Posted On by &filed under Customs, Excise and Gold Tribunal - Delhi, Tribunal.


Customs, Excise and Gold Tribunal – Delhi
Godrej Foods Ltd. vs Commissioner Of Central Excise on 3 August, 2000
Equivalent citations: 2000 (121) ELT 231 Tri Del


ORDER

Lajja Ram, Member (T)

1. In this appeal filed by M/s. Godrej Foods Ltd. (Formerly Noble Soya House Ltd.), the matter relates to the classification of the fruit drink marketed under the brand name “Lipton Tree Top” as a ready to serve beverage. The fruit drink was prepared in different fruit flavours – Mango, Apple, Guava and Orange. The appellants had claimed its classification under sub-heading No. 2001.10 of the Central Excise Tairff as fruit juice. The Asstt. Collector of Central Excise, Bhopal was of the view that the correct classfication of the fruit drinks in question was under sub-heading No. 2202.90 of the said Tariff as non-alcoholic beverages. On appeal, the Collector of Central Excise (Appeals), Indore noted that the appellants themselves had called their product as a ready to serve beverage; the percentage of fruit juice was less than 25% in the product while for being treated as a fruit juice according to the Fruit Products Order, 1955, the fruit juice percentage should have been not less than 25%. He held that the product ‘Lipton Tree Top” was correctly classifiable under Heading No. 22.02 of the Central Excise Tariff. He also relied upon the Trade Notice No. 36/90 dated 9-4-1990 of the Bombay Central Excise Collectorate as appearing at 1990 (47) E.L.T. T10. The appeal was rejected.

2. The matter was heard on 5-6-2000 when Shri R. Ravindaran, Advocate and Shri P.K. Mittal, Advocate appeared for the appellants. Shri V.M. Udhoji, JDR represented the respondent/Revenue.

Shri R. Ravindaran, Advocate submitted that the product “Lipton Tree Top” was a preparation of fruit, and its classification under sub-heading No. 2001.10 of the Tariff had been earlier approved by the Central Excise Deptt. Its production was started in August, 1987 but prior to 17-4-1989, there was no dispute, and the goods were being classified under sub-heading No. 2001.10 of the Tariff. Earlier, a show cause notice had been issued on 17-2-1988 with the same allegations as in the show cause notice which is the subject-matter of the present proceedings. He referred to the Order-in-Original dated 29-12-1988, wherein the Asstt. Collector of Central Excise, Bhopal had classified the same goods under Heading No. 20.01 of the Tariff. This order had remained unchallenged. In spite of this, with the same allegations, fresh notice was issued on 4-4-1990 and earlier view was reversed under Order-in-Original dated 12-12-1990. The present show cause notice is dated 8-9-1992, which had been issued after the matter was remanded by the Collector of Central Excise (Appeals) under his order-in-appeal dated 13-5-1991. It was his submission that there were no justifiable reasons for re-opening of the matter. No new facts had come to notice. There was no change in law. There was no change in the process of manufacture.

In reply, Shri V.M. Udhoji, JDR referred to the HSN Explanatory Notes and submitted that according to the HSN Explanatory Notes, the goods in dispute were correctly covered by Heading No. 22.02, and submitted that the HSN Explanatory Notes have great persuasive value. He relied upon the following Tribunal’s decisions :-

(1) Krishna District Milk Producers Union v. Collector of Central Excise -1994 (71) E.L.T. 1026 (Tribunal).

The Tribunal had observed that on going through the process of manufacture of VOL fruit drink and PINAP, it is found that fruit juices of various fruits like, orange, mango, pineapple and guava are diluted to make them to be served as a ready to drink put-up in unit bottles and declared measures. So it is not a mere fruit juice but more than that since with the addition of water and other items, original concentrated juice gets diluted giving it the characteristic of a beverage. The Tribunal added that on going through the process of manufacturing of the above mentioned two items and seeing the description given under Heading No. 22.02, it was clear that even if a beverage contained some quantity of fruit juice that fact by itself will not preclude the classification of an otherwise non-alcoholic beverage from being classified under Heading No. 22.02. The Tribunal held that the Tariff Heading No. 22.02 was more appropriate for the above products.

(2)       Kerala Cooperative Milk Marketing Federation Ltd. v. Collector of Central Excise, Cochin -1999 (112) E.L.T. 191 (Tribunal).
 

