Page 197 - GSTL_14th May 2020_Vol 36_Part 2

2020 ] IN RE : HINDUSTAN COCA-COLA BEVERAGES PVT. LTD. 299
7.9 As regards the reliance by the GAAR upon appellant’s own case
[Hindustan Coca Cola Beverages P. Ltd. v. Commissioner of Central Excise, Chennai-IV
- 2017 (6) G.S.T.L. 200 (Tri. - Chen.)] in the Advance Ruling, the appellant has
submitted that the said decision is inapplicable to the instant case, as the prod-
ucts ‘Maaza Orange and Maaza Pineapple’ are completely different from ‘Fanta
Fruity Orange’, inasmuch as ‘Maaza Orange and Maaza Pineapple’ are non-
aerated drinks, whereas ‘Fanta Fruity Orange’ is fruit juice based drink which is
aerated. It has been submitted that the Hon’ble Tribunal, in reaching the conclu-
sion that the products are not ‘fruit juice based drinks’ held that ‘Maaza Orange
and Maaza Pineapple’ were manufactured from fruit concentrate and not from
fruit juice itself, has drawn inference from a redundant Board Circular No.
309/25/97-CX, dated 21-3-1997.
Findings :
8. We have considered the submissions made by the appellant in the
appeal, further submission dated 21-6-2019 as well as submissions at the time of
personal hearing.
9. The main issue involved in this case is the correct classification of the
product ‘Fanta Fruity Orange’ being manufactured and supplied by the appel-
lant i.e. whether ‘Fanta Fruity Orange’ is classifiable under Sub-heading 2202 10
at S. No. 12 under Schedule IV as “All goods [including aerated waters], contain-
ing added sugar or other sweetening matter or flavoured”, or under Tariff Item
2202 99 20 at S. No. 48 under Schedule II as “Fruit pulp or fruit juice based
drinks” or under Tariff Item No. 2202 99 90 at S. No. 24A under Schedule III as
“Other non-alcoholic beverages”.
10.1 The appellant has submitted that the manufacturing process starts
with procurement of Orange juice concentrate from the vendor and the same is
stored in -20° to -16°Celsius cold storage. Orange juice (which constitutes 10.5%
of the total beverage) is then obtained by adding water to the Orange juice con-
centrate. Thereafter, sugar syrup (which is prepared by mixing granulated sugar
with treated water), along with flavour, additives and preservatives is blended
with Orange juice base to obtain the final mixture. This mixture is then carbonat-
ed, before being filled in PET bottles. It is submitted that Orange juice concen-
trate is produced from real orange juice after extraction of water and is easier to
transport. It is for this reason i.e. to facilitate ease of transportation that the appel-
lant procures Orange juice concentrate instead of orange juice for manufacturing
‘Fanta Fruity Orange’.
10.2 On the label of the product, it is mentioned as follows :-
“CARBONATED FRUIT BEVERAGE
INGREDIENTS : CARBONATED WATER, SUGAR, ORANGE JUICE
CONCENTRATE* (1.6%), ACIDITY REGULATOR (330), PRESERVATIVES
(202, 211), STABILIZERS (414, 445), SWEETENER (960), CONTAINS
PERMITTED SYNTHETIC FOOD COLOUR (110) AND ADDED ORANGE
FLAVOURS (NATURAL AND NATURE-IDENTICAL FLAVOURING
SUBSTANCES).
*ORANGE JUICE CONTENT IN THE BEVERAGE IS 10.5%. CONTAINS
FRUIT.’’
11.1 In order to examine the classification of product ‘Fanta Fruity Or-
ange’, it will be useful to refer to Explanatory Notes of Harmonised System of
Nomenclature (HSN) for Tariff Heading 2202 and also Heading 2202 of Customs
Tariff.
GST LAW TIMES  14th May 2020  197