By TIOL News Service

MUMBAI, JULY 02, 2014: THE Revenue is in appeal against the order of the Commissioner(A) classifying the impugned goods “Red Bull Energy Drink” under CTH 2202 90 90 as claimed by the importer.

It is the view of the department that the goods are correctly classifiable under 2202 10 10 as they satisfy the description of the goods mentioned therein.

Whereas it is the submission of the respondent that the impugned goods containsWater, Glucose, Vitamins, Caffeine, Taurine etc. which are flavoured with essences and colours; it is not merely mineral water or aerated water but an energy drink which contains caffeine etc. and after drinking of the said drinks, energy boosts. That the Food Safety and Standards Authority of India (FSSAI) has also observed that the said product is caffeinated beverage and the same cannot be used more than two cans a day; that the Department of Trade and Taxes also held that the “Energy Drinks are Proprietary Foods” which are not covered under the category of aerated drinks; that the said goods are classifiable under CTH 2202 90 90 and the same has been aligned with the Harmonized Customs Tariff; that the US Customs Ruling on the Energy Drink ‘Missile' exported from Poland into USA proves classification under 2202 90 90 as per Harmonized Tariff Schedule; as per Rule 3(c) of Rules of Interpretation of Schedule,for goods classifiable under two or more headings, then the goods are to be classified under heading occurring last in numerical order among those equally meriting consideration.

The Bench observed - that the ingredients of product in question are Taurine, Glucuronolactone, Caffeine, Inositol, B Vitamins, Sucrose and Glucose and hence the product cannot be classified under 2202 1010 as the scope of that classification is limited to mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured. Moreover, the Harmonized Tariff Schedule classified the product in question as 2202 90 90. The FSSAI also held that the said product is caffeinated beverage and not mineral waters and aerated waters. Moreover, the impugned product “Energy Drink” is not recommended for children, pregnant or lactating mothers and persons sensitive to high doses of caffeine. In common parlance also, it is known as energy drink other than mineral water and aerated water. Therefore, it is held that this product contains caffeinated beverage, mineral water and aerated waters, therefore, the appropriate classification is 2202 90 90. The Bench also adv erted to its decision in Waterways Shipyard Pvt. Ltd. where it is held that Rule 3(c) of the Rule for Interpretation of the Schedule comes into play.

Holding that there is no infirmity in the order of the Commissioner (Appeals), the same was upheld and the Revenue appeal was dismissed.

In passing: It gives you wings. Red Bull is an energy drink sold by Austrian company Red Bull GmbH, created in 1987. In terms of market share, Red Bull is the highest selling energy drink in the world, with 5.387 billion cans sold in 2013.

(See 2014-TIOL-1190-CESTAT-MUM)