The Tribunal had observed that the fruit pulp based drink (Refresh) was classifiable under sub-heading No. 2202.90 of the Tariff by virtue of Explanatory Notes.
 

(3)      Maharashtra Agro Industrial Development Corporation Ltd. v. Collector of Central Excise, Nagpur -1998 (103) E.L.T. 142 (Tribunal).
 

The Tribunal had observed that the ready to serve beverages were not normal fruit juices but were manufactured out of fruit juices by addition of water sweetened or flavoured with essences to which citric acid was added and that such ready to serve beverage, the Tribunal held, were classifiable under sub-heading No. 2202.90 of the tarrif.

The ld. Departmental Representative also referred to the Board’s Clarification as appearing in 1990 (47) E.L.T. (T10) wherein it has been clarified that the products like Frooti, Maaza, etc. were appropriately classifiable as nonalcoholic beverages under Heading No. 22.02 of the Tariff.

He also submitted that in the present proceedings, the classification list was different than those which had earlier been approved. The period of dispute was different. He also submitted that there was no estoppel in taxation matters.

3. The issue for our consideration is the classification of the fruit drink sold under the brand name “Lipton Tree Top”. The appellants have sought its classification as a fruit juice under sub-heading No. 2001.10 of the Central Excise Tariff. Heading No. 20.01 is extracted below:-

  "20.01           Preparations of vegetables, fruit, nuts or other parts of
                 plants including jams, fruit jellies, marmalades, fruit or
                 nut puree and fruit or nut pastes, fruit juices and vegetable
                 juices, whether or not containing added sugar or other
                 sweetening matter.
2001.10          Put up in unit containers and ordinarily intended for sale
2001.90          Other".
 

The Collector of Central Excise (Appeals), Indore had confirmed its classification under sub-heading No. 2202.90 of the Tariff Heading No. 22.02 is extracted below :-
  "22.02         Natural or artificial mineral waters and aerated waters,
               containing added sugar or other sweetening matter or
               flavoured; other non-alcoholic beverages, not including
               fruit or vegetable juices of heading No. 20.01. Natural
               or artificial mineral waters and aerated waters,
               containing added sugar or other sweetening matter
               or flavoured:
2202.11        For each glass bottle containing 200 millilitres or less.
2202.12        For each glass bottle containing more than 200 millilitres
               but not exceeding 250 millilitres.
2202.13        For each glass bottle containing more than 250 millilitres
               but not exceeding 300 millilitres.
2202.14        For each glass bottle containing more than 300 millilitres.
2202.19        Other
2202.90        Other"
 

The product “Lipton Tree Top” was marketed in handy, conveniently consumable laminated carton pack with specified quantity contained therein. The pack was just to be cut to pour or pierced for direct consumption. It was a ready to serve beverage.

According to the appellants, this fruit drink contained fruit pulp/concentrate -15.18% for Mango drink, 19.32% for Apple drink, 15% for Guava Drink and 15.6% for Orange drink. The sugar content was between 13.44% for Apple drink and Orange drink to 14.7% for Mango drink and Guava drink. The water content was about 70%. Diluted juice with adequate sugar and flavours made it a refreshing drink (refer page 61 of the paper book).

According to the Analytical Report dated 12-1-1989 of the Central Food Technological Research Institute, Mysore, total soluble solids at 20°C in the sample pack were 13.6% for Apple drink, 15% for Mango drink, 14.5% for Guava drink and 13.6% for Orange drink. Total sugars expressed as sucrose were 11.57% in Apple drink, 13.55% in Mango drink, 12.8% in Guava drink and 11.6% in Orange drink. It was found by the Research Institute that the samples conformed to the specifications laid down in Fruit Products Order 1955, for ready to serve beverages, (refer page 112 of the paper book).

4. It is seen from the process of manufacture as described by the appellants that in the appellants’ factory, the starting point for the manufacture of the products in question was the Mango Pulp/Mango Pulp Concentrate; Guava Pulp, apple juice concentrate and Orange juice concentrate. These were received in the factory in cans and other containers from the market. Pulp and pulp concentrate were subjected to grinding, homogenisation, etc. The juice concentrate was subjected to re-constitution. The preparation was obtained was blended with sugar, additives and preservatives. Adequate quantity of water was added to make the drink palatable, (refer page 31 of the paper book).

