal origin not elsewhere specified or included. Thus, all the dairy produce other than those which are specified elsewhere (for example, ice cream is covered by chapter Heading 21) are covered by Chapter Heading 04.04. We would also like to mention here that Heading 04.01 which is the main heading gives the description of goods as : - 04.01 Milk and Cream, conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of stabilizer would make it a food preparation and therefore, it would no more remain diary produce and would be covered under Heading 19.01. 13. Insofar as Chapter Note 4 on which reliance is placed by the learned counsel for the appellant is concerned, we are of the opinion that even that would not advance the case of the appellant. It has to be noted that the description given there is open ended inasmuch as the Chapter Note itself uses the expression inter alia . Further, while mentioning the products which would be covered under the said Chapter Heading 04.04, and stating about the additions which could be made, the crucial words are whether or not . Therefore, the additives which can be added while making the product are illustrative only and merely because stabilizer is not mentioned therein would not mean that after adding the stabilizer the product in question ceases to be dairy produce. 14. In view of the aforesaid, we are of the opinion that the view taken by CESTAT is perfectly in tune with legal position and does not call for any interference. We, thus, do not find any merit in this appeal, which is, accordingly, dismissed. 55. The above case was against the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r deleted by Notification No.15/2011-CE dated 01.03.2011. Eventually, Notification No.03/2005-CE dated 15.06.2007 was later superceded by Notification No.12/2012-CE dated 17.03.2012. Thus, there was no exemption for Flavoured Milk , after the Central Government issued Notification No.15/2011-CE dated 01.03.2011. 60. Flavoured Milk of Animal Origin was however brought within the purview of valuation with reference to its retail price under Section 4A of the Central Excise Act, 1944 by Notification No.49/2008- CE (NT) dated 24.12.2008 as amended by Notification No.11/2011- CE(NT) dated 24.03.2011. Classification of Flavoured Milk continued to be under sub-heading 2202 9030. IN Notification No.49/2008-CE (NT) dated 24.12.2008 as amended by Notification No.11/2011-CE(NT) dated 24.03.2011 the description of Flavoured Milk was again Flavoured Milk of Animal Origin against tariff sub heading 2202 90 30 and was liable to tax at 1% with reference to its Maximum Retail Price(MRP). 61. Though Sl.No.11A to Notification No.03/2005-CE dated 15.06.2007 as inserted by Notification No.28/2007-CE dated 15.06.2007 was deleted by Notification No.15/2011-CE dated 01.03.2011, the trade however continued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. Amrit Food, 2015 (324) ELT 418 (SC) was concerned with the Central Excise Tariff as it stood prior to 28.02.2005. 64. Since, the decision of the Supreme Court in Commissioner of Central Excise versus Amrit Food, 2015 (324) ELT 418 (SC) was rendered in the context of the tariff entry as it stood prior to the amendment the tariff in 2005 with effect from 28.02.2005 as mentioned above, the tests laid down by the Hon'ble Supreme Court Commissioner of Central Excise Vs. Amrit Food, 2015 (324) ELT 418 (SC) cannot be imported for determining the classification of Flavoured Milk after the amendment to the First Schedule to Central Excise Tariff Act, 1985 under the new regime under the respective GST Enactments. 65. Similarly, the decision of the Tribunal in Nestl India Ltd versus Commissioner of Central Excise, New Delhi, 2017 (6) GSTL 483 and Nestl India Ltd versus Commissioner of Central Excise, New Delhi 2018 (8) GSTL 211, which were rendered in the context of classification of milk powder under Tariff Heading 0404, Sub-heading 0404 90 between March 2008 and April 2010 are also of no relevance merely because these two decisions have followed the ratio of the Hon ble Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Ltd versus Commissioner of Central Excise, New Delhi, 2017 (6) GSTL 483 had held that HSN notes also make it clear that the products would fall under Chapter 1901 only when natural milk constituents are added with other items such as cereal, groats, yeast, etc., or the milk constituent is replaced by another substance such as oleic acid. The Tribunal concluded that addition of small quantity of artificial flavouring substance does not change the essential nature of the product from what is covered under 0404 of the tariff. 