CESTAT Kolkata: 12% Integrated GST Applicable on Dabur’s ‘Lemoneez’ Imports

A 12% IGST rate is to be imposed on imported ‘Lemoneez‘, as noted by the Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT).

The issue has been addressed by the Bench of K. Anpazhakan (Technical Member) and Ashok Jindal (Judicial Member) whether ‘Lemoneez’ is classifiable under residuary item 2106 90 19 as a soft drink concentrate [under miscellaneous edible preparations, not elsewhere specified], or under Tariff Item 2009 31 00 (juice of a single citrus fruit).

The Tribunal said that “the term ‘soft drink’ is per se different from the fruit juices since the soft drinks are commonly understood to be aerated beverages/ preparations containing merely essences or flavours with no actual juice content. Thus, treating the lemon juice concentrate as soft drink concentrate is factually as well as legally untenable.”

In the same case, the taxpayer M/s. Dabur India Limited imports distinct types of ‘fruit pulp’, ‘fruit juices’, or ‘fruit juice-based drinks’, including, inter alia, ‘Lemoneez’ (impugned goods) from Nepal into India.

Commissioner of Customs, from Additional Director General, received a revenue risk report alleging non-filing of customs duty by the taxpayer by resorting to the inappropriate category of the impugned goods under Tariff Item 2202 99 20 when as per the Department, it is classifiable under Chapter Heading 2106 chargeable to IGST (Integrated Goods and Services Tax) @18%.

After that, in the adjudication, the Commissioner of Customs affirmed the demand of differential IGST on the taxpayer under sections 114A and 114AA of the Customs Act, 1962, beyond ordering confiscation of the impugned goods, including the levying of a redemption fine on it.

The order of the Commissioner of Customs (Appeals) has been contested by the taxpayer before the Tribunal.

Taxpayer, the impugned goods are made by blending lemon juice concentrate with water to such extent that the water content is not exceed than what is there in natural lemon juice; subsequently, it is according to the procedure of ‘pasteurization’ and thereon, preservative is added and which is then filled, plugged, capped, labelled and box packed for final sales.

CTH 2106 covers preparations for lemonades, which are flavoured syrups and may include fruit juices as additional ingredients. Therefore, the primary composition of products categorised under CTH 2106 is not necessarily fruit juices, the bench said.

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The Tribunal, only those preparations which are utilized to make lemonade or other beverages, where the concentrated fruit juice is added with citric acid (to take its acidic content more than that of natural juice), essential oils of fruit, synthetic sweetening agents etc. shall get categorized under tariff heading 2106, unlike the instant case, where no citric acid or essential oils or synthetic sweetening agents, etc. are added.

The bench, Lemoneez, is categorised under Tariff Item No. 2009 31 00, being the juice of a single citrus pulp as claimed by the taxpayer.

The tribunal in the above said permitted the appeal.