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TMI Blog2024 (11) TMI 775X X X X Extracts X X X X X X X X Extracts X X X X ..... on furnished by the Applicant and on the facts and circumstances of the case, we are of the view that the classification 2202 99 20 adopted by the applicant is not correct. Whether the Rate of Tax @12% adopted by the applicant on the above said product is correct? - HELD THAT:- It is clear that the ANTIOXIDANT WATER manufactured by the applicant is nothing but Paan flavored water , wherein Menthol crystals dissolved in propylene glycol is also added as a flavouring additive, for which the CSIR-CFTRI has licensed the applicant to undertake commercial production of the product. Hence, the view of the State Jurisdictional authority that the antioxidant water (i.e. Paan Flavored water) manufactured by the applicant is classifiable under HSN 2201 1010 is not correct, because of the exclusion clause of nor flavoured find place in the goods description under the tariff 2201 of the Customs Tariff Act 1975. The Anti-Oxidant water, i.e., the 'Paan Flavored water', as certified by the CSIR-CFTRI is rightly classifiable under HSN 2202 1090 as All goods (including aerated waters], containing added sugar or other sweetening matter or flavoured, and taxable @ 28%, vide Sl. No 12 to Schedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. 4. In their application for Advance Ruling, the Applicant has stated that - They are manufacturing NATURAL ANTIOXIDANT WATER with natural BETEL LEAF extract and natural AJWAIN extract. They are trained from CSIR-CENTRAL FOOD TECHNOLOGICAL RESEARCH INSTITUTE and are licensed to do Commercial Production from CSIR CENTRAL FOOD TECHNOLOGICAL RESEARCH INSTITUTE. 5. The applicant have attached the following documents along with advance ruling application filed by them. i) Copy of Invoice No. 0002, dated 14.03.2023, issued to SCT Traders for outward supply of Betel Leaf Water (500 ml) and Ajwain Water (500ml). ii) Copy of e-Way Bill dated 14.03.2023, for outward supply of Betel Leaf Water (50.00 CTN) and Ajwain Water (50.00 CTN). iii) Copy of Tax Invoice dated 24.02.2023, issued to Sundar Stores, for Kowshik traders for supply of Maaza. iv) Copy of Order acknowledgement dated 03.03.2023, issued to the Applicant from M/s. Synthite Industries Private Limited for inward supply of Menthol Crystals. v) Copy of Tax Invoice dated 05.01.2023 issued to the Applicant from M/s. Rasayan Trading Co., for Inward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral waters and Aerated waters, not containing added sugar or other sweetening matter nor flavoured, ice and snow-Mineral waters and Aerated waters: Mineral Waters 18% 25-01-2018 01-07-2017 The natural anti-oxidant water which comprises natural vegetable juices and minerals comes under the HSN code 22011010 and it satisfies water including natural mineral water and not containing sugars or other sweetening matter and not flavoured. The Joint Commissioner (ST), Intelligence-I has also furnished the report that there is no proceedings pending or decided on the issue raised in the application by the Applicant. 9. The Additional Commissioner, Office of the Principal Commissioner of GST Central Excise, Chennai-North Commissionerate, No. 26/1, Mahatma Gandhi Road, Chennai 600 034, Reference No. in F. No. GEXCOM/TECH/MISC/2518/2023-TECH Date: 01-02-2024, furnished details of pending proceedings/Comments as detailed below: i) Details of pending proceedings, if any, on the issue raised in the Advance Ruling Application: NIL as per records available with this office. ii) Comments on the issue raised in the Advance Ruling Application: Question on which Advance Ruling is required: 1. We are us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a brief description about the process details of betel leaf/Ajwain water vide mail dated 26/09/2024, as follows: 11.1. Process description The tender preferable dark green betel leaves/Ajwain seeds 1000g are collected and washed in cold water to remove the adhering dirt and mud etc. The washed betel leaves/Ajwain seeds are subjected to size reduction/pasting using a laboratory grinder. Paste (900g) was added to RB flask subjected to Hydro-distillation to obtain 0.5 ml volatile oil. Volatile oil was collected in glass tube and sodium sulphate is added to remove excess water in the oil. Volatile oil (0.5 ml) dissolved in 5 ml of propylene glycol. Menthol (6g) crystals were ground in a pestle and mortar dissolved in 10 ml of propylene glycol. This menthol solution (10 ml) was used as stock solution. 