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TMI Blog2021 (4) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... nage various dairies for production of milk and milk produces like milk, milk powder, cheese, butter, ghee etc. and also for developing the co-operative sector for such products produced by the District Cooperative Unions, the applicant has been advising and assisting such dairies. 3. The applicant submitted that they are also running and managing a dairy called "Amul Fed", which is located at village Bhat in Gandhinagar District. Various milk products, as aforesaid, are produced by the applicant also in this dairy, namely, Amulfed Dairy. By the very nature of the applicant as a Federation, the applicant is helping and assisting the constituent dairies in policy matters like price fixation, product development, marketing of the products and the like. The applicant at AmulFed Dairy has been producing flavored milk under the trade name of Amul Kool/Amul Kool Café. The applicant submitted that such flavored milk is a product meriting classification under Heading 0402, Sub Heading 04029990 of the GST Tariff. 4. The applicant submitted that the process of the flavored milk is standardization of fresh milk according to the fat contents and then heating at certain temperature fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tariff appears to be appropriate. The details of composition and other relevant information are shown on labels of the product also. 4.3 The applicant submitted that flavored milk is made of milk added with sugar and permitted flavors. The reason for adding sugar and flavors is to improve the shelf life and increase the taste. The essential constituent of the milk have not changed even after adding sugar and permitted flavors and still retains its essential character of milk. The product flavored milk is made from milk added sugar and permitted flavors which do not alter its essential character of milk. If the natural constituents of the milk are replaced with any substance, then flavored milk would not fall under chapter 4, but that is not the case here. Chapter 4 of the Tariff inter-alia covers milk and cream. The word "milk" is statutorily defined under Note 1 to Chapter 4, and according to Note 1, the expression "milk" means full cream milk or partially or completely skimmed milk. Heading Nos. 0401 and 0402 would therefore, cover milk, that is to say, full cream milk or partially or completely skimmed milk. 4.4 The applicant further submitted that a reference may be ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kimmed milk containing added sugar is most appropriately classifiable under SH No. 0402/04029990 of the Tariff. 4.6 The applicant further submitted that for classifying the product one has to identify the heading in the chapter where the product could fall and then sub-heading and finally tariff item has to be identified. As there is no other specific Tariff heading in GST which coverers milk and milk products, classifying the same in Chapter 4 is prima facie correct. The applicant states that Chapter 4 provides more specific description, and classification of flavored milk in Chapter 4 is more appropriate for the reason stated above. 5. The applicant submitted that the PFA Standards are also relevant for classifying milk under Chapter 4 of the Tariff. It is required to be appreciated that "flavored milk" is also milk containing flavor and flavored milk is specifically covered under Para A. 11.01.05 of the Prevention of Food Adulteration Rules under the category of milk. It is judicially held [1991 (55) ELT 310- Judgment of Punjab & Haryana High Court] and [1998 (97) ELT 402- Judgment of the Hon'ble Supreme Court] that PFA Standards were relevant for classifying milk under Chapte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling is sought by the applicant. 11. At the outset, we would like to state that the provisions of both the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the GGST Act. 12. We observe that the applicant is running and managing a dairy called "AmulFed" and various flavoured milk products i.e. "Amul Beverages" viz. Badam, Elaichi, Kesar, Rose, Cold Coffee of different flavours viz. Cinamon, Classic, Hazelnut, Milkshakes of different flavours viz. Badam, Mango, Strawberry, Double Chocolate and Vanilla, Sports Drinks and Smoothies of different flavours viz. Chocolate, Mango and Vanilla are produced by the applicant. 