2008(02)LCX0154

In the Customs, Excise & Service Tax Appellate Tribunal, Mumbai

Ms. Jyoti Balasundaram, Vice President and Shri A.K. Srivastava, Member (Technical)

Commissioner of Customs (Import), Mumbai

Versus

Forever Living Products (India) Ltd.

Final Order No. A/222/WZB/2008/CSTB-CI dt. 25.2.2008 certified on 31.3.2008 in Appeal No. C/806/2006-Mum.

Cases Quoted -

Forever Living Products (India) Ltd. 2006 (193) ELT 45 - Relied on [Paras 2, 3, 5]

Forever Living Products (India) Ltd. 2006 (203) ELT 233-Distinguished [Para 7]

Departmental Clarification Quoted-

Circular No. 44/03-Cus. dt. 29.5.03 issued by CBEC [reported in 2003 (56) RLT M89] [Para 6]

Circular No. 28/05 dt. 1.7.2005 issued by CBEC [reported in 2005 (69) RLT M5] [Para 6]

Advocated By -

Shri N.A. Sayed, JDR for Appellant
Shri V. Sridharan, Adv. for Respondents

Per Jyoti Balasundaram :

The issue for determination in this appeal is classification of following three products viz. Aloe vera Gel, Aloeberry Nectar and Forever Freedom imported by the respondents herein under Bills of Entry dated 16.12.2005 -whether under CTH 200980 for Aloe vera Gel and 200990 for other two products or under CTH 2202.90 as contended by the Revenue. The Adjudicating authority has held that the goods were classifiable under CTH 2202.90 solely on the basis of WCO advisory opinion with regard to classification of Aloe vera products which reads as under:-

"2202.90 Aloe vera gel: in the form of a liquid, put up for retail sale in a container of plastics (e.g. 1 litre), based on aloe vera gel as the main ingredient and containing additives such as sorbitol, ascorbic acid, citric acid, potassium sorbate, sodium benzoate, papain, xanthan gum and tocopherol. It is used as a health drink (between 60 and 120 ml twice daily) and it is claimed in the product packaging or literature to have effect against cholesterol asthma, ulcers, constipation, cold, indigestion, diarrhea, etc."


2. The Commissioner(Appeals) found that the department as well as the importers had accepted that the imported goods were fruit and vegetable juices to which standardized preservatives were added after clarification, filtration etc. but use of those additives were in small quantities which do not make any beverage/ drink by dilution with water/alcohol in industry or domestic use, as held by the Tribunal in Order No. A/731/WZB/2005 C.III dated 16.5.2005 reported in 2006 (193) ELT 45 in the case of the same importers and the same products. He held that WCO opinion was advisory in nature and vegetable and fruit juices are correctly classifiable under CTH 2009 and are specifically excluded from CTH 2202. It is on this basis that he accepted the contention of the importers that the goods were classifiable under CTH 2009.80/2009.90. Hence this appeal by the Revenue.


3. We have heard both sides. We find that the issue of classification of the same products imported by the same importer, came up for consideration before the Tribunal earlier. In the Order cited supra, the Tribunal has noted that the constituents of the products are as under:-

"(a) Aloe Vera Gel - A vegetable juice - Consisting of the Aloe Vera sap/juice

(b) Aloe Vera Nectar - a Mixture of fruit and vegetable juices -consisting of the Aloe Vera sap/juice. Addition of Apple and Cranberry juices in miniscul quantities

(c) Forever Freedom - A mixture of Fruit and Vegetable Juices -consisting of the Aloe Vera sap/juice. Addition of Orange Juice in miniscul quantities."

The Tribunal has held as under:-

"Reading of the notes to Chapter 20.09 & 21.06 reveal that juices, unfermented & not containing spirits obtained generally by processing fresh healthy and ripe vegetables by mechanical means and the liquids obtained then submitted to process of clarification, filtration, de-aeration, homogenization and sterilization would remain in heading 20.09, when such juices should retain their original character but may contain sugars, sweetening agent preservatives and standardizing agents or added salt spices or flavouring substances and they can be inter mix of same or of different sources of plants juices. However, if the entity becomes a preparation, often referred to as 'Food Supplements' based on extracts from plants/fruits concentrates etc, basically remaining Non-alcoholic as preparations obtained by COMPOUNDING vegetable extracts of heading 1302 with various chemicals, e.g. tartaric acid, citric acid etc and result in beverages obtained by simple dilution with water, wine or alcohol for domestic use or use in industry, this being to avoid transport costs but with endorsements on labels of maintenance of general health or well being, but not for prevention or treatment of ailments etc in such cases the preparation would get classified under heading 2106.

(d) On a question from the Bench the Ld. Advocate accepts that the entity is Standardized and Preservatives are added after clarification, filtration etc of the juice of Aloe Vera Plant but there is no COMPOUNDING done with tartaric acid etc and the Ld. DR admits that there is no test reports indicating a Compounding having been established. Both sides agree that the use of these three entities is not to make any beverage/drink by dilution with water, wine or alcohol in industry or domestic use. It is also not contested that it is consumed in small quantities as such, as imported, by human. The classification Aloe juice therefore has to be upheld under 2009.80 for the unmixed and 2009.90 for the Aloe Juice mixed with cranberry juice and or orange juice when presented for assessment as in this case.