After sterilisation, filling and packing, the fruit drink was marketed as a ready to serve beverage. The processes involved in subjecting the pulp/pulp concentrate and juice concentrate, to obtain the final product – fruit drink -were the processes of manufacture, and a new product known differently than the pulp/pulp concentrate /juice concentrate (from which it was prepared), emerged.

5. The Asstt. Collector of Central Excise, Division-II, Bhopal, who adjudicated the matter observed that the goods in question were not the fruit juices but a preparation which was nothing but ready to serve beverage. In the product the total soluble solids W/W (weight in weight concentration) was more than 10% and the percentage of fruit matter was less than 25%. He referred to the provisions of the Fruit Products Order, 1955 and the Board’s Clarification under Circular No. 8/90 CX 1 dated 19-3-1990 and Circular No. 20/90 CX 6, dated 16-10-1990 and held that the goods in question were classifiable under sub-heading No. 2202.90 of the Central Excise Tariff. He also rejected the preliminary objections of the assessee, with regard to the jurisdiction, res judicata etc.

On appeal, the Collector of Central Excise (Appeals), Indore rejected the objections of the appellants against re-classification and with regard to the earlier Board’s Clarifications. On merits, after analysing the competiting tariff entries, he referred to the provisions of Fruit Products Order, 1955 and the Bombay Collectorate Trade Notice No. 36/90 dated 9-4-1990 as appearing at 1990 (47) E.L.T. (T10). He held that as the fruit matter in the product was less than 25%, it was not classifiable as fruit juice. He confirmed the view taken by the adjudicating authority.

6. Under Heading No. 20.01, fruit juices are covered, while other non- -alcoholic beverages including those which contained fruit juice, were classifiable under Heading No. 22.02. Only fruit juices as such were excluded from the coverage of Heading No. 22.02.

Let us analyse the scope of Heading No. 22.02 of the Tariff.

Chapter 22 is for beverages, Vinegar and spirits. Heading No. 22.02 covers (i) natural or artificial mineral waters and aerated waters containing added sugar or other sweetening matter or flavoured (ii) other non-alcoholic beverages, not including fruit or veg. juices of Heading No. 20.01. Natural or artificial mineral waters and aerated waters containing added sugar or other sweetening matter or flavoured were classifiable under sub-heading Nos. 2202.11, 2202.12 2202.13, 2202.14 and 2202.19. Other non-alcoholic beverages not including fruit or veg. juices of Heading No. 20.01, were classifiable under sub-heading No. 2202.90. The expression “other non-alcoholic beverages” was mentioned as natural or artificial mineral waters and – aerated waters not containing added sugar or other sweetening matter, not flavoured, had already been covered by sub-heading Nos. 2201.11, 2201.12 and 2201.19 of the Tariff. This was to ensure that the goods already classifiable under Heading No. 22.01 are not included under the coverage of Heading No. 22.02.

The expression “not including fruit or veg. juices of Heading No. 20.01” was also to ensure that fruit juices and veg. juices which were already included in the description under Heading No. 20.01 were not to be classified again under Heading No. 22.02 even when they were covered by the broader description of non-alcoholic beverages. The expression “other non-alcoholic beverages” was used for this purpose. In other words, although fruit juices and veg. juices were non-alcoholic beverages, they remained classifiable under heading No. 20.01, and were not to be classified under Heading No. 22.02.

This position has been set at rest by the Apex Court in the case of Ham-dard (Wakfi Lab. v. Collector of Central Excise, Meerut -1999 (113) E.L.T. 20 (SC). In that decision, Sharbat Rooh Afza consisted in the main of an invert sugar base, pineapple juice and distilled extracts of various products. The Supreme Court observed that the beverages broadly speaking are liquids for drinking, other than water, which may be consumed neat or after dilution. It was stated as under :-

“The fact that a beverage includes fruit or veg. juice does not ipso facto exclude it from Heading No. 22.02. Only beverages that contain fruit or veg. juices that fall under Heading No. 20.01 are
excluded from Heading No. 22.02”

The Supreme Court held that such a beverage was classifiable under sub-heading No. 2202.90 of the Tariff.

