Fried snack food classification under Heading 21.08 secured exemption after rejection of Heading 19.04 treatment

Fried snack foods made from flour, starch, meal and similar ingredients, and prepared by frying and seasoning rather than by swelling or roasting cereals, are not covered by Heading 19.04 of the Central Excise Tariff. They fall under Heading 21.08 as edible preparations not elsewhere specified or included. On that classification, the relevant exemption under Notification No. 5/99-C.E. applies, so the duty demand and penalty could not be sustained on the disputed classification.

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Issues: Whether the goods in question, namely cheetos wheels and lehar kurkure, were classifiable under Heading 19.04 of the Central Excise Tariff Act, 1985, or under Heading 21.08, and whether they were entitled to exemption under Notification No. 5/99-C.E.

Analysis: Heading 19.04 covers prepared foods obtained by swelling or roasting of cereals or cereal products and excludes foods not answering that description. On the facts found, the products were made from flour, starch, meal and other ingredients, underwent frying and seasoning, and were not obtained by swelling or roasting. The chapter notes to Chapter 21 show that Heading 21.08 is a residuary heading for edible preparations not elsewhere specified or included, and the products answered that description. The classification adopted by the lower authorities under Heading 19.04 was therefore unsustainable, while the goods fell within Heading 21.08 and the relevant exemption entry.

Conclusion: The goods were not classifiable under Heading 19.04; they were classifiable under Heading 21.08 and eligible for exemption under Notification No. 5/99-C.E., in favour of the assessee.

Final Conclusion: The duty demand and penalty could not be sustained on the disputed classification, and the appeals succeeded with consequential relief.

Ratio Decidendi: Fried snack foods that are not obtained by swelling or roasting of cereals or cereal products do not fall under Heading 19.04 and are classifiable under Heading 21.08 as edible preparations not elsewhere specified or included.

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