(d) The plea of the Ld. Advocate that Aloe Vera is specifically mentioned as vegetable; the crushing of the fleshy leaves of the plant result in the juice is not questioned by the Revenue before us. The term vegetable and vegetable juice will be juice emerging from crushing of a plant part leaf including fleshy leaves of Aloe Vera plant. Saps by definition are self exudates, without damaging the plant cell, while juices would be result of crushing or & tearing activity of the plant cell parts, Botanically called as fruits or other edible parts like leaves, roots etc. Carrot juice will be plant juice from root of carrots crushed. Similarly, Aloe Vera would be result of fleshy leaves of Aloe Vera Crushed. The generally understood meaning of vegetable juice will cover juice from any plant part. The findings of lower authorities contrary to this interpretation of vegetable juices cannot be upheld, especially when preparation is not established and juice is not compounded.

(e) The finding of the entitles to be 'Food Supplement' cannot be upheld since to be a supplement, it has to be basically a protein, fat or carbohydrate or mix of two or more of these to 'Supplement Food'. The entity cannot be proved to be a 'Food Supplement' or recommended in lieu of or in support of nutritional requirements obtained from food. The term 'Food Supplement' cannot be applied to a juice recommended to be taken of 10 to 15 ml in a day by a human. It is not marketed in capsule, tablet or sachet form and food supplements are as per para 16 to Chapter Note would be based on extracts and not crushed plant parts or fleshy leaf only clarified, filtered and standardized. The entity not being 'sap' as understood as exudates of a plant and the finding of facts by the original authority as seen from the order is "These goods are made from Aloe Vera Gel/Saps after processing by addition of other substances. Therefore, these goods are preparations of Aloe Vera Gel/ Saps", which would indicate that the authority itself is not sure of the product under assessment to be exclusively a 'sap'. Therefore, the entities here are to be classified relying on para (ii) of the Example of excluded preparation under heading 1302.

(f) There is no material to conclude that vitamin in the entity reported as constituents are added and this disqualified them from classification under 20.09 as held by department cannot be upheld.

(g) Heading 2106 applies to 'Food Preparation'. The heading 2009 to juice of vegetables and preparation thereof; 'food' is understood & as 'food preparation', as per dictionary or commonly understood meaning of 'food' much less 'food preparation' cannot be applied to the entities between Classification as 'food or food preparation' is not called".


4. The Tribunal did not record any finding on the issue of classification of goods under CTH 2209.90 because the rival entries for consideration were CTH 2009 and 2106.


5. In the present case, the Adjudicating authority has held that the issue regarding classification under CTH 2202 was left open by the Tribunal and this could be considered prospectively for future imports by the Department. We find that the Heading 2202 under which the department seeks classification covers "water including mineral waters and aerated waters containing added sugar or other sweetening matter or flavoured or other non alcoholic beverages not including fruit or vegetable juices of heading 2009." Fruits and vegetable juices falling under Chapter 20.09 are therefore, excluded from coverage under Chapter 22. Heading 20.09 covers Fruit and vegetable juices; Heading 2009.80 covers juice of any other single fruit or vegetable other than grape fruits, citrus fruits, tomatoes, and apples. Heading 2009.90 covers mixtures of such fruits. HSN Notes to Chapter 13.02 which covers vegetable saps and extracts describes aloes as a thickened sap with a very bitter taste, obtained from several varieties of the plant with the same name and as a vegetable sap. In the earlier order of the Tribunal cited supra, it has been noted that vegetable and vegetable juice will be juice emerging from crushing of a plant part leaf including fleshy leaves of Aloe Vera Plant and Saps by definition are self exudates , without damaging the plant cell, while juices would be result of crushing and tearing activity of the plant cell parts and botanically called as fruits or other edible parts like leaves, roots etc. Therefore, once it has been established that aloe vera juice is vegetable juice, it will be excluded from coverage under CTH 2202. The submission of the I.D.R. that mixtures of two different types of fruit juices or two different types of vegetable juices alone will be examples of fruit or vegetable juices covered under CTH 20.09 and since the products in dispute are mixtures of fruit and vegetable juices, they will not fall for classification for either as fruits or vegetable juices under the named chapter headings, is also not acceptable as there is nothing to substantiate this submission, and further for the reason that Explanatory note of HSN under Heading 20.09 provided that intermixtures of juices of fruits or vegetables of the same or different types remain classified under this heading. It is also significant to note that the classification of goods by the Adjudicating authority was done under CTH 2202 solely on the basis of the WCO's Advisory Opinion, which, even as per the Asstt. Commissioner's order dated 20.5.03 which culminated in Tribunal's Order dtd 16.5.05 supra has not been implemented and, therefore, cannot be relied upon for classification under Heading 22.02.


6. Whenever the CBEC decides to implement decisions of WCO's Advisory Opinion, it issues circulars as seen from Circular No.44/03-Cus dtd.29.5.03 [reported in 2003 (56) RLT M89] relating to mattresses, Circular No.28/05 dtd 1.7.05 [reported in 2005 (69) RLT M5] relating to Mobile Pen/Pen Drive etc. The WCO Advisory Opinion's decision on Aloe Vera Gel does not consider heading 20.09, as seen from the full text of the classification decision placed on record before us by the respondents. The competing entries considered were heading 22.02/30.04. For both these reasons viz. non implementation and non consideration of Heading 20.09, the WCO Advisory Opinion's decision is not relevant to the present case.


7. The Tribunal's Order reported in 2006 (203) ELT 233, in the assessee's own case, which remanded the case for considering classification under Heading 21.06 is not relevant as that was the heading proposed by the Revenue in that case, while it is not the heading proposed by the Revenue in the present case.


8. In the light of the above discussion, we hold that the products in dispute have rightly been classified as Vegetable juices under CTH 2009.80/ 2009.90, uphold the impugned order and reject the appeals.

Equivalent 2008 (086) RLT 0536 (CESTAT-Mum.)

Equivalent 2008 (226) ELT 0738 (Tri.-Mumbai)