Order Date: 26 August 2022

Key pointers-

• The Appellant, Vadilal Industries Ltd. are engaged in manufacture of goods like Ice Cream, ready to eat food and various milk products. Among other products, they are producing flavored milk under the trade name of “Power Sip ''.
• As per the appellant such flavored milk merits classification under Heading 04029990 of the GST Tariff. The appellant submitted that the process of production of flavored milk is standardization of fresh milk according to the fat contents and heating at a certain temperature followed by filtration, pasteurization and homogenization and then mixing of sugar and various flavors and finally bottling.
• The appellant, submitted that their product i.e. flavored milk is milk itself (consisting of 92% of milk and 8% of sugar, flavor etc.) not beverages containing milk and is classifiable under Chapter 0402 instead under Chapter 2202 as held by GAAR.
• Advance ruling authorities passed the decision against the Appellant, being aggrieved, the appellant has filed the present appeal.
• The Appellate Authorities observe that In the present case, as per the product labels submitted by appellant, the Milk constituent is ‘Double Toned Milk’ which are not ‘Full Cream Milk’ or ‘Skimmed Milk’ as per above definitions and Chapter Note 1 explaining the scope of Heading 0402 and therefore are undoubtedly excluded from the purview of Tariff Heading 0402. 
• The Appellate Authorities relied on the case of M/s. Britannia Industries Ltd. wherein it was held that flavoured milk is not classifiable under Tariff Heading 0402/0404 but classifiable under CTH 2202 99 30.
• The appeal filed by the appellant is dismissed.