Product classification for confectionery exemption turns on composition and test report, not market description.

Classification of the manufactured goods depended on their composition and test report. Because the goods contained no cocoa butter and only 8% fat, they did not meet the characteristics of white chocolate and were correctly treated as sugar confectionary. On that basis, the exclusion for white chocolate or bubble gum in the exemption entries did not apply, so the benefit under Notification No. 03/2006-CE and Notification No. 12/2012-CE remained available.

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Issues: Whether the goods manufactured by the appellants were classifiable as white chocolate or as sugar confectionary, and whether they were entitled to exemption under Notification No. 03/2006-CE dated 01/03/2006 and Notification No. 12/2012-CE dated 17/03/2012.

Analysis: The classification dispute turned on the composition of the products and the test report. White chocolate, as understood from the chapter note and explanatory material, requires cocoa butter and a higher fat content, whereas the test report showed absence of cocoa butter and only 8% fat content. On that basis, the goods were not white chocolate. They fell within sugar confectionary and did not answer the exclusion for white chocolate or bubble gum in the exemption entries.

Conclusion: The exemption was available and the denial of benefit was unsustainable.

Final Conclusion: The impugned orders were set aside and the appeals were allowed with consequential relief.

Ratio Decidendi: Where the test report and applicable product description show that the goods do not contain cocoa butter and do not satisfy the characteristics of white chocolate, they cannot be denied exemption reserved for sugar confectionary merely because they are marketable as confectionery products.

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