7. We may also refer to the Harmonised Commodity Description and Coding System (popularly known as HSN – Harmonised System of Nomenclature) Explanatory Notes. Under HSN, the fruit juices and veg. juices were covered by Heading No. 20.09. It was explained in the HSN Explanatory Notes under Heading No. 20.09 that the fruit and veg. juices of this Heading are generally obtained by pressing fresh, healthy and ripe fruits or vegetables. This may be done (as in the case of citrus fruits) by means of mechanical ‘extractors’, operating on the same principle as the household lemon squeezer, or by pressing which may or may not be preceded either by crushing or grinding (for Apples in particular), or by treatment with cold or hot water or with steam (e.g. Tomatoes, black currants and certain vegetables such as carrots and celery).

  20.09     FRUIT JUICES (INCLUDING GRAPE MUST) AND VEGETABLE JUICES;
          UNFERMENTED AND NOT CONTAINING ADDED SPIRIT, WHETHER OR
          NOT CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER (+).
                            Orange juice :
          2009.11           Frozen.
          2009.19           Other.
          2009.20           Grapefruit juice.
          2009.30           Juice of any other single citrus fruit.
          2009.40           Pineapple juice.
          2009.50           Tomato juice.
          2009.60           Grape juice (including grape must).
          2009.70           Apple juice.
          2009.80           Juice of any other single fruit or vegetable.
          2009.90           Mixtures of juices.
 

As regards juices, unfermented and not containing added spirit, see Note 5 to this Chapter.
 

The fruit and vegetable juices of this heading are generally obtained by pressing fresh, healthy and ripe fruit or vegetables. This may be done (as in the case of citrus fruits) by means of “mechanical extractors” operating on the same principle as the household lemon-squeezer, or by pressing which may or may not be preceded either by crushing or grinding (for apples in particular) or by treatment with cold or hot water or with steam (e.g., tomatoes, black currants and certain vegetables such as carrots and celery).

The liquids thus obtained are then generally submitted to the following processes:

(a)        Clarification, to separate the juice from most of the solids, by means of clarifying substances (gelatin, albumin, infusorial earth, etc.) or of enzymes, or by centrifuging.
 

(b)       Filtration,   often   by   means   of   filter   plates   faced   with kieselguhr, asbestos, cellulose, etc.
 

(c)        De-aeration, to eliminate oxygen which would spoil the colour and flavour.
 

(d)       Homogenisation, in the case of certain juices obtained from very fleshy fruits (tomatoes, peaches, etc.).
 

(e)        Sterilisation, to prevent fermentation. Various methods may be   employed,   for  example  pasteurisation   (prolonged   or "flash"), electric sterilisation in machines fitted with electrodes, sterilisation by filtration, preservation under pressure using carbon dioxide, refrigeration, chemical sterilisation (e.g., by means of sulphur dioxide, sodium benzoate), treatment with ultra-violet rays or ion exchangers.
 

As a result of these various treatments the fruit or vegetable juices may consist of clear, unfermented liquids. Certain juices, however (in particular those obtained from pulpy fruits such as apricots, peaches and tomatoes) still contain part of the pulp in finely divided form, either in suspension or as a deposit.

The heading also includes juices, relatively few in practice, obtained from dried fruits provided that they are of a kind which contain juice when fresh. One example is “prune juice”, extracted from prunes by heating with water for several hours in diffusers. The heading does not, however, cover the more or less liquid products obtained by the heating in water of fresh or dried fruits (e.g. juniper berries, rose hips) which contain practically no juice; such products are generally classified in heading 21.06.

The juices of this heading may be concentrated (whether or not frozen) or in the form of crystals or powder provided, in the latter case, that they are entirely or almost entirely soluble in water. Such products are usually obtained by processes involving either heat (whether or not in a vacuum) or cold (lyophilisation).

Provided they retain their original character, the fruit or vegetable juices of this heading may contain substances of the kinds listed below, whether these result from the manufacturing process or have been added separately.

(1) Sugar

(2) Other sweetening agents, natural or synthetic, provided that the quantity added does not exceed that necessary for normal sweetening purposes and that the juices otherwise qualify for this heading, in particular as regards the balance of the different constituents [see Item (4) below].

(3)        Products added to preserve the juice or to prevent fermentation (e.g., sulphur dioxise, carbon dioxide, enzymes).
 

