Imported 'tomato dry flavour' reclassified under CTH 3302 1010, not 2106 9060. Appeal allowed, demand set aside.

The Tribunal determined that the imported 'tomato dry flavour' should be classified under Customs Tariff Heading (CTH) 3302 1010, rather than CTH 2106 9060 as contended by the Revenue. It found the product to be a synthetic mixture of odoriferous substances used as raw materials in the food industry, not intended for direct consumption. Relying on precedent, the Tribunal allowed the appeal, setting aside the demand for differential duty and interest under the Customs Act, 1962.

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Issues Involved:
1. Classification of imported 'tomato dry flavour' under the correct Customs Tariff Heading (CTH).
2. Eligibility for concessional rate of Basic Customs Duty (BCD) under Customs Notification No. 21/2002.

Summary:

Issue 1: Classification of 'Tomato Dry Flavour'

The appellant imported 'tomato dry flavour' and classified it under CTH 3302 1010 to avail a concessional BCD rate of 10% under Customs Notification No. 21/2002. The adjudicating authority reclassified it under Tariff Item 2106 9060, confirming the demand for differential duty with interest under Section 28 and 28AA of the Customs Act, 1962. The appellant contended that the product is not a food preparation but a mixture of odoriferous substances used as raw material in the food industry, classifiable under CTH 3302. They argued that the product is a synthetic mixture, not directly consumable, and relied on the Tribunal's decision in M/s. Britco Foods Company Ltd. v. Commissioner of Central Excise, Pune, which classified similar products under CTH 3302.

Issue 2: Eligibility for Concessional Rate of BCD

The appellant argued that the product is not a foodstuff but an industrial raw material for flavour blending, thus not fitting under CTH 2106, which covers food preparations for direct or indirect human consumption. They highlighted that the product contains synthetic and natural odoriferous substances, qualifying it for classification under CTH 3302. The Revenue maintained the classification under CTH 2106, arguing that the product is a flavour blend for food applications.

Judgment:

The Tribunal examined the Chapter Headings and HSN Notes for 2106 and 3302. It noted that CTH 2106 covers food preparations for direct or indirect human consumption, while CTH 3302 includes mixtures of odoriferous substances used as raw materials in the food industry. The Tribunal found that the imported product is a synthetic mixture of odoriferous substances, not meant for direct consumption, fitting under CTH 3302. It referenced the Tribunal's decision in M/s. Britco Foods Company Ltd., upheld by the Supreme Court, which excluded such preparations from CTH 2106 and classified them under CTH 3302.

Conclusion:

The Tribunal concluded that the imported 'tomato dry flavour' is correctly classifiable under CTH 3302 1010, setting aside the impugned order and allowing the appeal with consequential relief as per the law.

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