2024 (8) TMI 1668 - AT - Central Excise

Classification of Kopiko as sugar confectionery based on essential character; reclassified under heading 1704, not 2101.

Classification dispute over a confectionery product turned on tariff interpretation: the essential character and most specific description rules were ... Classification of goods - product 'Kopiko' as excisable goods under the Central Excise Tariff - Sugar Confectionery (not containing cocoa) - Preparations with a basis of extracts, essences or concentrates or with a basis of coffee - General Rules for the Interpretation of this Schedule - Rule 3(a) heading which provides the most specific description - Essential character - Whether the goods is classifiable under Central Excise Tariff Act under 1704 as claimed by the appellant or under 2101 as claimed by the revenue. - HELD THAT:- We find that the product manufactured by the appellant namely Kopiko based on its quantum of ingredients contained in the said product. Since the product contain more than 74% sugar and glucose. These ingredients are basis of the product, the flavour coffee was used only to the extent of 1.57% that for giving flavor and not contribute in the main product i.e. confectionery. Therefore, the product Kopiko by any imagination cannot be classified under 2101 1200 for the simple reason that it is not preparations with basis of coffee. The basis of the product is sugar and glucose and undisputedly the product is sugar confectionery not containing cocoa. Even as per the general Rule of interpretation of Central Excise Tariff the same support to the plea of the appellant. In the present case as above most specific description applies to the appellant's product is description given in heading 1704 and the description given in 2101 is more general for the reason that the sugar confectionery is specific product whereas the preparations with basis of extracts /essences/concentrates or basis of coffee is more general description which may apply to many product whereas the sugar confectionery is the description which is for only one product. Therefore, the description under 1704 is more specific and the description given in 2101 is more general. Accordingly, as per the principal of interpretation Rule 3A goods of the appellant is correctly classifiable under 1704. As per the value of this evidence the appellants get the support in their case. There is submission of the appellant that the original assessment once made on bill of entry is not challenged becomes final. The Custom Authority having been convinced that the product classification under chapter 17 cleared the goods at concessional rate of duty. We also referred to the Judgment of S R Foils & Tissues Limited Vs. Commissioner of Central Excise, Jaipur [2013 (8) TMI 534 - CESTAT NEW DELHI], which was upheld by the SC wherein it is held that precedents decision or classification adopted by foreign countries on classification of goods have a persuasive value. In the present case also very product Kopiko were supplied to other country wherein the classification of goods has been accepted as under 1704. Therefore, this also support the case of the appellant. As per our above discussion and finding we are of the view that appellants product namely Kopiko is correctly classifiable under 1704 9090 and not under 2101 1200. Accordingly, the impugned order is set aside appeal is allowed. Issues: (i) Whether the product 'Kopiko' manufactured by the appellant is classifiable under Chapter Heading 1704 (sugar confectionery not containing cocoa) or under Chapter Heading 2101 (preparations with a basis of coffee) of the First Schedule to the Central Excise Tariff Act, 1985.Analysis: The Tribunal examined the composition and manufacturing formula of Kopiko showing refined sugar (33.06%) and liquid glucose (41.41%) as the predominant ingredients, water 12.15% and flavouring coffee 1.57%. Applying the General Rules for the Interpretation of the Schedule (GIR), Rule 1 directs classification according to the terms of the headings and Rule 3(a) gives preference to the heading which provides the most specific description. The entry for sugar confectionery not containing cocoa (1704) is a specific description applicable to the product, whereas 2101 describes preparations with a basis of coffee, a more general description. The coffee component is present only as a flavouring agent in a minor proportion and does not constitute the basis of the preparation. The Tribunal also noted persuasive support from prior classifications (including customs/import entries) of the same product under heading 1704 and relevant precedents recognising predominance of sugar/glucose in determining essential character.Conclusion: The product 'Kopiko' is classifiable under Chapter Heading 1704 90 90 (sugar confectionery not containing cocoa) and not under Chapter Heading 2101 12 00. The impugned order is set aside and the appeal is allowed.