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TMI Blog2022 (9) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... ny 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. X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006. The appellant also referred to Advance Ruling of Bangalore 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/05/2021 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 31st GST Council Meeting (Volume-2) dated 22.12.2018; case laws relied upon by appellant is not applicable to the facts of present case. The GAAR relied upon the judgement in case of M/s Ernakulam Reg.Co-op.Milk Products Union Ltd V/s CCE, Kochi [2009 (236) ELT 329 (Tri-Bang)], M/s Kaira Dist.Coop.Milk Producers Union Ltd V/s UOI [2015 (320) ELT 408 (Guj.)] and on ruling of Tamilnadu Advance Authority in case of M/s Britannia Industries Ltd [2020 (36) GSTL 582 (AAR-GST-T.N.)], ruling of Andhra Pradesh Advance Authority in case of M/s Trumala Milk Products Pvt Ltd [ELT 2020 (32) GSTL 558 (AAR-GST-A.P.)] and ruling of Andhra Pradesh Advance A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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/partially skimmed milk/fully skimmed milk and the judgement were rendered under other act and 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 of Chapter 4 of both tariffs clearly shows that scope and coverage of the chapter is absolutely similar. The appellant also submitted that in above judgments, classification of milk is decided and if skimmed milk/partially skimmed milk/fully skimmed milk is classifiable under Chapter 4 even if they contains sugar or other sweetening matters as well as flavors, then the product in question is also classifiable under Chapter 4. 7.5 The appellant submitted that GAAR erred in holding that PFA Acts and Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iltration, pasteurization and homogenization and then mixing of sugar and various flavors and finally bottling. 11. The appellant, have in their 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 'FISN'. The rules of interpretation, section notes and chapter notes as specified under the Customs Tariff Act, 1975 are also applicable for classification of Goods under GST regime. However, once an item is classified in accordance with the Customs Tariff Act, 1975, the rate of tax applicable would be arrived at on the basis of notifications issued under GST by the respective Governments. 13. The appellant have claimed that flavored milk is classifiable under Chapter Heading 0402 of Customs Tariff Act, 1975 which is elaborated below: CHAPTER 04 0402 -MILK AND CREAM, CONCENTRATED OR CONTAINING ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by adjustment/addition of milk solids, Full Cream Milk shall be pasteurised. It shall show a negative phosphatase test. It shall be packed in clean, sound and sanitary containers properly sealed so as to prevent contamination. 1.2.19. SKIMMED MILK means the product prepared from milk from which almost all the milk fat has been removed mechanically. 1.2.21 STANDARDISED MILK means cow milk or buffalo milk or sheep milk or goat milk or a combination of any of these milk that has been standardised to fat and solids-not-fat percentage given in the table below in 2.1.1:1 by the adjustment of milk solids. Standardised milk shall be pasteurised and shall show a negative Phosphatase Test. 1.2.24 TONED MILK means the product prepared by a mixture of cow or buffalo milk or both with fresh skimmed milk; or by admixture of cow or buffalo milk or both that has been standardised to fat and solids-not-fat percentage given in the table below in 2.1.1:1 by adjustment of milk solids. It shall be pasteurised and shall show a negative Phosphatase Test. When fat or dry non-fat-milk solids are used, it shall be ensured that the product remains homogeneous and no deposition of solids takes place on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded under Chapter heading 2202. 15. The Customs Tariff adopted for the purposes of GST is aligned to HSN and the arrangement of the products in the Tariff has been done in a schematic manner. The initial Sections/Chapters contain live animals, not processed goods and the later Chapters contain the processed goods. i.e., Section I covers 'Live Animals and Animal Produce' in which Chapter 4 covers 'Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included' and Section IV of the Customs Tariff covers 'Prepared Foodstuffs, Beverages, Spirits And Vinegar, Tobacco And Manufactured Tobacco Substitutes' in which Chapter 22 covers 'Beverages, spirits and vinegar'. From the classification scheme adopted in the Tariff, it can be seen that products in their natural state are classified in the initial chapters and when such products undergoes processes, they are classified in the later chapters. In the present case, flavoured milk is not the natural form of milk but obtained after application of specific processes on the milk, as explained in Para 10. 16. The appellant submitted that GAAR erroneously classified flavoured milk under Chap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f, which had only upto 6 digit entries, unlike the present 8 digit entry (upto tariff item level); further there have been many other changes in the tariff, such as chapter Note 4 to Chapter 4 referred to in these judgments is no longer existing in the Customs Tariff. The case thus does not have any relevance to the present issue as the product involved, and facts of the case and tariff structure are different. Further the Customs Tariff and HSN are presently aligned. In the case of UOI Vs. Food Specialities Ltd., the Hon'ble Supreme Court of India while dismissing the appeal filed by the department held that "The submission of the learned Additional Solicitor General is that the expression 'skimmed milk' also includes 'partially skimmed milk' and for this reason the product should be classified under Heading 0401.13. In the impugned judgment the view taken is that 'partially skimmed milk powder' is a separate marketable commodity from 'skimmed milk powder' and, therefore, it has to be classified under the Heading 0401.19 and not 0401.13 as claimed by the Revenue. In the impugned judgment, detailed reasons are given for rejecting the Revenue's contentions. Apart from referring to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drained off causing great loss of valuable nutrients and adding to the problem of environmental pollution. Two variants of refreshing whey-based beverages which can be useful to dairies generating whey: * Maska whey beverage: This product has been developed using combination of shrikhand (maska) whey, mango pulp and other additives. * Whey-based beverage with spices: It has been developed using combination of Cheese/Paneer whey and Indian spices. Manufacturing process for lactose hydrolysed variant is also available. Manufacturing of whey beverages at a dairy plant requires pasteurisation and packaging facilities only. It can also be manufactured using the existing infrastructure for lassi/chhach, where available. The pasteurised product has a shelf life of 10 days at 8°C or below when packed in polyfilm. FLAVOURED MILK Flavoured milk has sugar, flavouring and colouring added to make it tastier to consume. It is generally manufactured by in-bottle sterilisation or Ultra High Temperature (UHT) processing with aseptic packaging. For larger volumes, some capital investment for specific equipment such as automatic bottle-filler-cum-sealer and rotary bottle steriliser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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