2017 (4) TMI 1481 - AT - Central Excise

Classification of NESLAC Nutritious Milk Drink under Central Excise Tariff Act upheld. Artificial flavoring doesn't alter classification.

Nestle India Limited Versus CCE, Delhi

The Tribunal classified the NESLAC Nutritious Milk Drink under heading 0404 90 00 of the Central Excise Tariff Act, 1985, based on the essential nature of ... Classification of goods - NESLAC Nutritious Milk Drink for growing kids - whether classified under tariff item 0404 90 00 of the Central Excise Tariff Act, 1985 or under tariff heading 1901? - the department was of the view that the addition of flavour in the product would take it out of CETH 0404. HELD THAT:- The identical issue has come up in the appellant's own case NESTLE INDIA LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE (LTU) , DELHI [ 2006 (3) TMI 523 - CESTAT, NEW DELHI ] where it was held that there is no justification to shift the classification of the main product from 0404 to 1901, on account of addition of a minuscule quantity of flavouring substance. Thus, the proper classification for the impugned goods will be under heading 0404 90 00 of the Central Excise Tariff Act, 1985 as claimed by the appellant - appeal allowed - decided in favor of appellant. Issues: Classification of NESLAC Nutritious Milk Drink under Central Excise Tariff Act, 1985Analysis:1. Issue: Classification of NESLAC Nutritious Milk Drink under Central Excise Tariff Act, 1985.- Summary: The appellant was engaged in the manufacture of NESLAC Nutritious Milk Drink and cleared the goods without duty payment under tariff item 0404 90 00. The department sought duty by classifying the product under tariff heading 1901 due to the addition of flavor. The appellant appealed against the demand.- Judgment: The Tribunal referred to relevant HSN Notes of tariff heading 1901 and 0404 to determine the classification. It was observed that the addition of artificial flavoring substance does not change the essential nature of the product from what is covered under 0404. The Tribunal also highlighted a previous case where milk shake mixes containing stabilizers were classified under 0404 despite not being specifically mentioned in Chapter Note 4. Therefore, the Tribunal classified the NESLAC Nutritious Milk Drink under heading 0404 90 00, allowing the appeal.2. Conclusion: The Tribunal set aside the department's order and allowed the appeal, classifying the NESLAC Nutritious Milk Drink under heading 0404 90 00 of the Central Excise Tariff Act, 1985 based on the essential nature of the product and the addition of a small quantity of flavoring substance not altering its classification.