2024-VIL-1325-AP
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SGST High Court Cases

GST – Classification of Flavored Milk - Department reject petitioner’s classification of flavored milk under Tariff Heading 0402 99 90 and held that same should be classified under Tariff Heading 2202 99 30 as "beverages containing milk" – Revenue of the view that flavoured milk, with the addition of Badam flavour, ceases to be milk and becomes a special drink - Demand of differential tax and imposed a penalty under Sections 122(2)(b) and 74 of the CGST Act, 2017 - Whether Flavored Milk is classifiable under Tariff Heading 0402 99 90 as "milk and cream, concentrated or containing added sugar or other sweetening matter" or under Tariff Heading 2202 99 30 as "beverages containing milk" – HELD – the Tariff Entry 0402 not only covers milk per se but also milk products like cream, skimmed milk powder, milk food for babies, etc. – The entry 0402 incorporates milk and milk products. Though the entry 0402 speaks only of milk containing added sugar or other sweetening matter, flavoured milk cannot be taken out of tariff heading 0402 merely because of addition of 0.5% of Badam flavour – The finding of the Respondent that “flavoured milk” goes out of entry 0402 by addition of Badam flavour cannot be accepted – Further, applying the principle of Nocitur a Sociis, the entry 2202 99 30, would cover beverages which contain milk as well as water. Flavored milk, being predominantly milk with some sweetening matter added, would fall under the more specific Entry of 0402 rather than the general entry of 2202 99 30 - Since the Flavored Milk is classified under tariff heading 0402 99 90, the question of penalty would not arise – the writ petition is allowed
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