Page 195 - GSTL_14th May 2020_Vol 36_Part 2

2020 ] IN RE : HINDUSTAN COCA-COLA BEVERAGES PVT. LTD. 297
‘Fruit pulp based drinks’ or ‘Fruit juice based drinks’ only. The ‘Fruit juice con-
centrate based drink’ are not covered under the said entry. Under the circum-
stances, the said product do not fall under the Tariff Item 2202 99 20.
5.2 The GAAR also referred to the decision of Hon’ble Customs, Excise
and Service Tax Appellate Tribunal in the appellant’s own case (though for dif-
ferent product), reported as Hindustan Coca Cola Beverages P. Ltd. v. Commissioner
of Central Excise, Chennai-IV [2017 (6) G.S.T.L. 200 (Tribunal)].
5.3 The GAAR further observed that even if the ‘common parlance test’
is applied, the industry refers the ‘fruit pulp or fruit juice based drinks’ different-
ly than the ‘fruit juice concentrate based drinks’. Therefore even by applying the
‘common parlance test’, the product ‘Fanta Fruity Orange’ would not fall under
Tariff Item 2202 99 20.
5.4 It was observed that Carbon dioxide is added to the beverage as a
preservative only and not for any other purpose, therefore, the product ‘Fanta
Fruity Orange’ would not fall under Tariff sub-heading 2202 10 - ‘All goods in-
cluding aerated waters containing added sugar or other sweetening matter or
flavoured’.
5.5 The GAAR vide aforesaid Advance Ruling, ruled as follows :-
“The product ‘Fanta Fruity Orange’ manufactured and supplied by M/s.
Hindustan Coca-Cola Beverages Private Limited (GSTIN 24AAACH3005M1ZX)
is classifiable under Tariff Item 2202 99 90 and Goods and Services Tax rate
of 18% (CGST 9% + GGST 9% or IGST 18%) is applicable to the said product
as per Sl. No. 24A of Schedule III of Notification No. 1/2017-Central Tax
(Rate), dated 28-6-2017, as amended, issued under the CGST Act, 2017 and
Notification No. 1/2017-State Tax (Rate), dated 30-6-2017, as amended, is-
sued under the GGST Act, 2017 or IGST Act, 2017.
6. Aggrieved by the aforesaid Advance Ruling, the appellant has filed
the present appeal.
7.1 The appellant has submitted that the GAAR has failed to appreciate
scope of Chapter Heading 2202 and misclassified ‘Fanta Fruity Orange’ under
the residuary entry. It has been submitted that ‘Fruit pulp or fruit juice based
drinks’ are specifically covered under Tariff Item No. 2202 99 20 under the sub-
heading No. 2202 99 as ‘other non-alcoholic beverages’. It has been further sub-
mitted that the intention of the Legislature is to include those beverages under
Tariff Item No. 2202 90 20, wherein the fruit imparts the essential character of the
beverage. The appellant referred to the dictionary meaning of the term “base”
given in different dictionaries.
7.2 The appellant has submitted that ‘Fanta Fruity Orange’ is prepared
with orange juice as its base, which is added to the syrupy liquid consisting of
water, sugar and other constituents. The percentage of orange juice is 10.5% of
the total beverage. It is the active ingredient of the product in question, and im-
parts the basic attribute to the drink, including the taste and characteristics.
Therefore, the product in question will be an ‘orange juice based drink’, qualify-
ing as ‘fruit juice based drink’ under the Tariff Item No. 2202 99 20.
7.3 In support of the above interpretation, the appellant placed reliance
upon ‘D. Hicks (ed.), Production and Packaging of Non-carbonated Fruit Juices
and Fruit Beverages, 1990’. The appellant submitted that Shri Rajesh Nair, Asso-
ciate Vice-President - Quality Assurance & Product Integrity of the Appellant
GST LAW TIMES  14th May 2020  195