9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (9) TMI 255 - AAAR - GSTClassification of goods - Flavoured Milk sold under trade name of Power Sip - classifiable under Chapter 0402 or under Chapter 2202? - HELD THAT - In the present case, as per the product labels submitted by appellant, the Milk constituent is Double Toned Milk which are not Full Cream Milk or Skimmed Milk as per above definitions and Chapter Note 1 explaining the scope of Heading 0402 and therefore are undoubtedly excluded from the purview of Tariff Heading 0402. Therefore, irrespective of the contentions that the product remains Milk even with added flavours, it is clearly established that the Milk referred to in this Tariff heading and the products of the appellant are not the same and on this ground alone the products in hand are not covered under Tariff Heading 0402. NDDB is a nodal agency in the Dairy products and the Flavoured Milk is categorized as Beverage as can be seen above. Further, Beverage as per the Oxford dictionary definition is any type of drink except water . Thus, it becomes evident that the product in hand is a Beverage containing milk, 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.
Issues Involved:
1. Classification of "Flavoured Milk" under GST Tariff. 2. Applicability of previous judgments and standards for classification. 3. Interpretation of tariff headings and explanatory notes. 4. Relevance of FSSAI standards and common parlance understanding. Detailed Analysis: 1. Classification of "Flavoured Milk" under GST Tariff: The appellant sought an advance ruling on the classification of "Flavoured Milk" sold under the trade name "Power Sip." The appellant argued that flavoured milk should be classified under Heading 04029990 of the GST Tariff, asserting that adding flavors to milk does not change its essential character. They contended that flavoured milk is essentially milk and should be classified as such. The Gujarat Authority for Advance Ruling (GAAR) ruled that flavoured milk is classifiable under Chapter Heading 22029930, as a "beverage containing milk." The GAAR relied on explanatory notes of HSN 0402, which exclude beverages of milk flavored with cocoa or other substances from Chapter 4, and include them under Chapter 22. 2. Applicability of Previous Judgments and Standards for Classification: The appellant relied on previous judgments, such as the Punjab and Haryana High Court's decision in Food Specialties Ltd V/s UOI and the CESTAT's ruling in Mehsana District Co-Operative Milk Producers Unions Ltd, which classified skimmed milk and partially skimmed milk under Chapter 4. They argued that these rulings should apply to the classification of flavoured milk under the GST Tariff. The GAAR dismissed these precedents, stating that the cases pertained to the classification of skimmed milk/partially skimmed milk under different acts and could not be applied to GST Tariff classification. The GAAR emphasized that the Customs Tariff and GST Tariff are aligned with the HSN, and the classification of goods under GST must follow the Customs Tariff Act, 1975. 3. Interpretation of Tariff Headings and Explanatory Notes: The appellant contended that flavoured milk should be classified under Chapter 0402, which covers milk and cream, concentrated or containing added sugar or other sweetening matter. They argued that flavoured milk, being almost 100% milk, should not be classified as a beverage under Chapter 22. The GAAR and the Appellate Authority for Advance Ruling (AAAR) held that flavoured milk is excluded from Chapter 4 and included under Chapter 22 based on the explanatory notes. The AAAR noted that the Customs Tariff Act, 1975, and the HSN exclude beverages consisting of milk flavoured with cocoa or other substances from Chapter 0402 and include them under Chapter 2202. The AAAR further explained that the classification scheme in the Tariff aligns natural state products in initial chapters and processed goods in later chapters, supporting the classification of flavoured milk as a processed beverage under Chapter 22. 4. Relevance of FSSAI Standards and Common Parlance Understanding: The appellant argued that flavoured milk is classified as milk under the Prevention of Food Adulteration Rules and the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 (FSSAI). They also contended that in common parlance, flavoured milk is considered milk and not a beverage. The AAAR acknowledged these standards but emphasized that the classification under GST Tariff must follow the Customs Tariff Act and HSN. The AAAR also referred to the National Dairy Development Board's categorization of flavoured milk as a dairy-based beverage, reinforcing the classification under Chapter 2202. Conclusion: The AAAR upheld the GAAR's ruling that flavoured milk is classifiable under Tariff Item 2202 99 30 as a "beverage containing milk." The appeal by the appellant was rejected, and the Advance Ruling No. GUJ/GAAR/R/05/2021 dated 20.01.2021 was upheld.
|
