The Kolkata Eastern Zonal Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled that ‘Nimbooz Masala Soda’ is subject to an excise duty of 6.18% and not 12.36%, thereby deciding in favor of M/s. Varun Beverages Limited, a franchisee of M/s. PepsiCo Inc.
The appellant, M/s. Varun Beverages Limited, manufactured and cleared “7UP Nimbooz Masala Soda” under Central Tariff Heading (CTH) 2202 90 20, paying central excise duty at a rate of 6.18% ad valorem.
The Revenue contended that the product should be classified under CTH 2202 10 10, attracting a higher duty rate of 12.36% ad valorem. Initially, the appellant charged duty from buyers at the rate of 6.18% but deposited the central excise duty with the Department at the rate of 12.36%, under protest.
S. P. Majumder, representing the appellant, argued that the dispute was already settled by the Larger Bench of the Tribunal in the case of Brindavan Beverages Pvt. Ltd. & ors. v. Commr. Of Cus., C.Ex. & S.T., Meerut. In that case, the Tribunal held that the correct classification for such products is CTH 2202 90 20. The appellant prayed that the impugned demand be set aside and the excess duty paid should be refunded.
The Tribunal focused on whether ‘Nimbooz Masala Soda’ is rightly classifiable under CTH 2202 10 10 or CTH 2202 90 20. The Tribunal noted that “Nimbooz Masala Soda” is prepared with lemon juice concentrate as its base, which constitutes 5% of the total beverage content. This lemon juice concentration imparts the basic attributes of the drink, including its taste and characteristics.
The two-member bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) referenced the Larger Bench’s decision in the Brindavan Beverages Pvt. Ltd. case, which determined that products like “Minute Maid Nimbu Fresh” and “7UP Nimbooz Masala Soda” are classifiable under Tariff Item 2202 90 20 as “fruit pulp or fruit juice based drinks.”
The bench concluded that ‘Nimbooz Masala Soda’ should be classified under CTH 2202 90 20, making the applicable duty rate 6.18%, as charged by the appellant from their customers.
Additionally, the Tribunal found that the appellant had paid excess duty at the rate of 12.36%, under protest, and held that this excess duty is refundable along with interest.
The Tribunal disposed of the appeal with this final order.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
