Product classification by composition and use upheld, while SSI exemption claim was remanded for fresh factual determination.

Goods described as a nutrition and natural health supplement, and supported by their composition and test report, were treated as a food supplement classifiable under Heading 2108.99 rather than Heading 1901.92. The product's label, ingredients and use were considered consistent with the appellate finding, so the classification was sustained. On the SSI exemption claim under Notification No. 8/2001, para 4 turned on factual ownership of the brand name during the relevant period. Because fresh evidence had a bearing on that question and entitlement had to be established by the assessee, the exemption issue was remanded to the original authority for de novo consideration after hearing.

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Issues: (i) Whether the goods were classifiable under Heading 1901.92 as food preparation or under Heading 2108.99 as edible preparation. (ii) Whether the respondent's claim for SSI benefit under Notification No. 8/2001 was hit by para 4 thereof.

Issue (i): Whether the goods were classifiable under Heading 1901.92 as food preparation or under Heading 2108.99 as edible preparation.

Analysis: The product label described the goods as a nutrition supplement and natural health supplement, and its composition showed protein, fats, vitamins, minerals and allied ingredients consistent with a food supplement. The record did not substantiate the Revenue's claim that the goods answered the tariff description of food preparation under Heading 1901.92. The appellate authority's finding that the product fell under Heading 2108.99 was supported by the composition, use and test report.

Conclusion: The goods were correctly classified under Heading 2108.99 and not under Heading 1901.92.

Issue (ii): Whether the respondent's claim for SSI benefit under Notification No. 8/2001 was hit by para 4 thereof.

Analysis: The ownership of the brand name during the material period was a factual question requiring fresh appreciation of evidence. The additional documents produced by the respondent were considered material to that question. As entitlement to exemption had to be established by the assessee, the matter required reconsideration by the original authority with an opportunity of hearing.

Conclusion: The issue was remanded to the original authority for de novo consideration on the basis of fresh evidence.

Final Conclusion: The classification finding in favour of the respondent was sustained, while the SSI exemption issue was sent back for fresh decision on evidence.

Ratio Decidendi: A product is to be classified according to its composition, use and tariff description, and where exemption depends on factual brand-name ownership, the assessee bears the burden of establishing entitlement and the matter may require de novo factual determination.

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