Common parlance test in product classification denied full waiver of duty, while interest and penalty were stayed pending appeal.

In a classification dispute over products claimed as instant food mix, the Tribunal applied the common parlance test and found the goods, on the available material, to consist of minerals and vitamins rather than products known as food or food mix. It held that no prima facie case was made out for complete waiver of the duty demand, so the appellants were required to deposit the duty amount. On the penalty aspect, the show cause notice did not specifically refer to Section 11AC, and the appellants were held to have a prima facie case for waiver of interest and penalty pending disposal of the appeal.

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Issues: Whether the appellants were entitled to waiver of pre-deposit and stay of recovery of duty, interest and penalty in a classification dispute concerning the products claimed as instant food mix.

Analysis: The products were found, on the material before the Tribunal, to consist of minerals and vitamins and were not shown to be known in common parlance as food products or food mix. In classification matters of this kind, the common parlance test is material and the Tribunal found no prima facie case for complete waiver in respect of the duty demand. As regards penalty, the show cause notice did not make a specific reference to Section 11AC, and on that aspect the appellants were found to have a prima facie case for waiver of interest and penalty pending disposal of the appeal.

Conclusion: The appellants were directed to deposit the duty amount, and on such deposit the balance amount, including interest and penalty, stood waived till disposal of the appeal.

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