2018 (9) TMI 1864 - AAAR - GST

Classification of goods - peeled sliced Pineapple, put up in air tight unit container in sugar syrup - Appellant is of the view that during the entire process the basic nature of the 'pineapple' remains unchanged and it is used as 'fresh pineapple' and therefore their product should be classifiable under HSN Code 0804 - HELD THAT - In the instant case the pineapple is peeled and cut into slices, steamed/boiled, cooked and packed in air tight containers in sugar syrup. Hence, the view of the appellant that the basic nature of their product remains unchanged is not acceptable. In the instant case, the sugar is being used as only a sweetener and not as a preservative i.e. for the purpose of preserving the inherent nature of pineapple. Besides, products classifiable under Chapter 20 do not cover fruits which are prepared or preserved by the processes specified in Chapter 8, as per Chapter Note I(a) of Chapter 20 of Customs Tariff. Under Tariff item 0811, the fruits are cooked by steaming or boiling in water, which is also the case with the appellant's product. Under Chapter 20, the products are generally having longer shelf life and the fruits are not clearly identifiable being preparations of fruits, in case of Chapter '8' the goods have a short shelf life, once the can is opened and the fruit i.e. pineapples slices, are clearly identifiable as such. Thus, the product supplied by the appellant is covered under Tariff Item No. 0811 and not under Tariff Item 2008.

Summary

Issues:
Classification of canned pineapple slices under HSN codes 0804 and 0811 for GST purposes.

Analysis:
1. Brief Facts of the Case:
- The appellant sells pineapple slices in sugar syrup packed in airtight containers.
- Appellant sought an Advance Ruling on the HSN classification for their product.
- Appellant argued for classification under HSN Code 0804, claiming exemption under GST notifications.

2. Advance Ruling Order:
- The Uttar Pradesh GST Advance Ruling Authority classified the product under Tariff Item No. 2008, subject to 6% CGST and 6% SGST.

3. Grounds of Appeal:
- Appellant challenged the ruling based on incorrect interpretation, product nature, added sugar content, and preservation considerations.
- Appellant cited legal provisions, rules of interpretation, tribunal judgments, and trade body opinions to support their appeal.

4. Appellate Authority's Discussion:
- Appellant's product involves a detailed manufacturing process involving pineapple preparation and packaging.
- Classification under HSN codes 0804 and 0811 was debated based on the product's characteristics and processing methods.
- Appellant referenced legal precedents and submitted relevant case laws to support their classification argument.

5. Appellate Authority's Finding:
- The Appellate Authority analyzed the product's manufacturing process, legal references, and the nature of the product.
- After thorough examination, the Authority concluded that the product falls under Tariff Item No. 0811, not under 2008 as previously ruled.

6. Order:
- The Appellate Authority modified the previous ruling, classifying the product as "Canned Pineapple Slices dipped in sugar syrup" under Tariff Item No. 0811.

This detailed analysis of the legal judgment showcases the complexities involved in determining the correct classification of goods for GST purposes, considering manufacturing processes, legal provisions, and relevant case laws.