(4)        Standardising agents (e.g., citric acid, tartaric acid) and products added to restore constituents destroyed or damaged during the manufacturing process (e.g., vitamins, colouring matter), or to "fix" the flavour (e.g., sorbitol added to powdered or crystalline cirtus fruit juices). However the heading excludes fruit juices in which one of the constituents (citric acid, essential oil extracted from the fruit, etc.) has been added in such quantity that the balance of the different constituents as found in the natural juice is clearly upset; in such case the product has lost its original character.
 

The vegetable juices of this heading may also contain added salt (sodium chloride), spices or flavouring substances.
 

Similarly, inter-mixtures of the juices of fruits or vegetables of the same or different types remain classified in this heading as do reconstituted juices (i.e., products obtained by the addition, to the concentrated juice, of a quantity of water not exceeding that contained in similar non-concentrated juices of normal composition).

However the addition of water to a normal fruit or vegetable juice, or the addition to a concentrated juice of greater quantity of water than is necessary to reconstitute the original natural juice, results in diluted products which have the character of beverages of heading 22.02. Fruit or vegetable juices containing a greater quantity of carbon dioxide than normally present in juices treated with that product (aerated fruit juices), and also lemonades and aerated water flavoured with fruit juice are also excluded (heading 22.02).

It is made clear in these Explanatory Notes that the re-constituted juices remain classified in Heading No. 20.09. The re-constituted juices are the products obtained by the addition to the concentrated juice of a quantity of water not exceeding that contained in similar non-concentrated juices of normal composition. It is made clear that the addition of water to a normal fruit or veg. juice or the addition to a concentrated juice of a greater quantity of water than is necessary to re-constitute the original natural juice results in diluted products which have the character of beverages and that such beverages are classifiable under Heading No. 22.02.

Sub-heading No. 2202.10 of the HSN specifically covers beverages ready for consumption, if they were not classified under other headings. It corresponds to sub-heading No. 2202.90 of the Central Excise Tariff. Under sub-heading No. 2202.90 non-alcoholic beverages which are not included within the description of fruit or veg. juices of Heading No. 20.01 were covered. It is made clear by the HSN Explanatory Notes that when not in concentrated form or in the form of crystals or powder, fruit juices of normal composition were classifiable under Heading No. 20.01.

The process of manufacture has been described above and it is clear that the product in question were No. fruit juice of No. mal composition. It had water much more than necessary to re-consititute the original natural juice.

The Hon’ble Supreme Court in the case of Collector of Central Excise, Shillong v. Wood Craft Products -1995 (77) E.L.T. 23 (S.C.) had held that any dispute relating to tariff classification is to be resolved with reference to the Nomenclature indicated by the HSN and not in accordance with the definition of a term in ISI Glossary. Para 18 from that decision is extracted below :-

“18. We are of the view that the Tribunal as well as the High Court fell into the error of overlooking the fact that the structure of the Central Excise Tariff is based on the internationally accepted nomenclature found in the HSN and, therefore, any dispute relating to tariff classification must, as far as possible, be resolved with reference to the nomenclature indicated by the H.S.N. unless there be an express different intention indicated by the Central Excise Tariff Act, 1985 itself. The definition of a term in the ISI Glossary, which has a different purpose, cannot, in case of a conflict, override the clear indication of the meaning of an identical expression in the same context in the HSN. In the HSN, black board is included within the meaning of the expression “similar laminated wood” in the same context of classification of black board. Since the Central Excise Tariff Act, 1985 is enacted on the basis and pattern of the HSN, the same expression used in the Act must, as far as practicable, be construed to have the meaning which is expressly given to it in the HSN when there is no indication in the Indian Tariff of a different intention.”

8. Undoubtedly, the product “Iipton Tree Top” is a beverage ready to serve beverage. In common parlance, the expression “beverage’ is a drink which is consumed mainly for its thirst quenching property/refreshing properties or for its stimulating effect.

Beverage has been defined in “The Random House Dictionary of the
English Language” as:

“A drink of any kind, other than water such as tea, coffee, beer, milk, etc.” In “Encyclopaedia Britannica (Mycropedia)”, page 1095, it has been described thus:

In “Encyclopaedia Britannica (Mycropedia)”, page 1095, it has been described thus:

“Liquid prepared for human consumption including types made by an infusion such as tea and coffee, fruit juices and other juices exracted from plants, such carbonated drinks as ginger ale and root beer, and alcoholic beverages, including wine, made by a fermentation process, and distilled liquor, requiring both fermentation and distillation.”