13. The facts of the case is that the process of the flavored milk is standardization of fresh milk according to the fat contents and then heating at certain temperature followed by filteration, pasturisation and homogenization and then mixing of sugar and various flavors and finally bottling. The reason for adding sugar and flavors is to improve the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 ---Whole milk 0402 99 20 ---Condensed milk 0402 99 90 ---Other 0404 WHEY, WHETHER OR NOT CONCENTRATED OR CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER; PRODUCTS CONSISTING OF NATURAL MILK CONSTITUENTS, WHETHER OR NOT CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER, NOT ELSEWHERE SPECIFIED OR INCLUDED 0404 10 -Whey and modified whey, whether or not concentrated or containing added sugar or other sweetening matter : 0404 10 10 ---Whey, concentrated, evaporated or condensed, liquid or semi-solid 0404 10 20 ---Whey, dry, blocks and powdered 0404 10 90 ---Other 0404 90 00 -Other The Chapter Note 1 of Custom Tariff Act,1975 is read as under : I. The expression "milk" means full cream milk or partially or completely skimmed milk. The relevant explanatory notes of CTH 04.02 and 04.04as per the HSN is as below: CTH 04.02 04.02 Milk and cream, concentrated or containing added sugar or other sweetening matter (+). 0402.10 -In powder, granules or other solid forms, of a fat content, by weight, not exceeding 1.5% -In powder, granules or other solid forms, of a fat content, by weight, exceeding 1.5% : 0402.21 --Not containing added sugar or other sw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a view to their use in prepared meat products or as additives for animal feed. The heading does not cover: (a) Skimmed milk or reconstituted milk having the same qualitative and quantitative composition as natural milk (heading 04.01 or 04.02). (b) Whey cheese (heading 04.06). (c) Products obtained from whey, containing by weight more than 95% lactose, expressed as anhydrous lactose, calculated on the dry matter (heading 17412). (d) Food preparations based on natural milk constituents but containing other substances not allowed in the products of this Chapter (in particular, heading 19.01). (e) Albumins (including concentrates of two or more whey proteins, containing by weight more than 80% whey proteins, calculated on the dry matter) (heading 35.02) or globulins (heading 35.04). 14.2 From the above, the following are deduce: * 'Milk', to be covered in this chapter are 'full cream milk or partially or skimmed milk' * Beverages consisting of milk flavoured with cocoa or other substances (heading 22.02) are not covered under CTH 0402 * CTH 0404 90 covers fresh or preserved products consisting of milk constituents, which do not have the same composition as the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of "Beverages containing milk" and not of "skimmed milk powder". * Hon'ble Punjab & Haryana High Court in case of Food Specialities Ltd. V/s UOI reported in 1991 (51) ELT 310 (P&H), held that the Indian Standard specifications for milk powder issued by the ISI as well as the Standards under the prevention of Food Adulteration Rules, 1955 were relevant to decide even under the Central Excise Law as to what was skimmed milk or partially skimmed milk or full skimmed milk. The aforesaid judgement is not applicable in the instant Advance Ruling case because the said judgement is with regard to decide the nature of skimmed milk or partially skimmed milk or full skimmed milk whereas in the case at hand is to decide the classification of "Beverage containing milk". Further, the other Act cannot be considered to decide the classification under the GST Tariff which is aligned with Custom Tariff because the purpose and objective of the other Act i.e. PFA (Prevention of Food and Adulteration Act) are different from the Custom Tariff Act. The standards of PFA cannot be considered to decide the classification of any product under GST Act because objective and purpose of both the Act are dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed -Other : 2202.91 --Non-alcoholic beer 2202.99 --Other This headings covers non-alcoholic beverages, as defined in Note 3 to this Chapter not classified under other headings, particularly heading 20.09 or 22.01. (A) Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured. This group includes, inter alia: (1) Sweetened or flavoured mineral waters (natural or artificial). (2) Beverages such as lemonade, orangeade, cola, consisting of ordinary drinking water, sweetened or not, flavoured with fruit juices or essences, or compound extracts, to which citric and or tartaric acid are sometimes added. They are often aerated with carbon dioxide gas, and are generally presented in bottles or other airtight containers (B) Other non-alcoholic beverages, not including fruit or vegetable Juices 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. From the above, it is clear that other non-alcoholi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the brand name Amul Kool/Amul Kool Cafe. 2. Mr. Paresh M. Dave for the petitioners has submitted as under :- 2.1 