68. The decision of the Tribunal in Fun Foods Private Limited versus Commissioner of Central Excise , 2017 (348) ELT 357 at best is persuasive and not binding on this Court as this was also rendered in the context of the tariff entry in Central Excise Tariff Act, as it stood prior to amendment in 2005. 69. The decision of the Allahabad High Court in Gujarat Cooperative Milk marketing Federation Limited versus State of U.P 2017 (5) GSTL 351 (All.) was rendered in the context of UP VAT Act, 2004. Section 4 of the UPVAT Act, 2004, exempted few products including milk was excluded. It reads as under:- 21. Section 4 of the Act provides for the exemptions from tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form of milk whether sold in sealed or tinned containers or otherwise as milk is exempt under Section 4 of the Act. 45. Similarly, the notification dated 12-10-1983 is applicable only to soft beverages and not to milk or flavoured milk, Even though technically flavoured milk may be covered under the head soft beverages but that would not make the milk or any of its form taxable in view of Section 4 read with the notification dated 31-1- 1985 which specifically grants exemption to milk and milk products from the taxability. A notification issued under Section 3-A/3-D of the Act cannot override the express provision of Section 4 of the Act which exempts 'milk from the ambit of taxation by covering it under the head of beverages. The notification dated 12-10-1983 cannot override the express provision of Section 4 of the Act to tax the milk or any of its forms except those are specifically excluded which stand exempted in law. 72. In Nue Life Nutrition System Versus Commissioner of Central Excise 2018 SCC online CESTAT 3722, of the Tribunal in the context of whey in Heading 0404 of Tariff is not relevant. The decision once again follows the view of the Hon ble Supreme Court in Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umins (including concentrates of two or more whey proteins, containing by weight more than 80% whey proteins, calculated on the dry matter) (heading 3502) or globulin (heading 3504). 81. Heading 0402 reads as under:- Tariff Item Description of goods (1) (2) Tariff Item Description of goods 0402 0402 10 0402 10 10 0402 10 20 0402 10 90 0402 21 00 0402 29 0402 29 10 0402 29 20 Milk and cream, not concentrated nor containing added sugar or other sweetening matter - In powder, granules or other solid forms of a fat content, by weight not exceeding 1.5%: --- Skimmed Milk ............... --- Milk food for babies ...... --- Other ....................... - In powder, granules or other solid forms of a fat content, by weight not exceeding 1.5%: -- Not containing added sugar or other sweetening matter ... -- Other: --- Whole milk ....... --- Milk for babies 82. Chapter 22 of the Customs Tariff Act, 1975 deals with beverages, spirits and vinegar. Note 3 to Chapter 22 reads as under:- CHAPTER 22 Beverages, spirits and vinegar Note 3 : For the purposes of heading 2202, the term non-alcoholic beverages means beverages of an alcoholic strength by volume not exceeding 0.5% vol. Alcoholic beverages ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milk. 89. The expression used in Sub Heading 2202 90to Customs Tariff Act, 1975 is Beverage Containing Milk . The expression Milk has not been defined in Chapter 22 of the Customs Tariff Act, 1975. Sub-heading 2202 90 of the Customs Tariff Act, 1975 deals with Other Forms of Beverages viz., Non-Alcoholic Beverages. Sub-heading 2202 90 of the Customs Tariff Act, 1975 does not excludes fruit or vegetable juices of heading 2009. 90. Chapter 22 of the Customs Tariff Act, 1975 has also not defined the expression Beverage . The ordinary dictionary meaning of the expression Beverage means any type of Drink . The word Beverage is of French origin, while Drink is of old English origin. 91. The Sub Heading 2202 90 to Customs Tariff Act, 1975 fall under such category Other Non-Alcoholic Beverages . As per Chapter Note 3 to Chapter 22 of the Customs Tariff Act, 1975, the expression Non Alcoholic Beverage means beverages of an alcoholic strength by volume not exceeding 0.5 vol. It reads as under:- CHAPTER 22 Beverages, Spirits and Vinegar Notes : 3. For the purpose of heading 2202, the term non-alcoholic beverages means beverages of an alcoholic strength by volume not exceeding 0.5% vol. Alcoho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... airy Products and analogues. 2.1.1 General Standards for milk and milk products . (e) Milk means the normal mammary secretion derived from complete milking of healthy milch animal, without either addition thereto or extraction therefrom, unless otherwise provided in these regulations and it shall be free from colostrums. 