2005 (8) TMI 491 - AT - Central Excise

Tribunal rules on eligibility for Nil rate of duty for food products

The Tribunal ruled in favor of the manufacturers in a case involving the interpretation of Notifications No. 12/90 and No. 4/93 for determining the ... Ice-cream - Notification - Exemption Criteria Issues:Interpretation of Notification No. 12/90 and Notification No. 4/93 for determining eligibility for Nil rate of duty for certain food products.Analysis:The case involved appeals by the Revenue against the decision of the lower authorities granting Nil rate of duty benefit to food products like Orange Fruity, Raspberry Kupple, Mango Fruity, and others, manufactured and cleared as 'other than Ice-Cream.' The dispute revolved around the interpretation of Notification No. 12/90 and Notification No. 4/93. The lower authorities had considered the milk fat content in the products to determine their classification as Ice-Cream, citing the Prevention of Food Adulteration Act (PFA). However, the Revenue contended that the criteria for defining Ice-Cream should be as per the explanation in the Notifications themselves and not based on external laws like the PFA.Upon analysis, the Tribunal acknowledged the Revenue's argument that the definition of Ice-Cream within the Notifications should be the primary consideration. The Notifications specified that Ice-Cream must be commonly known as such and prepared using milk, cream, or milk products. The Tribunal noted that the products in question, such as Orange Fruity and Mango Kupple, were not identified as Ice-Cream by the manufacturers and were cleared as distinct from Ice-Cream. The absence of evidence demonstrating the common recognition of these products as Ice-Cream further supported this conclusion. Consequently, as the first criteria of being commonly known as Ice-Cream was not met, the Tribunal ruled that the products fell under the category of 'other than Ice-Cream,' making them eligible for the Nil rate of duty under Serial No. 5 of the Notifications.In conclusion, the Tribunal rejected the Revenue's appeals, emphasizing that the lower authorities erred in applying the PFA criteria instead of relying on the definitions provided in the Notifications themselves. By interpreting the Notifications' criteria for Ice-Cream classification, the Tribunal determined that the disputed products did not qualify as Ice-Cream and upheld the benefit of Nil rate of duty for the manufacturers.