Imported Cheese Polvaromas classified under CTH 3302 1090 as odoriferous substances not food preparations CTH 2106 9060

CESTAT Chennai classified imported Cheese Polvaromas (semi-finished flavour compound) under CTH 3302 1090 rather than CTH 2106 9060. The tribunal held that since the goods were used as industrial raw materials for manufacturing dry seasoning powder and not directly edible or consumable after minimal processing, they constituted odoriferous substances excluded from Chapter 2106. The products imparted flavour characteristics rather than serving as food preparations. The department's appeal for differential duty was rejected, confirming the lower classification.

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Issues Involved:
1. Classification of imported goods.
2. Invocation of extended period for demand of differential duty.
3. Confiscation of the impugned goods.
4. Imposition of penalties.

Summary:

Classification of Imported Goods:
The primary issue is the classification of "Cheese Polvaromas" under the Customs Tariff Act, 1975. The Department argued that the goods should be classified under CTH 2106 9060 as "food flavouring material," asserting that the goods are derived from cheddar cheese paste and are not synthetic aromas. The Respondent contended that the goods are mixtures of synthetic aromatics and should be classified under CTH 3302 1090. The Tribunal noted that the imported goods are not directly consumable and are used as industrial raw materials, thus fitting the description under CTH 3302 1090, which covers mixtures of synthetic aromatics used in the food industry.

Invocation of Extended Period for Demand of Differential Duty:
The Department invoked the larger period of limitation, alleging willful misclassification by the Respondent. The Respondent countered that there was no misrepresentation or suppression of facts, and the classification was based on available information and previous acceptance by the Department. The Tribunal found no evidence of willful misclassification or suppression, thus rejecting the invocation of the extended period.

Confiscation of the Impugned Goods:
The Department proposed the confiscation of live consignments and past consignments under Section 111(m) of the Customs Act, 1962, on grounds of misdeclaration. The Tribunal, however, found that the goods were correctly classified under CTH 3302 1090 and thus not liable for confiscation.

Imposition of Penalties:
The Department also proposed penalties under Sections 112(a) and 114A of the Customs Act, 1962. The Tribunal held that since the classification under CTH 3302 1090 was correct and there was no misdeclaration or suppression, penalties could not be imposed.

Conclusion:
The Tribunal upheld the classification of the goods under CTH 3302 1090, rejected the Department's appeal, and found no merit in the invocation of the extended period, confiscation, or imposition of penalties. The cross objections filed by the Respondent were disposed of accordingly.

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