Cocoa content test and tariff classification: cereal preparation held outside Heading 19.04 and under Heading 18.04.

A cereal preparation coated with a cocoa-containing food preparation was treated as classifiable under Heading 18.04 rather than Heading 19.04 of the Central Excise Tariff. The cocoa content was found at 15.7% on a defatted basis, exceeding the 6% limit in Chapter Note 3 to Chapter 19, and the challenge that only the HSN method could be used for testing was rejected because the Tariff note was not fully aligned with the HSN. Technical literature and expert opinion supported the department's method, and no contrary expert evidence rebutted the finding. The alternative basis that the product was coated with cocoa preparation also supported exclusion from Heading 19.04.

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Issues: Whether the product known as "Chocos" was correctly classifiable under Heading 18.04 or Heading 19.04 of the Central Excise Tariff Act, 1985, having regard to Chapter Note 3 of Chapter 19 and the method adopted for determining cocoa content.

Analysis: The product was found to be a cereal preparation coated with a food preparation containing cocoa. The chemical test report assessed cocoa content at 15.7% on a defatted basis, which exceeded the 6% limit in Chapter Note 3 to Chapter 19. The objection that cocoa content had to be tested only by the HSN method was rejected, as the Tariff note was not completely aligned with HSN and the method adopted by the department was supported by technical literature and expert opinion. The finding on cocoa content was not rebutted by any contrary expert evidence. The alternative reasoning based on the coating of the product with a cocoa-containing preparation also supported exclusion from Heading 19.04.

Conclusion: The product was held to fall under Heading 18.04 and not under Heading 19.04, and the assessee's challenge to the classification failed.

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