Minute Maid Nimbu Fresh with 5% Fruit Juice Classifiable as Fruit Juice Based Drink: CESTAT Quashes Excise Duty Demand

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh ruled that “Minute Maid Nimbu Fresh” containing more than 5% fruit juice is classifiable as a fruit juice–based drink under Tariff Item 2202 90 20, and therefore the excise duty demand raised by the tax authorities was unsustainable. The bench of S.S. Garg (Judicial Member) and (Technical) P. Anjani Kumar (Technical Member) has observed that the beverage in question contained the required minimum fruit juice content and therefore satisfied the regulatory requirements applicable to fruit beverages. The bench held that such drinks cannot be treated as simple flavoured water or lemonade when the fruit juice content is 5% or more, and must be classified as fruit juice–based beverages. Kandhari Beverages, a manufacturer of beverages including Minute Maid Nimbu Fresh, was issued multiple show cause notices by the Central Excise Department. The department alleged that the company had incorrectly classified the beverage under Tariff Item 2202 90 20 instead of 2202 10 20, leading to short payment of excise duty. Based on this classification dispute, the department raised a demand of ₹1.33 crore in central excise duty for the period from April 2009 to April 2014, along with interest and penalties. Additionally, the authorities sought recovery of ₹2.77 lakh in CENVAT credit claimed on services related to waste disposal and air pollution surveys. Another demand of about ₹3.98 lakh was also raised for a subsequent period between May 2014 and October 2014. The adjudicating authorities confirmed these demands, prompting the company to approach the Tribunal. Before the Tribunal, the appellant argued that the classification issue had already been settled by a Larger Bench ruling in the case of Brindavan Beverages Pvt. Ltd., which held that beverages containing not less than 5% fruit juice must be classified as fruit juice–based drinks under Tariff Item 2202 90 20. The demand of excise duty based on the department’s classification was found to be unsustainable. The Tribunal also examined the denial of CENVAT credit on services used for disposal of industrial waste. The bench noted that industries are required to comply with environmental regulations and directives issued by pollution control authorities. Non-compliance could expose companies and their management to prosecution under environmental laws. Relying on earlier decisions, the Tribunal held that services used for disposal of industrial waste and polluted water in compliance with environmental laws qualify as input services, as they are indirectly related to the manufacture of final products. Therefore, the CENVAT credit claimed on such services was held to be admissible. Another portion of the dispute involved CENVAT credit of ₹1.64 lakh on services used for conducting environmental surveys around the factory premises to check air pollution levels. The Tribunal noted that these surveys were conducted as per the requirements of the company’s principal, Coca-Cola India, to ensure that environmental conditions around the plant met quality standards for beverage production. Observing that the definition of “input services” is broad and includes services used directly or indirectly in relation to manufacturing, the bench ruled that such environmental monitoring activities were integrally connected to the manufacturing process. Accordingly, the Tribunal held that credit on these services could not be denied. Since both the excise duty demand and the denial of CENVAT credit were found to be unsustainable, the Tribunal held that there was no basis for imposing penalties on the company. The Tribunal concluded that all issues raised in the impugned orders had already been settled in favour of the appellant by earlier judicial precedents. Case Details Case Title: Kandhari Beverages Pvt Ltd Versus Commissioner of Central Excise Citation: JURISHOUR-277-CES-2026(CHAN) Case No.: Excise Appeal No. 50938 of 2015 Date: 09.03.2026 Counsel For Appellant: Krati Singh and Shri Monarch Mittal, Advocates Counsel For Respondent: Anurag Kumar and Ms. Amita Gupta, Authorized Representatives Click Here To Read Order Read More: Tax Dept. Can’t Adjust Refund After Arrears Settled Under Amnesty Scheme: Bombay High Court

Minute Maid Nimbu Fresh with 5% Fruit Juice Classifiable as Fruit Juice Based Drink: CESTAT Quashes Excise Duty Demand

Membership Required

Latest articles

Writ: A Virtue of Extraordinary Relief

Large-Scale Pan Masala & Tobacco Evasion Worth Rs. 14 Crore Under Health Security Cess Act, 2025: Meerut Court Sends Director to Judicial Custody

Whether Assistant Commissioner Can Act as ‘Proper Officer’ Without GST Council Recommendation? Madhya Pradesh High Court Quashes Rs. 7 Cr Demand

Jurishour | Tax Law Daily Bulletin : April 25, 2026

More like this

Writ: A Virtue of Extraordinary Relief

Large-Scale Pan Masala & Tobacco Evasion Worth Rs. 14 Crore Under Health Security Cess Act, 2025: Meerut Court Sends Director to Judicial Custody

Whether Assistant Commissioner Can Act as ‘Proper Officer’ Without GST Council Recommendation? Madhya Pradesh High Court Quashes Rs. 7 Cr Demand

About us

Company

Categories