2011 (1) TMI 732 - AT - Central Excise

Tribunal affirms 'New Maltodex' as food prep under Heading No. 1901 for excise

COMMISSIONER OF C. EX., MUMBAI Versus RAPTAKOS BRESS & CO. LTD.

The Tribunal rejected the department's appeal and affirmed the lower appellate authority's decision to classify 'New Maltodex' as a food preparation based ... Classification - Notification No. 67/95 dated 16-3-95 as amended - The product contains malto dextrins, vegetable oil, vitamins, minerals, etc. and has a DE% (reducing sugar content) in the range of 17% to 27% and free starch is absent - The classification issue related to whether the product would fall under 1702.19 as “other sugar” or under 1702.29 as “preparation of other sugar - As can be seen from the manufacturing process, which is not in dispute at all, the starting point of manufacture is maize starch or tapioca starch, which is solubilized with the addition of acid/enzyme - The chemical examiner’s report clearly shows that the product cannot be considered as maltose dextrin falling under heading No. 17.02 and since the heading No. 1901 covers food preparations of flour, meal, starch or malt extract, the product new maltodex product is classifiable as food preparation based on starch - the expert opinion of the department’s own chemical examiner favours classification under heading 19.01 - Decided in favor of the assessee Issues:Classification of the product 'New Maltodex' under sub-heading No. 1702.29 or Heading No. 1901 for excise purposes.Analysis:1. The departmental appeal challenged the order setting aside the classification of 'New Maltodex' under sub-heading No. 1702.29 by the Commissioner of Central Excise (Appeals), Mumbai. The product was manufactured by Raptakos Brett & Co. Ltd., with a specific composition and manufacturing process.2. The main issue revolved around whether 'New Maltodex' should be classified under Heading No. 1702 as a preparation of other sugars or under Heading No. 1901 as a food preparation of starch. The product's composition included malto dextrins, vegetable oil, vitamins, minerals, with a DE% in a specific range, and free starch was absent. The detailed manufacturing process was crucial in determining the classification.3. The department argued that the manufacturing process of 'New Maltodex' closely resembled the production of other sugars under Heading No. 1702, citing HSN explanatory notes. They relied on a previous judgment regarding malto dextrose classification under Heading No. 1702.29 as 'preparation of other sugars.'4. Conversely, the respondent contended that 'New Maltodex' was a food preparation of starch falling under Heading No. 1901. They supported their argument with a chemical examiner's report highlighting the product's composition and characteristics aligning with food preparations based on starch.5. The lower appellate authority considered the chemical examiner's report and distinguished the case law cited by the department, emphasizing the unique composition and manufacturing process of 'New Maltodex.' The authority upheld the classification under Heading No. 1901 and granted exemption under Notification No. 67/95 for captive consumption in infant food production.6. The Tribunal analyzed the facts, manufacturing process, and expert opinions presented by both sides. It noted the importance of expert opinions in cases where chemical composition influences classification and upheld the lower appellate authority's decision to classify 'New Maltodex' as a food preparation based on starch under Heading No. 1901.7. Ultimately, the Tribunal rejected the department's appeal, affirming the lower appellate authority's classification and exemption decision. The judgment highlighted the significance of expert opinions and detailed analysis in determining the appropriate classification for excise purposes.