Earlier under the six digit code system prevailing till 27-02-2005, the flavoured milk made by the petitioners was falling under Entry 0401.11 which read as under :- CHAPTER 4 DAIRY PRODUCE; EDIBLE PRODUCTS OF ANIMAL ORIGIN, NOT ELSEWHERE SPECIFIED OR INCLUDED Notes :- 1. The expression, 'Milk' means full cream milk or partially or completely skimmed milk. 2 ............... Heading No. Sub-heading No. Description of goods Rate of duty (1) (2) (3) (4) 04.01 0401.11 Flavoured milk, whether sweetened or not, put up in unit containers and ordinarily intended for sale. Nil. 2.2 It is submitted that even under the 8 digit code introduced from 28-2-2005, flavoured milk could only fall under Chapter 4 Heading No. 0402, more particularly under sub-heading No. 0402 99 90 reading as under :- CHAPTER 4 DAIRY PRODUCE; BIRD'S EGGS; NATURAL HONEY; EDIBLE PRODUCTS OF ANIMAL ORIGIN, NOT ELSEWHERE SPECIFIED OR INCLUDED Notes :- 1. The expression 'milk' means full cream milk or partially or completely skimmed milk. Tariff Item Description of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified in column (2) of the Table hereto annexed, in the manner and to the extent specified in the corresponding entry in column (3) of the said Table, namely :- Sr. No. Notification No. and date Amendments (1) (2) (3) 1. 3/2005-Central Excise dated the 24th February, 2005 [G.S.R. 95(E), dated the 24th February, 2005] In the said notification, in the Table, after S. No. 11 and the entries relating thereto, the following S. No. and entries shall be inserted, namely :- (1) (2) (3) (4) "11A. 2202 90 30 Flavoured milk of animal origin Nil" 2.6 The basic Notification No. 3/2005-C.E. is a general exemption notification prescribing effective rate for various excisable goods, and it is under this general exemption notification that Sr. No. 11A has been inserted from 15-6-2007 thereby specifying nil rate of duty for flavoured milk of animal origin. As the product in question was classified as flavoured milk under SH No. 0401.11 of the Tariff as it stood till 28-2-2005 and since it is not disputed by the Revenue even at this stage that Amul Kool/Amul Kool Cafe is flavoured milk, the respondents would now treat the goods as chargeable to nil r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilk of animal origin". 2.9 In view of the above Notification, the authority which has issued the show cause notice on 16-4-2007 would simply proceed on the basis of the said classification code given by the Central Government in the Notification dated 15-6-2007 to which the petitioners have already given reply on 10-7-2007. 3. Having heard learned counsel for the petitioners, we are of the view that looking to the subject matter of the controversy raised in the petition, this appears to be an eminently fit case where the petitioners should make a representation to the Central Government. Accordingly, if the petitioners make such a representation within one week from today, it is expected that the Central Government will decide the same as expeditiously as possible and preferably within one month from the date of receipt of the representation. 4. As regards pendency of the proceedings arising from the show-cause notice, it will be open to the petitioners to make a request before the Commissioner of Central Excise to adjourn the hearing suitably so as to await the decision of the Central Government on the representation. We are sure that such a request will be considered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to which stabilizers, flavours, etc. are added - Products being marketed as Thick shakes' and ready for consumption, specifically excluded under Heading 0402 of Customs Tariff Act, 1975, as seen from the Explanatory notes to HSN of the said chapter - Product not lacking any natural milk constituents nor any natural milk constituents added to the product, therefore, not classifiable under Heading 0404 ibid also - Product appropriately classifiable under Tariff Item 2202 99 30 ibid as 'Beverages containing milk' as also clarified by GST Council. [paras 6.4, 6.5, 6.6, 6.7] (ii) Andhra Pradesh Advance Authority in case of M/s. TIRUMALA MILK PRODUCTS PVT. LTD in ELT 2020 (32) G.S.T.L. 558 (A.A.R. - GST - A.P.) has held that, Milk - Flavoured milk - Classifiable under Tariff Item 2202 99 30 of First Schedule to the Customs Tariff Act, 1975 as a "beverage containing milk" under HS Code 2202 - Rate of tax applicable is 12% GST (6% CGST + 6% SGST) under Entry No. 50 of Schedule II to Notification No. 1/2017-C.T. (Rate) as amended. [para 8.6] (ii) Andhra Pradesh Advance Authority in case of M/s. SRI CHAKRA MILK PRODUCTS LLP in ELT 2020 (32) G.S.T.L. 206 (A.A.R. - GST - A.P.) has held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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