Mandarin (Kinow) Concentrate Classified As Residual Citrus Entry For Duty, Not Orange Juice: CESTAT Mumbai

On 8 May, the Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) held that Mandarin (Kinow) Frozen Concentrate falls under the residual entry for “juice of any other single citrus fruit” under Tariff Item 2009 3900 and not under the “orange juice” category under Tariff Item 2009 1100, thereby upholding the higher rate of customs duty.

President Justice Dilip Gupta and Technical Member P. Anjani Kumar upheld the Revenue's classification and sustained the duty demand, while granting relief to the importer on limitation and penalty. They observed:

“......when the Customs Tariff Act, under Heading 2009, creates a specific sub-heading for "Orange juice" and a separate residuary sub-heading for "Juice of any other single citrus fruit," the term "Orange" must be read consistently with the meaning ascribed to it elsewhere in the Act. The application of the common parlance test must not contradict or run counter to the overall statutory framework as held in Welkin Foods. It would be impermissible to interpret "Orange juice" under Heading 2009 as encompassing mandarin juice, when the very same Act, classified mandarins separately from oranges”.

The dispute arose from imports made by Varun Beverages Ltd during 2019–2021 under 26 Bills of Entry. The company classified Mandarin (Kinow) Frozen Concentrate as frozen orange juice under Tariff Item 2009 1100, attracting a lower duty.

During audit, the department reclassified the goods under Tariff Item 2009 3900 as juice of other citrus fruits and raised a differential duty demand of Rs. 3,10,28,387 under Section 28(4) of the Customs Act, 1962, along with interest under Section 28AA.

The Revenue argued that the tariff clearly distinguishes oranges and mandarins under Chapter 8, and the same distinction continues in Chapter 20, where orange juice carries specific sub-headings while other citrus juices fall under the residual entry. It contended that mandarin juice, not being expressly covered under orange juice entries, must fall under Tariff Item 2009 3900.

Varun Beverages Ltd contended that mandarin is commercially known as “mandarin orange” and therefore qualifies as orange juice under Tariff Items 2009 1100 to 2009 1900. It further argued that the existence of a specific entry for orange juice excludes application of the residuary entry.

The Tribunal examined the tariff structure and noted that Chapter 8 separately classifies oranges and mandarins. It held that this statutory distinction continues in Chapter 20, which separately provides for orange juice and reserves the residuary category for other citrus juices under Tariff Item 2009 3900.

Rejecting the importer's contention, the Tribunal held that mandarin (Citrus reticulata) is a distinct citrus fruit and cannot be treated as orange for classification purposes. It observed that classification must follow the scheme of the tariff and cannot depend on common parlance when the statute clearly differentiates the products. It stated:

“.....items are to be classified in terms of the heading, relevant chapter, and section notes must be referred to as per Rule 1 of General Rules for the Interpretation of import tariff. If the legislature intended that orange juice is to be classified under Tariff Item 20091100, it is the orange juice that gets classified under that head and not any other juice which could be either akin to or are interchangeably used....”.

It further held that the residuary entry under 2009 3900 applies to citrus juices not specifically named in the tariff and therefore mandarin concentrate correctly falls under that category. The Tribunal observed:

“.....if "orange" under Heading 2009 were to be interpreted in its common parlance sense to include mandarins, it would directly contradict the statutory scheme under Heading 0805. The term "orange" must be read consistently across the tariff.”

The Bench also added that “the mandarin orange concentrate imported by the appellants is correctly classified by the Revenue under Tariff Entry 2009 3900 as juice or concentrate of other citric fruits....”.

On limitation, the Tribunal held that the dispute arose from audit and involved pure classification issues, with no evidence of suppression or wilful misstatement. It therefore ruled that the extended period under Section 28(4) could not be invoked and set aside the penalty under Section 114A and redemption fine.

Accordingly, the CESTAT partly allowed the appeal, upheld classification under Tariff Item 2009 3900 in favour of the Revenue, and granted relief to Varun Beverages Ltd on limitation and penal consequences.

For Appellant: Prabhat Kumar, Advocate

For Respondent: Deepak Sharma, Authorised Representative