Tomato ketchup classification as sauce upheld, securing exemption and rejecting treatment as a mixed condiment.

Tomato ketchup made from tomato paste and other ingredients was treated as a sauce under CET sub-heading 2103.10 because the HSN explanatory note to heading 21.03 expressly includes tomato ketchup among sauces and preparations therefor. The exclusion in the impugned order was based on a misreading of that note, since the reference to mixed condiments and mixed seasonings did not override the specific inclusion of sauces. The product was therefore eligible for exemption under Sr. No. 10 of Notification No. 6/2002-CE, and the duty demand, educational cess and penalty were set aside.

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Issues: Whether tomato ketchup manufactured from tomato paste and other ingredients was classifiable as a sauce eligible for exemption under Sr. No. 10 of Notification No. 6/2002-CE, or whether it was to be treated as a mixed condiment or mixed seasoning outside the notification.

Analysis: The product was held to fall under CET sub-heading 2103.10. The exclusion adopted in the impugned order rested on a misreading of the HSN explanatory note to heading 21.03. That note covers two separate categories, namely sauces and preparations therefor, and mixed condiments and mixed seasonings. The examples in the note specifically include tomato ketchup as a sauce. The reference in the Chapter 9 note to mixtures that constitute mixed condiments or mixed seasonings did not justify confining the product to that category alone, since the applicable HSN note for heading 21.03 expressly embraces sauces and preparations therefor.

Conclusion: The product was eligible for exemption under Sr. No. 10 of Notification No. 6/2002-CE and could not be denied the benefit merely by characterising it as a mixed condiment or mixed seasoning.

Final Conclusion: The duty demand, educational cess and penalty were set aside and the appeal was allowed.

Ratio Decidendi: Where the relevant HSN explanatory note expressly includes a product as a sauce within heading 21.03, the product cannot be denied exemption under a notification covering sauces merely by labelling it as a mixed condiment or mixed seasoning.

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