In “Words and Phrases”; Vol. 5, “beverage” has been defined :

“Beverage in its common meaning signified liquid designed for drinking by human beings.”

[Refer Allahabad High Court’s decision in the case of Nauneet Food Industries v. Commissioner of Sales Tax -1982 (50) STC 380 (Allahabad).

It is seen that the Dictionary meaning of the word “beverage” is very wide. It extends to drink of any kind except water.

Fruit juice is also a beverage but the issue for consideration is whether the product in question is the fruit juice for the purpose of classification under sub-heading No. 2001.10.

According to Preservation of Food Adulteration Rules, 1955, fruit beverage or fruit drink means any beverage or drink which is purported to be prepared from fruit juice and water, or carbonated water, and containing sugar, dextrose, invert sugar or liquid glucose either singly or in combination and with or without –

(a)          water, peel-oil, fruit essences and flavours;
 

(b)   citric acid, ascorbic acid;
 

(c)   permitted preservatives and colours.
 

The total soluble solids w/w in the final product shall be not less than 10 per cent and the minimum percentage of fruit juice in the final product shall be not less than 5.0 per cent w/w.
 

On the other hand, the fruit juice is the un-concentrated juice with or without the addition of certain specified ingredients. In para A. 16.01 of the Appendix ‘B’ to the Prevention of Food Adulteration Act, 1954, the fruit juice has been defined as under :-

“A.16 – “Fruit Juice” means the unfermented and unconcentrated liquid expressed from sound ripe fresh fruit, and with or without –

(a) sugar, dextrose, invert-sugar, or liquid glucose, either singly or in combination.

(b) water, peel oil, fruit essences and flavour, common salt, ascorbic acid, citric acid [tartaric acid and malic acid] and preservative.

The acidity of the finished product calculated as citiric acid shall not be less than 4 per cent in the case of pure lemon juice or pulp and not less than 5 per cent in the case of pure lime juice but shall not exceed 3.5 per cent in the case of other juice. The total soluble solids for sweetened fruit juice (except tomato juice) shall not be less than 10 per cent.

It may also contain permitted emulsifying and stabilizing agents as prescribed in Rule 61-C It may also contain fumeric acid (food grade) or Quick Dissolving Fumaric Acid certified by Bureau of Indian Standard to the extent of 0.3 per cent by weight.”

Similarly in Part-II of Fruits Products Order, 1955, it has been provided that the fruit juice shall be un-concentrated liquid product expressed from ripe fruit and may contain portions of the pulp and other cellular matter natural to the fruit.

As we have seen above, the product in question was prepared from the pulp or juice and was not fruit juice as per the Prevention of Food Adulteration Rules, 1955 and the Fruits Products Order 1955.

9. The Departmental Representative had referred to the Tribunal’s decision in the case of Krishna District Milk Producers Union v. Collector of Central Excise -1994 (71) E.L.T. 1026 (Tribunal). In this decision, the classification of fruit drink was under consideration. The fruit juices of various fruits like Orange, Mango, Pineapple and Guava were diluted to make them to be served as a ready to drink put-up in unit bottles and declared measures. The Tribunal held that the drink in question was not a mere fruit juice but more than that since with the addition of water and other ingredients, original concentrated juice gets diluted giving it the characteristic of a beverage (refer para 7).

In the order recorded by the Third Member in para 26, it was stated that when water was added to the concerned fruit juice, the fruit drink so produced could not be considered a fruit juice falling under Heading No. 20.01 in view of the HSN Explanatory Notes and therefore, Tariff Heading No. 22.02 was appropriate for the products VOL fruit drink and Pin up.

Reference has also been made to the Tribunal’s decision in the case of Kerala Cooperative Milk Marketing Federation Ltd. v. CCE, Cochin – 1999 (112) E.L.T. 191 (Tribunal) wherein the Tribunal had held that the fruit pulp based drink were classifiable under sub-heading No. 2202.90 of the Tariff.

