SC to decide on Nimbooz

‘Nimbooz’ is to be decided whether a fruit Juice or lemonade by the Supreme Court.

Who does not want to have lemonade in summer! With the soaring temperatures in the climate, the demand for juices and lemonades also increases. However, if you come across ‘Nimbooz’ to be trending on social media then you must know that it’s not because of the increase in demand of the public but rather the involvement of the Supreme Court in the categorization of the drink.

Pepsi Co launched Nimbooz in 2013. Immediately after its launch, it has been debated whether it is to be classified as fruit Juice or lemonade. The reason behind the categorization of the drink is because of the claim that Nimbooz is lemonade made of real lemon juice without fizz. This led to the debate on the categorization of the drink whether it is to be considered lemonade or fruit pulp-based juice.

The question of categorization of Nimbooz whether it is a lemonade or fruit Juice came into the view when a petition for it was filed by Aaradhna Foods in 2015. The case has been pending in the court since then for a judgment to be delivered pertaining to its categorization. 

Controversy:

The controversy of Nimbooz arose due to the dispute between Aaradhna Foods and Central Excise pertaining to the Excise duty to be imposed on the drink by a petition filed by Aaradhna Foods. It was put forward by the Excise Department that the drink should be categorized under the provisions 90/20 of the Central Excise and Service Tax Hyderabad, that is CETH 2022 because it was claimed that the drink was made from real fruit pulp or juice. Whereas, it was argued by Aardhana Foods that Nimbooz is lemonade. Thus it must be categorized under the first schedule of the Central Excise Tariff Act 1985 under provision 10/20 of CETH 2022.

Even after the plea of Aaradhna Foods’ petition was accepted by the Excise Department from April to December 2013 however, later the Department stuck to its previous categorization of the drink. The contention put forward by the Department in favor of sticking to their earlier decision by citing similar other products where the Goods and Service Tax is levied accordingly. According to the current tax, aerated drinks attract a Goods & Service Tax of 28 percent plus a compensation cess of 12 percent whereas non-aerated drinks (including fruit juice-based drinks) largely attract a GST of 12 percent or some attract a GST of 18 percent. 

Present Status of Nimbooz:

As mentioned earlier, the petition filed by Aaradhna Foods to put the drink under the category of lemonade instead of fruit juice. Presently Nimbooz is categorized as fruit juice. However, the manufacturer intends to categorize the drink as lemonade. The present category was decided in November last year by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) of the Allahabad Bench. The classification of Nimbooz as a fruit juice was based on the decision of the Bench of justices Dilip Gupta and P Venkata Subba Rao bringing the drink under tariff Item 2202 90 20 of the Central Excise Tariff. 

Role of Supreme Court:

A two-judge Bench was formed of Justice MR Shah and BV Nagarathna for hearing this case and giving closure to the case. The bench held that Nimbooz shall be categorized under CETH 10 20 instead of the previous tariff which is Tariff under 20220 90 20 Tariff Central Excise.

The decision of the Supreme Court in the categorization of Nimbooz is important as it will help in determining the excise duty of the drink.

Conclusion:

This case of categorization has been trending and the judiciary has been mocked for looking into the matter. As you all know several serious matters are pending and need to be decided for justice to be delivered on time. Such contention put forward by companies must be dealt with by other competent authorities thereby disposing of the cases and saving time for judicial bodies such as the Supreme Court. Nonetheless, let’s stay tuned for the interesting case to be decided by the Supreme, and shall you be having lemonade or fruit juice.

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