11.2. Process Parameters The process for preparation of Paan flavoured water' is as follows: 1. Extraction of betel oil/ Ajwain seeds through hydro distillation. 2. Preparation of essential oil stock. 3. Dispersing Menthol crystals in propylene glycol and preparing menthol stock. 4. Blending both essential oil and menthol stock 5. Adding the stock solutions to packaged drinking water a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t certain proportions as approved by the Central Food Technological Research Institute ( CFTRI ), Mysuru, are mixed and blended with packaged drinking water as per the process know-how approved by the CFTRI . It is also observed from the certificate issued by the CFTRI that the said technical know-how for the manufacture of said ANTIOXIDANT WATER viz Paan Flavored water have been demonstrated to the applicant and the applicant was also been provided with adequate training in the unit-operations of the process and licensed to undertake commercial production of the product. 12.3. On the above factual matrix, the applicant is before this Authority seeking clarification on the following queries that: 1. We are using HSN 2202 99 20, please confirm which is correct or not correct? 2. We are charging @12% tax for the products manufactured from end, please confirm which is correct or not correct? 12.4. The first query placed before this Authority for determination is Whether the classification of the above said ANTIOXIDANT WATER under HSN 2202 99 20 is correct?' In this regard, we observe from the comments offered by both Central and State jurisdictional authorities that both the autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (%) II 48 2202 99 20 Fruit pulp or fruit juice based drinks [other than Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice] 6% 6% But, owing to the discussions made in the preceding paragraphs, as the product on hand is not classifiable under the Tariff Item 2202 99 20, and accordingly, the rate of tax adopted by the applicant is also not correct. 13.2. The State Jurisdictional Officer classified the product on question under the HSN 2201 1010. With regard to the classification of product by the State Jurisdictional Officer, under the HSN 2201 1010, it is seen that the description of goods pertaining to the said Tariff item 2201 of Customs Tariff Act, 1975, is as follows: Waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured, ice and snow . Whereas, the other jurisdictional authority (Central) has classified the product under the HSN 2202 1090. On perusal of the description of goods under the Tariff item 2202, it is seen that the said Tariff item is comprising of: water, including mineral water and aerated water containing added sugar or other sweetening matter or fla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to M/s. IDYA, No. 88, Canal Road, K.G. Colony, Chennai - 600 010 as per an agreement entered into between the parties, on 04th October, 2021 . Hence, it is clear that the ANTIOXIDANT WATER manufactured by the applicant is nothing but Paan flavored water , wherein Menthol crystals dissolved in propylene glycol is also added as a flavouring additive, for which the CSIR-CFTRI has licensed the applicant to undertake commercial production of the product. Hence, the view of the State Jurisdictional authority that the antioxidant water (i.e. Paan Flavored water ) manufactured by the applicant is classifiable under HSN 2201 1010 is not correct, because of the exclusion clause of nor flavoured find place in the goods description under the tariff 2201 of the Customs Tariff Act 1975. 13.6. In view of the above discussions the Anti-Oxidant water, i.e., the 'Paan Flavored water', as certified by the CSIR-CFTRI is rightly classifiable under HSN 2202 1090 as All goods (including aerated waters], containing added sugar or other sweetening matter or flavoured, and taxable @ 28%, vide Sl. No 12 to Schedule IV of the Notification No 1/2017, Central Tax (Rate) dated 28.06.2017, and compensatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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