We may also refer to the Tribunal’s decisions in the case of (1) Noble Soya House Ltd. v. Collector of Central Excise -1993 (66) E.L.T. 627 (Tribunal), (2) Amrit Protein Ltd. v. Collector of Central Excise – 1995 (80) E.L.T. 856 (Tribunal), and (3) Collector of Central Excise, Nagpur v. Dinshaw Frozen Foods – 1999 (106) E.L.T. 340 (Tribunal).

In the case of Noble Soya House Ltd., the Tribunal had held that the soya milk based beverage manufactured from soya milk with addition of sugar, flavours etc. was classifiable under sub-heading No. 2202.90. In the case of M/s. Amrit Protein Ltd., the Tribunal confirmed the view taken in Noble Soya House Ltd. and held that the soya products sold under different brand names by M/s. Amrit Protein Ltd. with sugar additives, fruit pulp etc. were non-alcoholic beverages classifiable under sub-heading No. 2202.90. In the case of Collector of Central Excise, Nagpur v. Dinshaw Frozen Foods -1999 (106) E.L.T. 340 (Tribunal), the Tribunal had held that the softy (shake) mix, a preparation of milk containing 87% milk was a ready to serve beverage classifiable under sub-heading No.

2202.90. Para 10 from that decision is extracted below :-

“10. We have carefully considered the submissions of the ld. SDR as also the finding of the lower appellate authority. We observe that the lower appellate authority has forgotten to appreciate the fact that, ‘ready-to-serve beverage’ is implied under the description of Tariff Heading 22.02. Food preparations of milk and cream as mentioned under 19.01 would not cover preparations of the nature of ready-to-serve beverages. Preparations of milk covered under Tariff Heading No. 19.01 would cover milk preparations which can be served after mixing with water or boiled water or milk to make it a beverage. There being no doubt that the product Softy (shake) Mix is ready to serve beverage. Therefore, it is proper to classify it, under Tariff Heading No. 2202.90. Consequently, the benefit of Notification No. 9/90-CE also cannot be extended because it is applicable to the product falling under some heading of Chapter XIX. Therefore, on this score we accept the appeal of the Revenue so far as classification of Softy (Shake) Mix is concerned”.

10. We may also refer to the Bombay Collectorate Trade Notice No. 36/90 dated 9-4-1990 appearing at 1990 (47) E.L.T. (T10) wherein it was clarified that the products like Frooti, Maaza, etc. are appropriately classifiable as non-alcoholic beverages under Heading No. 22.02 of the Central Excise Tariff. Earlier, Trade Notices on the subject had been modified by this latter trade notice. Reference may also be made to the Trade Notice No. 114/B’y (sic) appearing at page T62 of 1990 (50) E.L.T.

11. We may now refer to the various decisions referred to by the appellants.

In the case of Northland Industries v. Collector of Central Excise -1988 (37) E.L.T. 229 (Tribunal), the classification was of (1) canned fruits in syrups like fruit cocktail peeches, guavas, red cherries, pineapple, shies, pineapple tit-bits, mango, shies, grapes, apples, figs, litches, etc. (ii) fruit squashes and cordials of orange, lemon, mango, pineapple litches etc. The Tribunal had held that the squashes and cordials were not fruit juice as such but preparations thereof. The products in question in this Tribunal’s decision were different.

In Leukoplast (India) Ltd. v. State of Goa -1988 (36) E.L.T. 369A (Bombay), the Bombay High Court had held that definition given in a particular statute was useable in a given case if not repugnant for interpretation of similar word or expression in another statute. The popular or commercial meaning of the drugs was synonymous to meaning given in the Drugs and Cosmetics Act, 1940 regarding manufacture and distribution of drugs and cosmetics. The High Court observed that the definition of Drugs given in the Drugs and Cosmetics Act, 1940 was not relevant for determining its meaning in trade.

The definition of fruit juice given in the Prevention of Food Adulteration Act has been given above.

We have described the product details as above. We find that the product in question is fully covered by the definition of fruit beverage or fruit drink, as given in para A. 16.05 of Appendix B of the Prevention of Food Adulteration Act, 1954 as is extracted below:- page 182

“A.16.05. – “Fruit beverage” or “Fruit drink” means any beverage or drink which is purported to be prepared from fruit juice and water, or carbonated water, and containing sugar, dextrose, invert sugar or liquid glucose either singly or in combination and with or without-

(a) water, peel-oil, fruit essences and flavours;

(b) citric acid, ascorbic acid;

(c) permitted preservative and colours.

