Milk powder classification and notification-based exemption depended on the product form and the relevant period.

Dairy whitener consisting of partially skimmed milk powder was treated as classifiable under Chapter Heading 0401.13 of the Central Excise Tariff, covering milk powder in the relevant form. On exemption, the product was covered for the earlier period under Notification No. 04/90-CE, while the later exemption regime ceased after rescission, so exemption was unavailable for the subsequent period. The demand was therefore set aside only for the earlier clearances and sustained for the later period, resulting in partial relief based on the notification in force during the relevant time.

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Issues: (i) Whether dairy whitener was classifiable under Chapter Heading 0401.13 of the Central Excise Tariff Act, 1985 or under Chapter Heading 0401.19; and (ii) whether the appellant was entitled to exemption under Notification No. 04/90-CE dated 20.03.1990, including the effect of the subsequent notifications for the later period.

Issue (i): Whether dairy whitener was classifiable under Chapter Heading 0401.13 of the Central Excise Tariff Act, 1985 or under Chapter Heading 0401.19.

Analysis: The product was treated as dairy whitener consisting of partially skimmed milk. The tariff entry under Chapter Heading 0401.13 was held to cover milk powder in the relevant form, including partially skimmed powder, and the product was therefore placed within that heading.

Conclusion: Dairy whitener was classifiable under Chapter Heading 0401.13 of the Central Excise Tariff Act, 1985.

Issue (ii): Whether the appellant was entitled to exemption under Notification No. 04/90-CE dated 20.03.1990, including the effect of the subsequent notifications for the later period.

Analysis: For the earlier period, the product was treated as partially skimmed milk powder covered by the exemption at Serial No. 2 of Notification No. 04/90-CE. The later exemption regime under Notification No. 16/91-CE was in force only until it was rescinded by Notification No. 64/94-CE, and the appellant was not found entitled to exemption for the period after rescission. The demand for the earlier period was set aside, while the demand for the later period was sustained.

Conclusion: The appellant was entitled to exemption for the earlier period, but not for the later period from 02.06.1998 to 17.07.1998.

Final Conclusion: The appeal succeeded only to the extent of the earlier clearances and failed for the later period, resulting in partial relief to the appellant.

Ratio Decidendi: A product consisting of partially skimmed milk powder may fall within the relevant tariff heading for milk powder, and exemption availability depends on the specific notification in force during the relevant period.

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