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TMI Blog2022 (3) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... and Malt Cola Fizzy. Ingredients * Water * Sugar * Apple Juice Concentrate (1.9%) [Equivalent to 12.7% Apple Juice Reconstituted] * Carbon Dioxide (INS290) * Acidity Regulators [INS296, INS 331 9iii), INS 330] * Preservatives (INS211, INS224, INS202) * Antioxidant (INS300) * Natural Color (150d) * Added Flavour Manufacturing Process a) Drawing of water from bore well or any other source & then collecting it in food graded Storage tank. b) Then processes shall be undertaken for water treatment wherein water will be passed through pressure sand filter, activated carbon, micron cartridge filter (5 Micron), Reverse Osmosis system, chemical dozer System, ozonisation system & Ultra Violet sterilization system. Then the treated water will be collected in Stainless Steel storage tanks. c) The treated water will be transferred to blending tank for further processing. d) Double-refined sugar will be melted in the said tank with treated water. Melted sugar will be transferred through Stainless Steel pump for further processing. e) Melted sugar shall be passed through sugar filter press, where the suspended impurities (if any) will be removed. The filtered sugar s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sellable and whole margin get eaten up subsequently. That in the above background, the applicant is confused and wishes to seeks the classification of the goods which it proposes to manufacture. 7. The applicant has submitted that to determine the classification of 'Apple Cola Fizzy' and 'Malt Cola Fizzy, referred Chapter 22 "Beverages, spirits and vinegar" of the Customs Tariff and the Chapter heading which is relevant to the product is CTH 2202, reproduced as follows: 2202 WATERS, INCLUDING MINERAL WATERS AND AERATED WATERS, CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER OR FLAVOURED, AND OTHER NON-ALCOHOLIC BEVERAGES, NOT INCLUDING FRUIT OR VEGETABLE JUICES OF HEADING 2009 2202 10 - Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured : 2202 10 10--- Aerated waters 2202 10 20 --- Lemonade 2202 10 90 --- Other - Other : 2202 91 00 -- Non alcoholic beer 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 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fruit Beverages (Canned, Bottled, Flexible Pack And/ Or Aseptically Packed) means an unfermented but fermentable product which is prepared from juice or Pulp/Puree or concentrated juice or pulp of sound mature fruit. The substances that may be added to fruit juice or pulp are water, peel oil, fruit essences and flavours, salt, sugar, invert sugar, liquid glucose, milk and other ingredients appropriate to the product and processed by heat, in an appropriate manner, before or after being sealed in a container, so as to prevent spoilage. 2. The product may contain food additives permitted in these regulations including Appendix A. The product shall conform to the microbiological requirements given in Appendix B. The product shall meet the following requirements:- (i) Total Soluble solid (m/m) Not less than 10.0 percent (ii) Fruit juice content (m/m) (a) Lime/Lemon ready to serve beverage Not less than 5.0 percent (b) All other beverage/drink Not less than 10.0 percent 3. The container shall be well filled with the product and shall occupy not less than 90.0 percent of the water capacity of the container, when packed in the rigid containers. The water capacity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... percentage is more than 10%. iii It is thermally processed beverage. iv After the thermal processing, Carbon Dioxide is purged in the ready Fruit beverage for preservation to create an environment which will help to prevent spoilage during its shelf life. iv It will be mentioned on the label that it contains Apple Juice Concentrate. 15. The applicant on the basis of above submits that their product is a thermally processed fruit beverages/ready to serve fruit beverage complying with category 2.3.10 as per FSSAI Regulations, 2011 having carbon dioxide as an ingredient which is used for preservation purpose only. 16. Food Safety and Standards (Food Products Standards and Food Additives) Regulation, 2011 was amended vide Notification dated 16th August, 2016 wherein the term 'carbonated beverage with fruit juice' has been defined as follows: 2. In the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011, in regulation 2.3, in sub-regulation 2.3.30, relating to 'Carbonated Fruit Beverages or Fruit Drinks', after clause 3, the following clause shall be inserted, namely:- "3A. In case the quantity of fruit juice is below 10.0 per ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 one is "water including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured" and second is in respect of others. Whereas Central Excise Tariff under sub-heading No. 2202 there are specific headings in respect of soya milk, drinks etc. As per the Central Excise Tariff, the waters; including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured are classifiable under subheading No. 2202.10. The drinks based on fruit juice are specifically classifiable under Item No. 2202 90 20 of the Tariff. In the present case, there is no dispute regarding the contents of the product. Revenue is not disputing the certificate given by the Ministry of Food and Processing Industries, New Delhi rather they are relying it in the ground of appeal, and as per the certificate, the product in question contains 23% of apple juice, therefore, we find no infirmity in the impugned order. The appeal is dismissed." 19. That in the above case petitioner filed a certificate of the Institute of Chemical Technology regarding the product and the finding of the court is significant for the case, held as follows: The above tec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice 28% SCHEDULE S.No. Chapter/Heading/Sub-heading/Tariff Item Description of Goods Rate of Goods as Service tax compensation cess (1) (2) (3) (4) 4B. 2202 Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice 12% 24. The applicant submits that on perusal of above it is evident that goods which merits classification under FSSAI Regulation No. 2.3.30 under point 1 or 3A i.e. Carbonated Fruit Beverage or Fruit Drink or Carbonated Beverage with fruit juice have been duly classified under entry 12B of the Notification No. 8/2021-Central Tax (Rate) dated the 30th September, 2021 with rate of tax at 28% and also under entry 4B of notification under Compensation Cess with rate at 12%. 