CESTAT Upholds Higher Customs Duty on Imported Mandarin Juice Concentrate

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that “Mandarin (Kinow) Frozen Concentrate” imported by Varun Beverages Ltd. is classifiable under the tariff entry applicable to “juice of any other single citrus fruit” and not under the concessional category meant for orange juice. However, the bench of Justice Dilip Gupta (President) and P. Anjani Kumar (Technical Member) has simultaneously granted substantial relief to the company by setting aside the extended period demand, confiscation, redemption fine, and penalties. The dispute arose after customs authorities alleged that Varun Beverages had wrongly classified imported “Mandarin (Kinow) Frozen Concentrate” under Customs Tariff Item (CTI) 2009 1100, attracting customs duty at 35%. The Department contended that the product ought to have been classified under CTI 2009 3900 covering “juice of any other single citrus fruit”, attracting a higher customs duty rate of 50%. The department contended that alleged misclassification led to a short payment of customs duty exceeding ₹3.10 crore. The Principal Commissioner of Customs had confirmed the demand along with interest, imposed an equivalent penalty under Section 114A, and also ordered confiscation of the goods with an option to redeem them on payment of a redemption fine of ₹5.5 crore. Before the Tribunal, Varun Beverages argued that “mandarin orange” is commercially and commonly understood as a variety of orange and therefore its concentrate should be treated as orange juice for tariff purposes. The company relied upon trade parlance, online references, agricultural publications, and commercial understanding to contend that mandarins and oranges are treated interchangeably in the market. It was also argued that after import and processing, the product was marketed as orange juice. The company further submitted that the Customs Tariff does not specifically define “Mandarin (Kinow) Frozen Concentrate” and therefore the “trade and commercial parlance” test should apply. It relied on several judicial precedents to argue that when a specific tariff entry exists, goods cannot be pushed into a residual category. However, the Revenue argued that the tariff structure itself clearly differentiates between oranges and mandarins. It pointed out that Chapter 8 of the Customs Tariff separately classifies “Oranges” and “Mandarins (including tangerines and satsumas)” under different tariff entries. According to the Department, this legislative distinction carries forward into Chapter 20 dealing with fruit juices, where orange juice has a dedicated heading while juices of all other citrus fruits fall under the residual category. The Tribunal examined the tariff structure in detail and observed that oranges and mandarins are separately classified commodities under the Harmonised System of Nomenclature (HSN). It noted that while orange juice has a specific tariff entry under Heading 2009, there is no dedicated entry for mandarin juice, which therefore necessarily falls within the category of “juice of any other single citrus fruit.” The Bench referred extensively to botanical classifications and commercial references discussing the distinction between oranges and mandarins. It observed that even trade references cited by the appellant acknowledged that mandarins and oranges are distinct fruits, though often confused because of their similarities. The Tribunal also referred to a Government of India publication which specifically stated that kinnow/mandarin is commonly confused with oranges despite being biologically distinct. Rejecting the company’s contention based on trade parlance, the Tribunal emphasized that the common parlance test cannot override a clear statutory scheme. Relying on the Supreme Court’s recent decision in Commissioner of Customs (Import) vs. Welkin Foods (2026), the Bench observed that where the tariff itself provides sufficient guidance, courts should not resort to commercial understanding to alter classification. The Tribunal held that if “orange juice” under Chapter 20 were interpreted to include mandarin juice merely because of commercial usage, it would directly contradict the tariff scheme under Chapter 8 where oranges and mandarins are separately enumerated. Accordingly, it upheld the classification of the imported product under CTI 2009 3900. Despite ruling against the importer on classification, the Tribunal granted major relief on limitation and penalties. It observed that Varun Beverages had consistently classified the goods under the disputed tariff entry over several years and the Department was fully aware of the practice through assessments and post-clearance audits. The Bench held that the dispute was essentially interpretational in nature and arose from an audit objection. Therefore, allegations of suppression or intent to evade duty could not be sustained. It ruled that the extended period of limitation was not invocable in the facts of the case. Consequently, while upholding the duty demand for the normal period, the Tribunal set aside the confiscation of goods, redemption fine, and penalties imposed on the company. Case Details Case Title: Varun Beverages Ltd Versus Commissioner of Customs, NhavaSheva-I Citation: JURISHOUR-1212-CES-2026(MUM) Case No.: CustomsAppeal No.85153 of 2024 Date: 08.05.2026 Counsel For Appellant: Prabhat Kumar, Advocate Counsel For Respondent: Deepak Sharma,Authorised Representative Click Here To Read Order Read More: Multi-Level Marketing Activities Linked To Sale-Purchase Of Goods Can’t Be Taxable Under BAS: CESTAT

CESTAT Upholds Higher Customs Duty on Imported Mandarin Juice Concentrate

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