Whether Product `Nimbooz' Can Be Classified Under Item `Lemonade' Or `Fruit Pulp Or Fruit Juice Based Drinks': Supreme Court To Consider

The Supreme Court recently agreed to consider whether the product `Nimbooz' can be classified under item `Lemonade' and/or as `fruit pulp or fruit juice based drinks' for the purpose of Central Excise levy.

The bench of Justices MR Shah and BV Nagarathna agreed to consider the question while issuing notice in the civil appeal assailing the order dated October 1, 2021 passed by the Customs,Excise And Service Tax Appellate Tribunal Regional Bench At Hyderabad.

Case Before CESTAT, Hyderabad

An appeal was preferred by the Commissioner of Customs, Central Excise and Service Tax Hyderabad-I and M/S Aradhana Foods against the order dated March 31, 2015 passed by the Commissioner, Customs, Central Excise and Service Tax Hyderabad-I, Commissionerate.

M/S Aradhana Food had preferred the appeal for setting aside the impugned order wherein the demand of differential duty on 'Nimbooz' for the normal period of limitation from April 2013 to December 2013 was confirmed. The Department had preferred appeal for setting aside that part of the order passed by the Commissioner that has dropped the demand of differential duty for the extended period of limitation.

According to the appellant, Nimbooz merited classification under CETH 2022 10 20 of the First Schedule to the Central Excise Tariff Act 1985 but according to the Department, it deserved classification under CETH 2022 90 20 under the category of "fruit pulp or fruit juice based drinks."

The bench of Justices Dilip Gupta And P. Venkata Subba Rao to adjudicate on the issue referred to the para 67 of the judgement passed by the Larger Bench of the Tribunal in M/s. Brindavan Beverages Private Limited vs. Commissioner Customs, Central Excise and 1. the Commissioner 2. Aradhana Foods.

In the referred judgement, para 67 read as follows,

"Accordingly, the reference is answered as follows: The product "Minute Maid Nimbu Fresh (hereinafter referred to as MMNF) manufactured by Brindavan Beverages Private Limited, and 7UP "Nimbooz Masala Soda" or 7UP "Nimbooz" manufactured by PepsiCo India Holdings Private Limited are classifiable under Tariff Item 2202 90 20 of the Central Excise Tariff Schedule under the category of "fruit pulp or fruit juice based drinks."

Relying on the same, the bench in their order said,

"In view of the aforesaid order of the Larger Bench of the Tribuanl, 'Nimbooz' would be classifiable under CETH 2202 10 20 of the First Schedule to the Central Excise Tariff Act."

Noting that the issue as to whether the Department was justified in invoking the extended period of limitation does not arise, the bench in the order further said,

"The order dated 31.03.2015 passed by the Commissioner confirming the demand of differential duty for the normal period of limitation with interest and penalty, therefore, cannot be sustained and is set aside. Excise Appeal No. 21624 of 2015 filed by Aradhana Foods, therefore, deserves to be allowed and is allowed.

8. As the demand of differential duty has been set aside, Excise Appeal No. 21678 of 2015 filed by the Department is dismissed."

Case Title: Commissioner Of Central Excise Hyderabad-I V. M/S Aradhana Foods And Juices Pvt. Ltd. | Civil Appeal Nos. 1232-1233/2022

Coram: Justices MR Shah and BV Nagarathna

Counsel for Petitioner: ASG Balbir Singh, Advocate(s) M.K.Maroria, Shashank Bajpai, Priyanka Das, Sughosh Subramaniyam, Sidhant Kohli

Counsel for Respondent: Advocate(s) V. Lakshmikumaran, Aditya Bhattacharya, Apeksha Mehta, Mounica Kasturi, Charanya Lakshmikumaran

Click Here To Read/Download Order