Excise classification of boiled milk fails where product is not marketable as condensed milk or packed in unit containers.

Boiled or evaporated milk with about 80% moisture was held not to be concentrated (condensed) milk under Chapter sub-heading 0401.14 because it did not meet commercial or IS specifications, was cleared in empty drums without predetermined quantity, was not packed in unit containers, had a short shelf life, and was not marketed as condensed milk. Applying the settled classification principle that the tariff entry requires marketability and compliance with the unit-container and ordinarily intended for sale conditions, the revenue classification failed. The demand, related declaration requirements, and penalty were therefore not sustainable, and the appeal was rejected.

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Issues: Whether the product cleared as boiled milk with reduced moisture was classifiable as concentrated (condensed) milk under Chapter sub-heading 0401.14, and whether it satisfied the requirements of being put up in unit containers and ordinarily intended for sale.

Analysis: The product was found to be only boiled or evaporated milk with about 80% moisture, not standardised condensed milk meeting the commercial and IS specifications for sale. It was cleared in empty drums without pre-determined quantity, was not packed in unit containers, had a short shelf life, and was not marketed as condensed milk. Applying the settled principle that excise classification under the relevant tariff entry requires marketability and compliance with the unit-container and intended-for-sale requirements, the revenue's classification failed.

Conclusion: The product was not classifiable under Chapter sub-heading 0401.14 and the demand, related declaration requirements, and penalty could not be sustained. The appeal was rejected.

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