Page 139 - GSTL_ 28th May 2020_Vol 36_Part 4

2020 ] IN RE : BRITANNIA INDUSTRIES LIMITED 585
lows : ‘ “Flavoured Milk”, by whatever name called, may contain
nuts (whole, fragmented or ground) chocolate, coffee or any other
edible flavour, edible food colours and cane sugar. Flavoured milk
shall be pasteurised, sterilized or boiled. The type of milk shall be
mentioned on the label’.
 Evidently, the Food Safety and Standards Authority classifies and
treats flavoured milk as Milk/dairy product. On the other hand,
‘beverages, excluding dairy products’ is separately classified under
Category 14 of the FSS Regulations. It is imperative to note that Cat-
egory 14, i.e. beverages, includes milk-based beverages such as tea
and coffee. It is evident that flavoured milk is not considered by the
FSS as a beverage containing milk, but as milk/dairy product.
The applicant has thus claimed that in common parlance and also as per the
FSSAI (which is the Sector regulator), flavoured milk is essentially milk/dairy
product, rather than a beverage made from milk and duly classifiable under
Chapter Heading 0402.
2.4 The applicant has further stated, that the general rules for interpre-
tation used in Customs Tariff Act, 1975, the Section Notes, Chapter Notes and the
General Explanatory Notes are mutatis mutandis applicable to classification under
the GST law (for identifying applicable rate under the Rate Notification) and as
per the said General Rules for interpretation, the classification is to be deter-
mined, -
 as a first recourse, according to the description of goods mentioned
in the tariff headings or the Section Notes or Chapter Notes con-
tained in the Schedule. The Rules further provide that when goods
are prima facie covered under two or more headings, classification
shall be affected such that a specific entry will prevail over a general
entry. Accordingly, as milk is specifically covered under the de-
scription of Heading 0402, the product will fall for classification un-
der the said heading. Thus, even if flavoured milk is classifiable in
two or more headings i.e. under Chapter 4 and Chapter 22, then as
per the General Rules, the most specific description shall be pre-
ferred over general description. The product is commonly known
and understood as ‘flavoured milk’, as it is essentially a form of
milk rather than a derivative of milk or milk product. Therefore, the
entry most specifically applicable is under Chapter 4.
 Rule 3(b) of the General Rules [which is applicable in the event that
classification cannot be determined under Rule 3(a)] inter alia states
that mixture and composite goods consisting of different materials
shall be classified as if they consist of the material or component
which gives them their essential character. In the present case, since
milk constitutes the major ingredient and provides the essential
character to the flavoured milk, the product merits classification as
milk under Chapter 4.
 Further, the general explanatory notes for Chapter 4 under the
Harmonized Commodity Description and Coding System permits
addition of certain other ingredients which could either work as

GST LAW TIMES  28th May 2020  139