Page 122 - GSTL_ 28th May 2020_Vol 36_Part 4

568 GST LAW TIMES [ Vol. 36
Tariff and on the HSN Explanatory Notes to Chapter 2202 which
explained that ‘Lemonade/Orangeade’ is included in the scope of
‘waters’. Such a manner of determining classification is fallacious.
Once the Hon’ble Authority for Advance Ruling came to the con-
clusion that the impugned products do not qualify as ‘carbonated
waters’, classification under 2202 10 is ruled out. Resultantly, the
ruling pronounced by the Hon’ble Authority for Advance Ruling
that the impugned products are classifiable under 2202 10 20/2202
10 90 is ex facie incorrect. Consequently, since the impugned prod-
ucts are carbonated beverages prepared out of fruit juices, they will
be classifiable as fruit juice based drinks under CTH 2202 99 20.
 Merely because the impugned products do not qualify as ‘Fruit
Juices’ of CTH 2009, the same does not debar classification under
CTH 2202 99 20 as ‘Fruit juice based drinks’.
o The Hon’ble Authority for Advance Ruling examined the
scope of CTH 2009 which encompasses “Fruit Juices’ and ar-
rived at the conclusion that the impugned products will not
fall within the scope of the Heading.
o Reliance was placed on the FSSAI Regulations wherein Fruit
Juices have been defined to mean unfermented but fermenta-
ble product obtained by a mechanical process from sound,
ripe fruit or the flesh thereof and processed by heat, in an ap-
propriate manner, before or after being sealed in a container,
so as to prevent spoilage and are intended for direct con-
sumption.
o The Hon’ble Authority for Advance Ruling observed that the
impugned products are prepared by adding fruit juices to
large quantities of carbonated water and that the fruit juices
are not intended for direct consumption but are only used as
an ingredient during Preparation of the drinks. Therefore, it
was concluded that the impugned products do not qualify as
Fruit Juices under CTH 2009 and would merit classification
only under CTH 2202.
o They are also not contending that the impugned products
qualify as Fruit Juices under CTH 2009. On the other hand,
the impugned products are classifiable under CTH 2202 only.
Consequently, there is no dispute at the four digit level classi-
fication. The issue pertains only to classification of the im-
pugned products under CTH 2202 99 20 as ‘fruit juice based
drinks’. Merely because the impugned products do not quali-
fy as ‘Fruit Juices’, the same does not automatically debar the
products from being classified as ‘fruit juice based drinks’
under CTH 2202 99 20 for the reasons explicated above. Thus,
the impugned products are rightly classifiable under CTH
2202 99 20 as ‘Fruit Juice based drinks’.
 C. Industry practice -
o Their competitors in the industry who are manufacturing
similar carbonated beverages are classifying their products
under 2202 99 20 as fruit juice based drinks. In this regard, it
GST LAW TIMES  28th May 2020  122