Page 123 - GSTL_ 28th May 2020_Vol 36_Part 4

2020 ] IN RE : RICH DAIRY PRODUCTS (INDIA) PVT. LTD. 569
is pertinent to refer to the decision of the Ld. Commissioner
(Appeals), Hyderabad in the case Trinity Beverages Pvt. Ltd.
[42/19-20, dated 30-9-2019] wherein it was held that the fruit
based drinks manufactured by them containing a fruit juice
content of around 7% and qualifying as a carbonated bever-
age with fruit drink as per Para 3A of Regulation 2.3.20 supra
are classifiable as fruit juice based drinks under 2202 99 20.
The said Order has not yet been appealed against by the De-
partment.
o Consequently, it is submitted that it is a settled principle that
in the context of classification, different players in the indus-
try manufacturing similarly placed goods cannot be arbitrari-
ly treated. Reliance in this regard is placed on the decision of
the Hon’ble Supreme Court in the case of Damodar J. Malpani
[2002 (146) E.L.T. 483 (S.C.)]. Therefore, it is submitted that
the impugned products manufactured by the Appellant also
entails classification under CTH 2202 99 20 as fruit juice
based drinks under.
 D. Common parlance test -
o Further, the content of the fruit juice component cannot be a
determinative factor for deciding whether the product is a
fruit juice based drink or not. Reliance in this regard is placed
on the decision of the Hon’ble Supreme Court in the case of
Naturalle Health Products (P) Ltd. [2003 (158) E.L.T. 257 (S.C.)]
wherein it was held that the content of the product is not a
determinative factor in the case of classification
o The theory of trade parlance has been widely accepted as a
sound test in the context of classification time and again by
the Apex Court and Hon’ble High Courts. Consequently, to
qualify as a fruit juice based drink, so long as the essential
character of a drink is imparted by the fruit juice component,
then such drink will be treated as a fruit juice based drink.
o In the instant case, the essential character for the carbonated
beverages is imparted by the lime/orange juice content con-
tained in it. This is evidenced by the fact that in trade par-
lance, the consumers purchase the said beverages for the fruit
juice content contained in it and not for the carbonated water.
Therefore, the impugned products are rightly classifiable as
fruit juice based drinks under CTH 2202 99 20.
 E. Fitment -
o They have commenced manufacturing of the impugned
products only from 27th November, 2017 onwards. Prior to
the said date, they were engaged in manufacturing of car-
bonated beverages containing artificial flavouring agents
which did not contain any fruit juice. Thus, since the im-
pugned products contain lime juice/lime juice concentrate
[2.5%]/orange juice [5%], as the case may be, the tax inci-
dence applicable to the said products cannot be compared
with the tax incidence applicable to the above-mentioned
GST LAW TIMES  28th May 2020  123