Show cause notice limits tariff classification: milk-based dessert mixes fell under Heading 04.04, not a fresh duty basis.

A duty demand based only on Chapter Heading 21.08 could not be sustained on a different classification under Chapter Heading 19.01 without a fresh show cause notice; recovery on a tariff basis not proposed in the notice was impermissible. The dessert mixes were classifiable under Chapter Heading 04.04 because they consisted predominantly of natural milk constituents with only limited additives, and Heading 19.01 applied only to preparations not elsewhere specified or included. The products' need for further preparation did not take them outside Heading 04.04. The appellate classification was therefore unsustainable and no differential duty was recoverable on the notice as issued.

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Issues: (i) Whether differential duty could be sustained on a classification basis different from that proposed in the show cause notice; (ii) whether the dessert mixes were correctly classifiable under Chapter Heading 04.04 and not under Chapter Heading 19.01 or 21.08.

Issue (i): Whether differential duty could be sustained on a classification basis different from that proposed in the show cause notice.

Analysis: The show cause notice demanded duty only on the footing that the goods fell under Chapter Heading 21.08. Once the appellate authority found that Chapter 21 was not attracted, the demand founded on that notice could not be sustained on a fresh classification under Chapter Heading 19.01 without a separate notice. Recovery of duty on a tariff heading not proposed in the notice was impermissible.

Conclusion: The demand could not be reworked on the basis of Chapter Heading 19.01, and no duty was recoverable on the notice as issued.

Issue (ii): Whether the dessert mixes were correctly classifiable under Chapter Heading 04.04 and not under Chapter Heading 19.01 or 21.08.

Analysis: Classification had to be resolved with reference to the HSN, which supports Heading 04.04 for products consisting of natural milk constituents even with added sugar, flavouring matter, small quantities of starch, fruit, nuts, or similar additives. The products were predominantly dairy powder with limited additives, and the ingredients did not take them outside Heading 04.04. Heading 19.01 applied only to food preparations not elsewhere specified or included, and that condition was not met. The products were also edible with or without further cooking, so the absence of instant consumption did not exclude them from Heading 04.04.

Conclusion: The dessert mixes were classifiable under Chapter Heading 04.04 and not under Chapter Heading 19.01 or 21.08.

Final Conclusion: The classification adopted by the appellate authority was unsustainable, and the assessee was not liable to the demanded differential duty.

Ratio Decidendi: A duty demand cannot be sustained on a tariff classification different from that specifically proposed in the show cause notice, and milk-based preparations consisting of natural milk constituents remain classifiable under Heading 04.04 despite limited permissible additives.

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