2025 (2) TMI 146 - AT - Customs

Mass Weight Gainer supplements classified under protein concentrates CTH 21061000 not general food preparations under Section 28(4)

CESTAT Ahmedabad ruled that Mass Weight Gainer food supplements are correctly classifiable under CTH 21061000 (Protein Concentrates) rather than CTH ... Classification of imported goods - Mass Weight Gainer - classifiable under CTH 21061000 or under CTH 21069099 of the Customs Tariff Act, 1962? - demand of differentail duty - invocation of extended period of limitation as per proviso under Section 28 (4) of the Customs Act, 1962 - HELD THAT:- It can be seen that general Rule of interpretation 3 (a) provides that heading which provides most specific description shall be preferred to the heading providing a more general description. From the literature and photographs as mentioned above, it can be seen that the product is primarily sold in the commercial parlance and know as protein concentrate for weight gain and building muscles and since the customs tariff heading 21061000 have a specific mention of “Protein Concentrates and textured Protein Substance” and the entry under 210690 is generic entry covering the goods which are otherwise not a specifically mentioned under the sub heading 2106. Entry 21061000 covers two element, (1) Protein Concentrate and (2) Textured Protein and the word “Substances” covers both of these elements i.e. Protein Concentrate and Textured Protein. Since the import consignment are made of the protein concentrate along with other substances, it is opined that appropriate classification for the imported consignment will be CTH 21061000 not CTH 21069099 which is primarily for the goods not elsewhere specified and supplementary chapter note (6) provides as what kind of the goods will fall under chapter sub heading 21069099, we are opinion that this sub-headings certainly does not cover the food supplement containing protein concentrate. It can be seen that supplementary chapter note (6) provides that only products such as mithais, namkins, chabanas and such kind of the goods are classifiable under CTH 21069099. This Tribunal’s decision in case of Glambia Performance Nutrition India Pvt Ltd vs. Commissioner of Customs, Mundra [2023 (9) TMI 419 - CESTAT AHMEDABAD] where it was held that 'the impugned goods are rightly classifiable under Heading 2106, sub heading 2106 1000 of the Customs Tariff.' Revenue has relied upon the case of Raptakos Brett & Co Ltd vs Commissioner of C.Ex., Raigad [2014 (12) TMI 33 - CESTAT MUMBAI] where it was held that 'The appellant’s products are consumed as such by people who are recuperating from illness and, therefore, it is a ready to eat packaged product. Consequently, the product merit classification under CETH 2106 90 99 and the appellant is rightly entitled to the benefit of Notification 3/2006, dated 1-3-2006.' - It can be seen from the reading of the above para that this Tribunal has allowed the classification of their product under 21069099 because the appellant in case of M/s. Raptakos could establish that the product manufacture by them was the products consumed under the category of the protein concentrate by the people who are recuperating from illness. It is found that the product under import in the impugned show cause notice are not meant for use by the people suffering from any illness they are primarily used as food supplement and for building muscles, it is therefore differentiated that following of this Tribunal in this case is not relevant to the matter of hand and other two decisions mentioned in the preceding para are not relevant to the imported consignment in this case. Therefore, the argument taken by the Learned AR not acceptable. Thus, import consignment namely Mass Gainer- Food Supplement are nothing but protein concentrates which are use as food supplements for building muscles and since there is specific entry to this effect under Chapter 21061000 and following the General Rules of Interpretation, it is held that correct classification of the product will be under chapter 21061000. Extended period of limitation - HELD THAT:- It can be seen that for invoking the provisions of sub section 4 of Section 28, the department needs to establish that the appellant has short paid the duty on account of collusion, any wilful mis-statement or suppression of facts with an intention to evade duty. The description given by the appellant is the same as mentioned on the product as well as on the import document such as invoice, purchase order and other documents accompanying the Bills of Entry. It is found from the show cause notice that the importer has submitted the literature/ brochure related to mass/ weight gainer- food supplement at the time of the import to the customs authorities. Since all the documents have been available before the customs authority at the time of the assessment, examination of the goods, the allegation of the suppression of the facts or mis-declaration with regard to description of the imported goods as required for invoking the provisions of Section 28(4) of the Customs Act, 1962 have not been established by the department. Conclusion - i) The import consignment namely Mass Gainer- Food Supplement are nothing but protein concentrates which are use as food supplements for building muscles and since there