100. Thus, unless otherwise provided, expression milk in subheading 2202 90 30 of the Customs Tariff Act, 1975 cannot include milk secreted from mammary glands of milch animal, diary animals such as cow, goats, buffalo, etc. 79. 101. The provisions of the Food Safety and Standards Act, 2006 and the provisions of the Food Safety Standards (Food Products Standards Food Additives) Regulations, 2011 indicate that all dairy products are to be grouped and classified together. Thus, in the Indian Context all dairy products are to be grouped together. 102. Regulation 2.1.3 of Food Safety Standards (Food Products Standards Food Additives) Regulations, 2011 prescribes the standard for flavoured milk i.e., milk made out milch animal such cattle milk. It reads as under:- 2.1.3 Standard for Flavoured Milk This Standard applies to Flavoured Milk as defined in item 1 of this sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the label of pre-packaged product or otherwise if the product is not pre-packaged, in respect of the product offered for sale: - (i) the class of milk as per General Standard for Milk and Milk Products from which it is prepared; (ii) the heat treatment, as per the General Standard for Milk and Milk Products, to which product has been subjected to; (c) In addition to the labelling requirements mentioned above, the provisions of the Food Safety and Standards (Packaging and Labelling) Regulations, 2011, shall apply to prepackaged products. 7. Method of Sampling and Analysis. The methods of sampling and analysis mentioned in the manuals as specified by the Food Safety and Standards Authority of India from time to time shall be applicable. 103. Regulation 4 of Food Safety Standards (Food Products Standards Food Additives) Regulations, 2011 states that milk and milk products may be enriched with essential nutrients such as vitamins, minerals, etc., as specified in these regulations labelling requirements. It reads as under:- 4. Addition of Essential Nutrients Milk and milk products may be enriched/fortified with essential nutrients such as vitamins, minerals, etc., as specified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2005-CE dated 15.06.2007 as amended from time to time, although Chapter 4 to the Second Schedule to Central Excise Tariff Act, 1985, did not exclude Flavoured Milk made out of dairy milk. Later, Notification No.17/2008-CE dated 27.03.2008 was issued under Section 11C of the Central Excise Act, 1944, whereby Flavoured Milk which was classified under the Sub Heading 2202 90 30 was exempted between 28.02.2005 and 14.06.2007. 112. Though under Notification No.03/2005-CE dated 15.06.2007 as amended by Notification No.28/2007-CE dated 15.06.2007, the Central Government classified Flavoured Milk under Chapter Sub Heading 2202 90 30 and exempted Flavoured Milk vide Notification No.03/2005-CE dated 15.06.2007, Notification No.03/2005-CE dated 15.06.2007 was itself deleted and superseded by Notification No.15/2011-CE dated 01.03.2011. 113. Thereafter, Flavoured Milk was subjected to tax at 1% with reference to its Maximum Retail Price (MRP) under Notification No.49/2008-CE(NT) dated 24.12.2008, issued in terms of Section 4A of the Central Excise Act, 1944. In Notification No.49/2008-CE(NT) dated 24.12.2008, the expression used was Flavoured Milk of Animal Origin . The classification in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siduary item as Non- Alcoholic Beverages under Sub Heading 2202 90 30 of the Customs Tariff Act, 1975. 120. Therefore, the impugned recommendation of the 3rd respondent GST Council cannot be upheld. Classification ought to have been independently determined by the Assessing Officer. 121. Further, the power of the 3rd respondent GST Council is merely recommendatory. It is for the Government to fix appropriate rate on the goods that are classifiable under the Customs Tariff Act, 1975. As long as the Customs Tariff Act, 1975 is adopted for the purpose of interpretation of Notification No.1/2017-CT(Rate) dated 28.06.2017, classification has to be strictly in accordance with the classification under Customs Tariff Act, 1975, irrespective of the fact that concessions were given under the earlier regime by the Central Government under Sections 5 11C and Section 4A of the Central Excise Tariff Act, 1985. 122. While allowing this Writ Petition, I however leave it open for the Government to issue a fresh Notification for amending Entry Nos.8 50 to Notification No.1/2017-CT(Rate) dated 28.06.2017 to tweak the rate of tax, recognizing the well settled principle of law that in taxing matter, la ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