The total soluble solids w/w in the final product shall be not less than 10 per cent.

The minimum percentage of fruit juice in the final product shall not be less than 5.0 per cent w/w.

It may also contain permitted emulsifying and stabilizing agents as prescribed in Rule 61. It may also contain fumeric acid (food grade) certified by Bureau of Indian Standard to the extent of 0.3 per cent by weight.”

In the case of Bharat Forge & Press Industries (P) Ltd. v. CCE -1990 (45) E.L.T. 525 (S.C), it has been held by the Apex Court that under a residuary entry only such goods are covered, which cannot be brought under the various specific entries in the Tariff. It was a case under the erstwhile Central Excise Tariff and the competiting entries were items 26AA and 68. We consider that Heading No. 22.02 is not a residuary entry in the sense of Item No. 68 in the erstwhile Central Excise Tariff. The scope of the entry has been described above with reference to the HSN Explanatory Notes and we do not consider that this decision of the Hon’ble Supreme court is relevant to the facts under consideration before us.

In the case of J.K. Synthetics Ltd. v. U.O.I. -1981 (8) E.L.T. 328 (Delhi), it has been held that an authority can depart from an earlier stand only for cogent reasons such as fresh facts are brought on record or the process of manufacture has changed or the relevant tariff entry has undergone modification or subsequent to the earlier decision there has been a pronouncement of a High Court or the Supreme Court, which necessitates the re-consideration of the issue.

The appellants have referred to the decision of the Asstt. Collector of Central Excise dated 29-12-1988. We find that the disputed classification lists are No. 1/89-90 dated 17-4-1989 and classification list No. 6/89-90 dated 22-3-1990. Show cause notice had been issued on 4-4-1990 and the decision was recorded by the Asstt. Collector of Central Excise on 12-12-1990. The Asstt. Collector of Central Excise had recorded his reasons for modification of the earlier classification list as under :-

“At the time of issuance of earlier Order dated 29-12-1988, the Fruit Products Order, 1955 and the Prevention of Food Adulteration Act, 1954 were not available with me and hence they were not taken into consideration in deciding the issue of classification of impugned goods. Also the Analytical Test Report dated 12-1-1989 was received from the Central Food Technological Research Institute after the delivery of earlier order dated 29-12-1988, deciding the classification of said goods.”

We have analysed the issue of classification in considerable detail in the above paragraphs. A classification incorrectly decided cannot hold good for all time to come and the interests of justice demand that the goods are correctly classified at the earliest when the occasion so arises. In the present case, we are satisfied that there were cogent and valid reasons to set right the incorrect classification decided by the Asstt. Collector of Central Excise, earlier in his order dated 29-12-1988. The proper procedure for change in classification had been followed and adequate opportunity had been given to the manufacture to present their case and the matter has been examined and re-examination by different authorities at different levels. We, therefore, consider that the parameters as fixed by the Hon’ble Delhi High Court in the case of J.K. Synthetics Ltd. are satisfied in the present case for departing from the earlier view taken by the Asstt. Collector of Central Excise.

Reference has also been made to the Supreme Court’s decision in the case of Hindustan Ferodo Ltd. v. CCE, Bombay – 1997 (89) E.L.T. 16 (S.C). The Supreme Court had held that the onus of establishing that the goods are classifiable under a particular tariff entry lays upon the Revenue.

We find that the classification as approved by the ld. Collector of Central Excise (Appeals) is based on cogent reasons. The matter was earlier remanded by the Collector of Central Excise- (Appeals) on the ground that the report of the Research Institute was not made available to the manufacturers. This was subsequently made available through the fresh show cause notice and adequate opportunity was given to the appellants to present their case. In the facts and circumstances, we are satisfied that the onus has been adequately discharged by the Deptt. in classifying the goods in question under sub- heading No. 2202.90 of the Central Excise Tariff.

12. After carefully analysing the matter in all its relevant aspects, we confirm the classification of the fruit drink ready to serve beverage under subheading No. 2202.90 of the Central Excise Tariff.

We also agree with the appellate authority with regard to other pleas taken by the appellants.

As a result, the appeal is rejected. Ordered accordingly.


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