Nimbooz classified under the category of fruit juice based drinks and not lemonade: CESTAT

Last updated: 30 November 2021

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The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has ruled that Nimbooz and Nimbus masala soda are fruit juice-based drinks, not lemonade. This classification places them under chapter heading 22029020 of the Central Excise Tariff Act. Consequently, the manufacturer, M/s Varun Beverages Ltd., is entitled to associated benefits.

Court :
CESTAT, Allahabad

Brief :
In M/s Varun Beverages Ltd. v. Commissioner, Central Excise [Final Order No. 70253/2021 dated November 10, 2021] Hon'ble Customs, Excise & Service Tax Appellate Tribunal, Allahabad ("CESTAT") held that Nimbooz by 7 UP and Nimbus masala soda by 7 UP are classifiable under chapter heading 22029020 of the First Schedule to the Central Excise Tariff Act, 1985 ("the CET Act") which is for category of fruit pulp or fruit juice based drinks and thus M/s Varun Beverages Ltd. ("the Appellant") is entitled to consequential benefits, in accordance with law.

Citation :
Final Order No. 70253/2021 dated November 10, 2021

In M/s Varun Beverages Ltd. v. Commissioner, Central Excise [Final Order No. 70253/2021 dated November 10, 2021] Hon'ble Customs, Excise & Service Tax Appellate Tribunal, Allahabad ("CESTAT") held that Nimbooz by 7 UP and Nimbus masala soda by 7 UP are classifiable under chapter heading 22029020 of the First Schedule to the Central Excise Tariff Act, 1985 ("the CET Act") which is for category of fruit pulp or fruit juice based drinks and thus M/s Varun Beverages Ltd. ("the Appellant") is entitled to consequential benefits, in accordance with law.

The revenue disputed that during the period February, 2009 to December, 2013 these beverages are classified under chapter heading 22021020 and not under chapter heading 22029020, as claimed by the Appellant, and hence liable to excise duty as lemonade.

Hon'ble CESTAT, observed that similar issue had arisen earlier in the Appellant's own case before this Tribunal and vide final order dated July 15, 2019, this Tribunal referred the order to the larger bench decision of this Tribunal dated April 30, 2019, – 2019 (29) GSTL 418 (L.B.) wherein it has been held that these goods under dispute are classifiable under tariff item No. 22029020, which is for the category of fruit pulp or fruit juice-based drinks.

Relied upon the ruling of the Larger Bench and Division Bench in the Appellant's own case and allowed the present appeal.

Held that, Nimbooz by 7 UP and Nimbus masala soda by 7 UP are classifiable under chapter heading 22029020 of the first schedule to the CET Act, which is for category of fruit pulp or fruit juice based drinks and thus the Appellant is entitled to consequential benefits, in accordance with law.

FAQ :

The CESTAT ruled that Nimbooz and Nimbus masala soda are classifiable as fruit juice-based drinks, not lemonade.

They were classified under chapter heading 22029020, which is for fruit pulp or fruit juice-based drinks.

The revenue argued that these beverages should be classified under chapter heading 22021020 and were therefore liable to excise duty as lemonade.

M/s Varun Beverages Ltd. is entitled to consequential benefits in accordance with the law due to the correct classification.

Yes, the CESTAT relied on a larger bench decision and a previous division bench ruling in the appellant's own case.

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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