25. The applicant submits that the Hon'ble Supreme Court has clearly classified the similar product (i.e. product similar in manufacturing process of the applicant) as fruit juice based drink in relevant entry of Central Excise Tariff. Thus the rationale for classification of the product under the Indirect Tax tariff is settled by the Court as far the entries with S.No. 48 in Schedule II and S.No. 12 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iple of interpretation of statutes for deciphering mind of law maker - It is attempt to discover intention of legislature from language used by it, keeping in mind, that language is at best imperfect instrument for expression of actual human thoughts - In absence of statutory definition in precise terms, it is construction of words, entries and items in taxing statutes in terms of their commercial or trade understanding, or according to their popular meaning - It operates on standard of average reasonable person who is not expected to be aware of technical details of goods - It is construction in sense that people conversant with subject-matter of statute, attribute to it - Rigid interpretation in terms of scientific and technical meanings is to be avoided - However, when legislature has provided a statutory definition of particular entry, word or item in specific, scientific or technical terms, then, interpretation ought to be in accordance with that meaning and not according to common parlance. [paras 18, 31, 34] 30. The applicant submits that it has been laid down quite clearly that common parlance understanding of a product is an extension of general principle of interpretatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product of the applicant which merits classification 2.3.10 and is not a carbonated beverage but rather is Fruit Juice based Drink and hence is taxable at Entry No 48 GST rates in Tariff Notification No. 01/2017- Central Tax (Rate) with rate of 12%. Question on which Advance Ruling sought 36. What should be the classification and applicable tax rate on the supply of Ready to Serve Fruit Beverage named as 'Apple Cola Fizzy' and 'Malt Cola Fizzy' made by the applicant under Notification No. 1/2017 - CT (Rate) dated 28.06.2017 as amended up to date? Personal Hearing 37. Personal hearing granted on 18-2-22 was attended by Ms. Shuchi Sethi, CA and she reiterated the submission. Revenue's submission 38. Revenue has neither submitted its comments nor appeared for hearing. Findings Part-1: 38. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act 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 same provisions under the GGST Act. 39. We have carefully considered all the submissions made by the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailability of safe and wholesome food for human consumption (url: https://fssai.gov.in/cms/about-fssai.php#) ; and cannot be the factor for determination of the classification of goods under the GST scheme of law and procedure. The issue whether the regulation of other statute can be used for determination of the classification under the different statute, has been addressed by the H'ble Apex Court in the case of Commissioner of Central Excise, New Delhi v. Connaught Plaza Restaurant (P) Ltd. [2012 (286) E.L.T. 321 (S.C.) - para 43]. The H'ble Supreme Court has held that it is a settled principle in excise classification that the definition of one statute having a different object, purpose and scheme cannot be applied mechanically to another statute. The same view was held by Hon'ble High Court of Bombay in the case of Kaira Dist. Co. Op. Milk Producers' Union Ltd. v. U.O.I. [1989 (41) E.L.T. 186 (Bom.) - Paras 7 and 8] 45. We note that the H'ble Delhi High Court in Greatship (India) Ltd. vs UOI- 2016 (338) ELT 545 (del) has held that in Interpretation of statutes, for Conflict of views between two Central Government Ministries -In such case, view taken by Ministry that is primar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --- Soya milk drinks, whether or not sweetened or flavoured 1 2202 20 99 --- Fruit pulp or fruit juice based drinks 1 2202 30 99 --- Beverages containing milk 1 2202 90 99 --- Other 1 49. Now We refer to the Explanatory Notes of Harmonised System of Nomenclature (HSN) for Tariff Heading 2202, reproduced as follows: "22.02 WATERS, INCLUDING MINERAL WATERS AND AERATED WATERS, CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER OR FLAVOURED, AND OTHER NON-ALCOHOLIC BEVERAGES, NOT INCLUDING FRUIT OR VEGETABLE JUICES OF HEADING 20.09. 2202.10 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured 2202.90 Other This heading 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 flavored. 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, flavoure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Rate has been dealt with by the Committee of Secretaries, Fitment Committee in the GST Regime. The observation of the Fitment Committee, which recommended for no change in the prevailing rates under Annexure-III of their recommendations placed for consideration by the GST Council during the 37th Council Meeting held on 20-9-19,is as follows: Annexure III Issues where no change has been proposed by the Fitment Committee in relation to goods S.No. Description HSN Present GST Rate (%) Requested GST rate (%) Comments 52. Carbonated beverage with fruit juice 2202 10 28% + cess 12% as fruit juice 1. Average pre-GST tax incidence on such goods was about 40%. 2. Keeping in view the pre-GST tax rates, the Council has recommended 28% GST rate and 12% Compensation Cess on Aerated waters containing added sugar or other sweetening matter or flavoured (including lemonade) 3. Earlier, the Committee of Secretaries (CoS) in a meeting held on 29-8-2016 did not agree to the proposal of MoFPI to provide concessional rate of excise duty @ 6% for aerated drinks having fruit juice content of not less than 5% procured from domestic manufacturers 4. The issue regarding separate classifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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