2000 (8) TMI 321 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the fruit drink "Lipton Tree Top" under the Central Excise Tariff.
2. Validity of re-opening and re-classification of the product.
3. Interpretation of relevant tariff headings and explanatory notes.
4. Applicability of previous tribunal and court decisions.
5. Compliance with the Prevention of Food Adulteration Rules, 1955 and the Fruit Products Order, 1955.

Issue-wise Detailed Analysis:

1. Classification of the Fruit Drink "Lipton Tree Top":
The primary issue was whether the fruit drink "Lipton Tree Top" should be classified under sub-heading 2001.10 as fruit juice or under sub-heading 2202.90 as a non-alcoholic beverage. The appellants argued for classification under 2001.10, citing its earlier approval by the Central Excise Department and the absence of any changes in the manufacturing process or law. However, the Assistant Collector and the Collector (Appeals) classified it under 2202.90, noting that the product contained less than 25% fruit juice, which did not meet the criteria for fruit juice under the Fruit Products Order, 1955.

2. Validity of Re-opening and Re-classification:
The appellants contended that there were no justifiable reasons for re-opening the classification issue, as no new facts had emerged, and the law and manufacturing process remained unchanged. The Assistant Collector, however, cited the Fruit Products Order, 1955, and subsequent analytical reports as reasons for re-classification. The Collector (Appeals) supported this re-classification, referencing the need to correct earlier decisions based on incomplete information.

3. Interpretation of Relevant Tariff Headings and Explanatory Notes:
The tribunal analyzed Heading No. 20.01, which covers fruit juices, and Heading No. 22.02, which includes non-alcoholic beverages but excludes fruit juices of Heading No. 20.01. The tribunal referred to the Harmonized System of Nomenclature (HSN) Explanatory Notes, which clarify that diluted fruit juices with added water and other ingredients are classified under Heading No. 22.02. The tribunal also referenced the Supreme Court's decision in Hamdard (Wakf) Lab. v. Collector of Central Excise, which held that beverages containing fruit juice but not meeting the criteria for fruit juice should be classified under Heading No. 22.02.

4. Applicability of Previous Tribunal and Court Decisions:
The tribunal considered several previous decisions, including:
- Krishna District Milk Producers Union v. Collector of Central Excise, which classified diluted fruit drinks under Heading No. 22.02.
- Kerala Cooperative Milk Marketing Federation Ltd. v. Collector of Central Excise, which classified fruit pulp-based drinks under sub-heading 2202.90.
- Maharashtra Agro Industrial Development Corporation Ltd. v. Collector of Central Excise, which held that ready-to-serve beverages with added water and flavors were classifiable under sub-heading 2202.90.
These decisions supported the classification of "Lipton Tree Top" under Heading No. 22.02.

5. Compliance with the Prevention of Food Adulteration Rules, 1955, and the Fruit Products Order, 1955:
The tribunal noted that the product did not meet the criteria for fruit juice under the Prevention of Food Adulteration Rules, 1955, and the Fruit Products Order, 1955, as it contained less than 25% fruit matter and was prepared by adding water, sugar, and flavors. The product was therefore classified as a fruit beverage or drink, not as fruit juice.

Conclusion:
The tribunal confirmed the classification of "Lipton Tree Top" under sub-heading 2202.90 of the Central Excise Tariff as a ready-to-serve beverage. The appeal was rejected, and the classification by the Collector (Appeals) was upheld based on the detailed analysis of the manufacturing process, relevant legal provisions, and previous judicial decisions.