PER: P. ANJANI KUMAR

M/s Varun Beverages Ltd.¹the appellant filed this appeal No. C/85153/2024, against the Order-in-Original, No. 184/2023-24/Commr/Gr.I&IA/NS 1/CAC/JNCH dated 01.12.2023, passed by Principal Commissioner of Customs, NhavaSheva.

2. Briefly stated the facts of the case are that the appellant imported ‘Mandarin (Kinow) Frozen Concentrate’ and filed 26 Bills of Entry between 2019–2021, classifying the goods under Tariff entry 2009 1100 (chargeable to Customs duty @ 35% and IGST @12%). During the audit of company’s records, it was pointed out by the audit team that the goods should have been classified under Tariff entry 2009 3900 (Juices of any other single citrus fruit – other), chargeable to Customs duty @ 50% and IGST @12%) and that the alleged misclassification resulted in a shortfall of ₹3,09,25,503/-. Accordingly, a Less Charge-cum-Demand Notice dated 05.05.2021 and subsequently, a Show Cause Notice dated 15.12.2022 were issued seeking to reclassify the impugned goods under CTI 2009 3900; demanding differential duty amounting to ₹3,09,25,503/-, along with applicable interest under Section 28AA; confiscation of impugned goods under Section 111(m) of the Customs Act, 1962 and proposing to impose penalty under Section 112(a) and/or Section 114A of the Customs Act, 1962. By a corrigendum dated 15.12.2022, duty demand was revised to ₹3,10,28,387/-. Principal Commissioner of Customs passed the impugned Order-in-Original No. 184/2023-24/Commr/Gr I&IA/NS-1/ CAC/ JNCH, dated 01.12.2023, classifying the imported goods under Tariff Entry 2009 3900; confirming demand of duty of Rs.3,10,28,387/-, along with interest; confiscating the goods while giving option redeem on payment of a fine of ₹5,50,00,000/- and imposing a penalty of ₹3,10,28,387/- under Section 114A.

3. Shri Prabhat Kumar, Learned Counsel for the appellant, submits that impugned goods imported, namely, Mandarin (Kinow) Frozen Concentrate’ are correctly classifiable under CTI 2009 1100 due to the description, trade, and commercial nomenclature of the goods; the relevant tariff entries read with applicable Section/ Chapter Notes under the Customs Tariff Act; the Explanatory Notes to the Harmonised System of Nomenclature (HSN) and the binding judicial precedents on the issue. He submits that for classification, the terms of the heading, relevant chapter, and section notes must be referred to as per the Rule 1 of General Rules for the Interpretation of import tariff. He submits that the impugned item is not defined in the Customs tariff; no section or chapter note in Chapter 20 specifically applies to this item. He submits that the commissioner takes support of the Section or chapter notes, of Chapter 8, to arrive at the classification under Chapter 20. The same is not permissible. Just as mandarin oranges and oranges have a separate classification in Chapter 8, it cannot be concluded that their pulp /juices are to be separately classified under Chapter 20 also. U.S. Customs Ruling NY N301712, dated December 6, 2018 clarified that mandarins and oranges are same.

4. Learned Counsel submits further that as the Customs Tariff does not define “Mandarin-(Kinow) Frozen Concentrate,” classification must follow the Trade and Commercial Parlance Test i.e. based on how they are commonly recognized in the market.

● Ministry of agriculture, Government of India considers that mandarin is a group name for a class of oranges with thin, loose peel(Source: https://agmarknet.gov.in/ Others/preface-mandarin.pdf)

● Wikipedia says that the mandarin orange (Citrus reticulata), also known as the mandarin or mandarine, is a small citrus tree fruit. Treated as a distinct species of orange.

● “S & J Mandarin Grove”(https://www.sandjmandarins.com) informs that mandarins are a type of orange

● Medical News Today article mentions mandarins are oranges while explaining the health benefits of mandarin oranges?” by mandarins are referred to as mandarin oranges (https://www.medicalnewstoday.c