Snack food classification under Chapter 21 supports prima facie waiver of pre-deposit and stay of recovery.

In a classification dispute over snack foods, the tribunal found a strong prima facie case that the goods were not confined to Chapter 19.04 as contended by the revenue, because the materials showed ingredients such as gram flour, wheat fibre, edible oil and seasoning. Prima facie reliance was also placed on Note 10 to Chapter 21, which treats namkeens and similar products as classifiable under sub-heading 2108.99 irrespective of ingredients. On that basis, the tribunal held that waiver of pre-deposit was justified and ordered pre-deposit of duty and penalty waived with recovery stayed pending appeal.

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Issues: Whether the applicants had made out a prima facie case for waiver of pre-deposit and stay of recovery in a classification dispute concerning whether the products were classifiable under Chapter 19.04 or under Chapter 21.08, and whether Note 10 to Chapter 21 supported the claimed classification.

Analysis: The products were found, at least prima facie, to be manufactured by a process comparable to that considered in the cited precedent on similar snack foods. The materials placed showed that the disputed goods contained ingredients beyond cereals or cereal products, including gram flour, wheat fibre, edible oil and seasoning, and therefore did not, prima facie, fit Chapter 19.04 in the manner contended by the revenue. The reasoning also found prima facie support in Note 10 to Chapter 21, which treats namkeens and similar products as classifiable under sub-heading 2108.99 irrespective of ingredients, and in the view that the competing tariff entry under Chapter 19.04 was not the proper parent heading on the facts presented.

Conclusion: A strong prima facie case for waiver of pre-deposit was made out, and pre-deposit of duty and penalty was waived with recovery stayed pending the appeal.

Ratio Decidendi: Where the materials disclose a strong prima facie case that snack foods are not confined to the tariff heading invoked by the department and are covered by the broader Chapter 21 entry, waiver of pre-deposit and stay of recovery are justified.

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