Tariff entry for prepared foods applies only to unit containers intended for sale; captive-consumption milk powder was not dutiable.

Whole milk powder and skimmed milk powder kept in bags for captive consumption, and not ordinarily intended for sale, did not fall within Item 1B of the Central Excise Tariff. Item 1B applied only to prepared or preserved foods put up in unit containers and ordinarily intended for sale; mere storage for preservation was insufficient. On that construction, the goods were not liable to central excise duty under the entry, and the demand was not sustainable.

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Issues: Whether whole milk powder and skimmed milk powder stored in bags for captive consumption, and not ordinarily intended for sale, fell within Item 1B of the Central Excise Tariff and were liable to central excise duty.

Analysis: Item 1B covered prepared or preserved foods only when they were put up in unit containers and ordinarily intended for sale. The goods in question were stored for captive consumption in the manufacture of milk products and were not intended for sale as such. On that footing, they did not satisfy the tariff requirement. The reasoning adopted was consistent with the view that mere packaging for preservation does not by itself attract the tariff entry unless the statutory conditions of unit containers and sale-intent are met.

Conclusion: The goods were not liable to duty under Item 1B, and the challenge to the demand succeeded.

Ratio Decidendi: Prepared or preserved foods are chargeable under Item 1B only if they are put up in unit containers and ordinarily intended for sale; goods kept for captive consumption do not fall within that entry.

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