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TMI Blog2022 (9) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... milk is not the natural form of milk but obtained after application of specific processes on the milk - NDDB being 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. In similar facts of case the Appellate Authority for Advance Ruling, Tamil Nadu, in the case of IN RE: M/S. BRITANNIA INDUSTRIES LIMITED [ 2021 (8) TMI 193 - APPELLATE AUTHORITY ADVANCE RULING, TAMILNADU] , held that flavoured milk is not classifiable under Tariff Heading 0402/0404 but classifiable under CTH 2202 99 30. The appeal filed by appellant M/s. Gujarat Co-operative Milk Marketing Federation Ltd is rejected. - GUJ/GAAAR/APPEAL/2022/17 - - - Dated:- 22-8-2022 - MILIND TORAWANE AND VIVEK RANJAN, MEMBER Present for the appellant : Shri Amal Dave, Advocate At the outset we would like to make it clear that the provisions of the Central. Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act, 2017 and the GGST Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is 3%/4.5%, it is partially skimmed milk classifiable under HSN 0402. Appellant also relied upon decision of CESTAT in case of Mehsana District Co-Operative Milk Producers Unions Ltd [2004 (167) ELT 456] wherein the Tribunal held that Chapter 4 of the Tariff covered all types of milk/milk powder, whether it was whole, partly skimmed or skimmed. The appellant also submitted that National Dairy Research Institute, Banglore also confirmed that flavored milk falls under Dairy produce as per the FSSAI, 2006. The appellant also referred to Advance Ruling of Banglore Authority in case of M/s Karnataka Co-operative Milk Producers Federation Ltd. 6. The Gujarat Authority for Advance Ruling (herein after referred to as the GAAR ), vide Advance Ruling No. GUJ/GAAR/R/04/2021 dated 20.01.2021, inter-alia observed that as per explanatory notes of HSN 0402, the chapter does not cover beverages of milk flavored with cocoa or other substances; product in question merits classification under Chapter Heading 22029930 which was also confirmed in Agenda of 31 GST Council Meeting (Volume-2) dated 22.12.2018; case laws relied upon by appellant is not applicable to the facts of present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme, scope and coverage of Chapter 4 still remains the same and definition of milk has also been retained even under the GST Tariff and therefore flavored milk which admittedly standardized milk (i.e. partly skimmed milk) is classifiable under Chapter 4 only. 7.3 The appellant submitted that when GAAR in para 9 of ruling recorded that product in question consisted of standardized milk (i.e. partially skimmed milk) 92% without removal of fat with sugar, color and flavor being around 8%, they had no jurisdiction to still hold that flavored milk is beverage containing milk or beverage based on milk. Therefore decision of GAAR is wholly illegal and liable to be set aside. 7.4 The appellant submitted that GAAR bypassed the judgement in cases of Mehsana District Co-operative Milk Producers Union Ltd and M/s Food Specialties Ltd on the basis that above judgments pertained to the classification of skimmed milk/partiaq skimmed milk/fully skimmed milk and the judgement were rendered under other act anti could not be considered for deciding classification under GST Tariff which was clearly erroneous finding as both Central Excise Tariff and GST Tariff are based on HSN and comparison o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that product sold by the appellant is milk and not a beverage. FINDINGS :- 9. We have carefully gone through and considered the appeal and written submissions filed by the appellant, submissions made at the time of personal hearing, Advance Ruling given by the GAAR and other material available on record. 10. The main issue here is to decide the classification of the product viz. flavored milk Produced from standardization of fresh milk according to the fat contents and then heating at certain temperature followed by filtration, pasteurization and homogenization and then mixing of sugar and various flavors and finally bottling. 11. The appellant in its submission stated that, their product i.e. flavored milk is milk itself (consisting of 92% of milk and 8% of sugar, flavor etc.) not beverages containing milk and is classifiable under Chapter 0402 instead under Chapter 2202 as held by GAAR. 12. We find that the classification of goods under GST regime has to be done in accordance with the Customs Tariff Act, 1975, which in turn is based on Harmonized System of Nomenclature, popularly known as HSN . The rules of interpretation, section notes and chapter no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng added sugar or other sweetening matter, whether liquid, paste or solid (in blocks, powder of granules) and whether or not preserved or reconstituted. Milk powder may contain small quantities of starch (not exceeding 5% by weight) added, in particular, to maintain the reconstituted milk in its normal physical state. The Heading does not cover: (a) Curdled, fermented or acidified milk or cream (heading 04.03). (b) Beverages consisting of milk flavoured with cocoa or other substances (heading 22.02). Sub-heading Explanatory Note: Sub-Headings 0402.10, 0402.21 and 0402.29: These sub-headings do not cover concentrated milk or cream in the form of paste (sub-headings 0402.91 and 0402.99). 13.1 From the explanatory notes, which is reasonable guide to understand the scope of the entries, it is seen that above heading covers milk as defined in Note 1 to this chapter and means full cream milk or partially/completely skimmed milk. Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 (FSSAI) defines full cream milk, skimmed milk, standardized milk and toned milk as under: 1.2.6 Full Cream Milk means milk or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notes, tariff entry and HSN Explanatory note is given below: CHAPTER 22 Beverages, spirits and vinegar 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 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 30 Beverage containing milk 2202 99 90 Other The explanatory notes as per HSN is as below: (A)... (B) Other non-alcoholic beverages, not including fruit or vegetable juices of heading 2009 This group includes, inter alia: (1) Tamarind necta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he judgments rendered under other act could not be considered for deciding classification under GST Tariff. The said contention of the appellant is not valid and legal. With regard to the judgment in case of Mehsana District Cooperative Milk Producers Union Ltd [2004 (167) ELT 456 (Tri.-Del.)], we find that this case was with regard to classification of skimmed milk powder under heading 0401.13 and with regard to judgment of Hon ble Punjab Haryana High Court in case of M/s Food Specialities Ltd [1991 (51) ELT 310 (P H)], we find that this judgment is not applicable to present case as the issue to decide was the nature of skimmed milk or partially/full skimmed milk whereas in the present case the issue is to decide the classification of beverage containing milk. 18. Further the appellant in support of their contentions has relied upon the following judgments: i) Dalmia Industries Ltd. [1992(61) ELT 295 (Tribunal)] ii) UOI Vs. Food Specialities Ltd. [1998 (97) ELT 402 (SC)] iii) Gujarat Co-op. Milk Marketing Federation Ltd. [2017 (5) GSTL 351] We find the above case laws are not applicable to the present case of the appellant for the reasons enume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Tariff aligned with HSN adopted for classification under GST. 19. The appellant submitted that their product i.e. flavoured milk is milk itself and GAAR erred in classifying it as beverage with a basis of milk or beverage containing milk as milkis, swerve, vio etc (which, apart from milk constitute filtered/carbonated water, citric acid, sugar, flavour, corn syrup, phosphoric acid etc.) can be considered beverages. In this connection, we find that the National Dairy Development Board as seen on their web page https://www.nddb.coop/services/ppd/dairyproducts/beverages holds Flavoured Milk as a Diary based Beverage. The same is given as under: Dairy based Beverages MILK BEVERAGE WITH RAGI A preparation of ragi (finger millet) in milk is a refreshing and satiating drink for older infants, growing kids and adults. NDDB has developed a simple technology for manufacturing milk beverage with ragi for commercial production at the dairy plants. The pasteurised variant of product can be pa6lced using pouch filling machine used for milk. The sterilised variant has a shelf life of 45 days at ambient temperature. WHEY-BASED DRINK Liquid obtained during prod ..... X X X X Extracts X X X X X X X X Extracts X X X X
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