Page 98 - GSTL_26th March 2020_Vol 34_Part 4

608 GST LAW TIMES [ Vol. 34
regime, M/s. KCMPFL were classifying flavoured milk under Tariff Heading
2202. Under GST they have changed the classification of flavoured milk to Head-
ing 0402 to avail undue advantage of lower rate of GST i.e. from 12% to 5%.
6.4 They submitted that there is no change in the Chapter Notes, sec-
tion notes or chapter headings for the period prior to 1-7-2017 or thereafter. The
Appellant further pointed out that in the Central Excise Notification No. 1/2011-
C.E., dated 1-3-2011, Flavoured Milk of animal origin was classified under Chap-
ter Heading 2202 90 30 and hence the Govt. had recognised the classification of
Flavoured Milk under Chapter 22 and not under Chapter 4.
6.5 They submitted that the legal grounds mention in the Advance Rul-
ing No. AAR/44/CE/02/2012, dated 23-3-2012 in the case of M/s. Danone Foods
and Beverages (I) Pvt. Ltd. [2012 (280) E.L.T. 563 (A.A.R.)], the Advance Ruling
Authority , New Delhi has not been considered by the lower Authority wherein
it has been concluded in para 11 as follows :-
“Therefore any beverages based on milk and flavoured with cocoa or any
other substance will fall for classification under Chapter heading 22 of the
CETA and appropriate heading would be 2202 90 30 of CETA.”
They submitted that the impugned product ‘Flavoured Milk’ is correctly classifi-
able under HSN Code 2202 99 30 attracting GST at 12%.
Personal Hearing :
7. The appellant was called for a personal hearing on 24-12-2019 and
was represented by Sri. Bhanu Prakash, Commercial Tax Officer of Commercial
Taxes, LGSTO 40. During the hearing the appellant reiterated the grounds of ap-
peal and pleaded that the ruling given by the Authority for Advance Ruling may
be set aside.
8. The respondent was represented by Shri H.N. Srinivas Rao, Advo-
cate who submitted that the investigations by DGGI commenced only in April,
2019 whereas the advance ruling was applied for in March, 2019. As regards the
letter dated 9th Jan., 2019 issued by DGGI, the Counsel submitted that the said
letter cannot be considered as a summons since it was a routine letter calling for
documents and that no investigation had commenced as on the date of filing the
advance ruling application.
Discussions and findings :
9. We have gone through the records of the case and taken into account
the submissions made by the Appellant in their grounds of appeal as well as at
the time of personal hearing. The counter made by the respondent during the
personal hearing has also been taken into consideration.
10. The instant appeal has been filed before us with a plea that the rul-
ing of the lower Authority is to be held as void ab initio since it appears that the
same has been obtained by suppression of material facts. The contention is that
the application filed by the respondent KCMPFL should not have been admitted
by the Authority in terms of the proviso to Section 98(2) of the CGST Act since an
investigation was already pending against them on the same issue of classifica-
tion of “Flavoured Milk” by the Directorate General of GST Intelligence, Banga-
lore Zonal Unit (DGGI).
11. The relevant Section 98(2) of the CGST Act is reproduced here-
under :

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