Food supplement classification and extended limitation under excise tariff turned on chapter notes and absence of suppression.

Goods described in the record as food supplements were held classifiable under Chapter Heading 2106 90 99, because Note 3 to Chapter 21 confines homogenised composite food preparations to finely homogenised mixtures put up for retail sale as infant food or for dietetic purposes in specified small containers, which these goods did not satisfy. On limitation, invocation of the extended period for differential duty was rejected for want of specific evidence of deliberate suppression with intent to evade duty, so only the normal period applied. The matter was remitted for fresh quantification of duty for the permissible period alone.

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Issues: (i) Whether the impugned goods were classifiable as homogenised composite food preparations under Chapter Heading 2104 or as food supplements under Chapter Heading 2106 90 99 of the Central Excise Tariff; (ii) Whether invocation of the extended period for demand of differential duty was sustainable.

Issue (i): Whether the impugned goods were classifiable as homogenised composite food preparations under Chapter Heading 2104 or as food supplements under Chapter Heading 2106 90 99 of the Central Excise Tariff.

Analysis: The classification dispute was decided by examining the chapter notes and the chapter heading descriptions. Note 3 to Chapter 21 confines homogenised composite food preparations to finely homogenised mixtures put up for retail sale as infant food or for dietetic purposes in specified small containers. The goods in question were found not to satisfy that description. The literature on record showed them to be food supplements, and Chapter Heading 2106 was treated as the appropriate residuary entry for such preparations not elsewhere specified or included. The HSN explanatory notes for Chapter 21.04 and Chapter 21.06 were also relied upon, with the latter expressly covering preparations described as food supplements.

Conclusion: The goods were rightly classifiable under Chapter Heading 2106 90 99 and not under Chapter Heading 2104.

Issue (ii): Whether invocation of the extended period for demand of differential duty was sustainable.

Analysis: The demand for the longer period was rejected for want of specific evidence of deliberate suppression with intent to evade duty. In the absence of such proof, only the normal period could be applied, and the duty demand required recalculation for the permissible period alone.

Conclusion: Invocation of the extended period was not sustainable and the demand was confined to the normal period.

Final Conclusion: The classification finding went in favour of Revenue, while the limitation finding went in favour of the assessee, and the matter was sent back only for fresh quantification of duty for the normal period.

Ratio Decidendi: Goods answering the description of food supplements, and not the specific conditions prescribed for homogenised composite food preparations, fall under the residuary food-preparation entry; extension of the limitation period requires proof of deliberate suppression with intent to evade duty.

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