Nil-rate exemption for packaged airline food narrowed pre-deposit; only duty for March-April 2006 required deposit

Packed food supplied to aircrafts was treated as prima facie excisable despite short shelf life, because it was packed and kept under controlled temperature for onboard consumption. The Tribunal also found prima facie support for the claim that the goods could fall within the nil-rate entry for food preparations not cleared in sealed containers, noting the department's tariff classification was broad and no specific entry covered ready-to-eat packaged food. As the nil-rate entry was inserted only from 04.05.2006, the demand for March and April 2006 was prima facie outside its scope. Waiver was granted in part, with pre-deposit confined to duty for those two months and the balance stayed.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of duty demanded on packed food supplied to aircrafts, and whether the goods were prima facie covered by the nil-rated entry in the exemption notification.

Analysis: The goods were held prima facie to be excisable notwithstanding their short shelf life, as they were packed and maintained in controlled temperature for consumption on board flights. However, the Tribunal found prima facie force in the contention that the goods were covered by the entry for food preparations not cleared in sealed containers, since the tariff heading relied upon by the department was broad and there was no specific tariff entry for ready-to-eat packaged food. The Tribunal also noted that the nil-rate entry had been inserted only from 04.05.2006, so the demand for March and April 2006 was, prima facie, outside its scope.

Conclusion: Waiver was granted in part. Pre-deposit was restricted to the duty attributable to March and April 2006, and deposit of that amount was directed while the balance duty and penalties were stayed pending the appeals.

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