Tariff classification of Milk Treat turns on cocoa butter not being treated as cocoa, keeping it in the other wafers heading.

Milk Treat was not classifiable as wafers coated with chocolate or containing chocolate under Tariff Heading 1905 32 11 because that heading applies only where the product contains chocolate, and the tariff scheme and HSN notes distinguish chocolate from white chocolate and from cocoa butter. On the admitted ingredients, the product contained cocoa butter rather than cocoa or chocolate, and cocoa butter is not treated as cocoa for classification purposes. The view that cocoa butter is equivalent to cocoa was rejected, and the product was correctly classified as other wafers under Tariff Heading 1905 32 19 in favour of the assessee.

---

---

Issues: Whether Milk Treat was classifiable under Tariff Heading 1905 32 11 as wafers coated with chocolate or containing chocolate, or under Tariff Heading 1905 32 19 as other wafers.

Analysis: Tariff Heading 1905 32 11 applies only to wafers coated with chocolate or containing chocolate. The relevant tariff scheme and HSN explanatory notes showed that Chapter 18 covers chocolate and other preparations containing cocoa, but expressly excludes white chocolate. The explanatory notes to Heading 17.04 specifically include white chocolate and state that it is composed of sugar, cocoa butter, milk powder and flavouring agents, but not more than mere traces of cocoa, and that cocoa butter is not regarded as cocoa. On the admitted ingredients and the material on record, the product contained cocoa butter and not cocoa or chocolate. The reasoning adopted by the lower authorities that cocoa butter is equivalent to cocoa was incorrect.

Conclusion: Milk Treat was not covered by Tariff Heading 1905 32 11 and was correctly classifiable under Tariff Heading 1905 32 19 in favour of the assessee.

---