IMPORTANT POINT
The classification of carbonated fruit drinks under Tariff Item 2202 99 20 is upheld, affirming that products with significant fruit juice content cannot be classified merely as aerated waters.

JUDGMENT :

SOUMITRA SAIKIA, J.

These writ petitions are filed by the petitioners unit assailing the Show Cause Notice dated 17.02.2022 and impugned order dated 14.07.2022 passed by the Joint Commissioner of State Tax, classifying the products manufactured by the writ petitioners under Customs Tariff Head 2202 10 90 rejecting the claims of the petitioners that the products are to be classified under Customs Tariff Head 2202 99 20. Since separate proceedings were initiated and orders passed for different financial years, the same are being assailed by separate writ petitions. Since the issues raised in all these writ petitions are same, these writ petitions are taken up together for hearing and disposal.

2. The petitioner is in the business of manufacture and sale of carbonated fruit drinks and ready to serve fruit drinks. The petitioner is a partnership firm and is represented in the present proceedings by the Managing partner. It manufactures and sells as many as 10 different products which are described as under:

3. According to the contentions of the writ petitioner, these products are classifiable under Tariff Item 2202 99 20 of the Customs Tariff Act, 1975 and are specified as serial No.48 under Schedule-II as “fruit pulp or fruit juice based drinks” in notification No.1 of 2017 – Integrated Tax (Rate) dated 28.06.2017 and are taxable at the rate of 12%.

4. According to the petitioner, carbonated beverages with fruit drinks should not have less than 10% fruit juice (5% in case of lime or lemon) and total soluble solids not less than 10% as per Regulation 2.3.30 of Food Safety and Standards (Food Products Standards and Food Additives) Regulation, 2011. According to the petitioner, these carbonated fruit drinks qualify as fruit beverages or fruit drinks. It is the case of the petitioner that the products manufactured by the petitioner are regularly tested at the State Public Health Laboratory, Government of Assam where sample products are sent for testing. From the report of analysis of food sample, it is clear that goods supplied by the petitioner comprises of fruit juice content more than 10% solids, sugar (sucrose) acidity regulators and synthetic food colors and it confirms to the specifications stipulated in Regulation 2.3.30 of FSSAI for carbonated beverage with fruit juice. That apart, all particulars including the details of the fruit concentrate are described on the label of the respective products.

5. On the basis of the classification adopted by the petitioner, it filed the GST returns regularly upon payment of appropriate taxes at the rate of 12%. The classifications of the products were duly described in the invoices raised and the returns filed by the petitioner.

6. In the month of September, 2021, the department initiated an investigation in respect of the classification adopted by the petitioner in respect of the goods manufactured and sold by the petitioner. On the 03.09.2021 inspection was undertaken by a team of Officers of the State Tax, Zone-A, Guwahati at the place of business of the petitioner. Such inspection was undertaken by invoking powers under Section 67 of the Assam Goods and Service Act, 2017. During such investigations, several documents including sales registers, purchase registers, purchase files, loose slips files, long registers, sales bills files, loose slips folders, miscellaneous files were all seized. That part, the CPU-cum-monitor, pen drives, mobile phone and CCTV DVR were seized. The department served on the petitioner the seizure list in form of GST INS-02. During the search and seizure operation, sample products from the petitioner’s units were also taken away by the department purportedly for analysis in the laboratory