is specific entry to this effect under Chapter 21061000 and following the General Rules of Interpretation, it is held that correct classification of the product will be under chapter 21061000. ii) The extended time proviso under Section 28 (4) of the Customs Act, 1962, cannot be invoked without evidence of collusion, willful misstatement, or suppression of facts. Thus, on merit as well as on the period of limitation the impugned order-in-original is not legally sustainable, therefore, we set aside the same - appeal allowed. ISSUES PRESENTED and CONSIDEREDThe core issues considered in this judgment are:i. Whether the classification of the imported consignments of Mass Gainer-Food Supplement, classified by the appellant under Customs Tariff Heading (CTH) 21061000, is correct, or whether it should be reclassified under CTH 21069099 of the Customs Tariff Act, 1962.ii. Whether the demand for customs duty by invoking the extended time proviso under Section 28 (4) of the Customs Act, 1962, is legally sustainable.ISSUE-WISE DETAILED ANALYSISClassification of Imported ConsignmentsRelevant Legal Framework and Precedents:The classification dispute revolves around whether the imported 'Mass Weight Gainer-Nutrition Supplement' should be classified under CTH 21061000, which covers 'Protein Concentrates and textured Protein Substance,' or under CTH 21069099, which is a more general category for other food preparations not elsewhere specified. The legal framework includes the Customs Tariff Act, 1975, and the General Rules of Interpretation of the Customs Tariff.Court's Interpretation and Reasoning:The Tribunal analyzed the composition of the imported products, which contain varying percentages of protein, carbohydrates, and other nutritional elements. The Tribunal emphasized the application of the General Rules of Interpretation, particularly Rules 2(b) and 3, which guide the classification based on the essential character of the goods and the most specific description available.Key Evidence and Findings:The Tribunal considered the product labels, which indicated that the products are marketed as 'high protein weight gainer powder,' and the literature provided by the appellant, which described the products as protein concentrates used for muscle building.Application of Law to Facts:By applying the General Rules of Interpretation, the Tribunal concluded that the imported products are primarily protein concentrates with additional substances, aligning with the specific description under CTH 21061000. The Tribunal also referenced past decisions, such as the Glambia Performance Nutrition case, which supported the classification under CTH 21061000.Treatment of Competing Arguments:The Department argued for classification under CTH 21069099, citing the products' high carbohydrate content. However, the Tribunal found that the essential character of the products as protein concentrates prevailed, and the specific tariff heading should be preferred over a more general one.Conclusions:The Tribunal concluded that the correct classification for the imported consignments is under CTH 21061000, as the products are primarily protein concentrates used as food supplements for muscle building.Demand for Customs Duty and Extended Time ProvisoRelevant Legal Framework and Precedents:The demand for customs duty was based on the extended time proviso under Section 28 (4) of the Customs Act, 1962, which allows for a five-year period for duty recovery in cases of collusion, willful misstatement, or suppression of facts.Court's Interpretation and Reasoning:The Tribunal examined whether the conditions for invoking the extended time proviso were met, focusing on whether there was any collusion, willful misstatement, or suppression of facts by the appellant.Key Evidence and Findings:The Tribunal found no evidence of misdeclaration or suppression of facts. The appellant had provided all necessary documentation, including product descriptions and literature, at the time of importation. The classification under CTH 21061000 was initially accepted by the customs authorities.Application of Law to Facts:The Tribunal determined that the extended time proviso could not be invoked, as there was no evidence of intent to evade duty, collusion, or suppression of facts. The demand for customs duty was therefore barred by the period of limitation.Treatment of Competing Arguments:The Department's argument for invoking the extended time proviso was rejected due to the lack of evidence supporting collusion or willful misstatement.Conclusions:The Tribunal held that the demand for customs duty was not sustainable due to the period of limitation, as the conditions for invoking the extended time proviso were not met.SIGNIFICANT HOLDINGSThe Tribunal established the following core principles and final determinations:- The classification of 'Mass Weight Gainer-Nutrition Supplement' under CTH 21061000 is appropriate, as the products are primarily protein concentrates.- The extended time proviso under Section 28 (4) of the Customs Act, 1962, cannot be invoked without evidence of collusion, willful misstatement, or suppression of facts.- The demand for customs duty is barred by the period of limitation, as the necessary conditions for extending the time period were not met.In conclusion, the Tribunal set aside the impugned order-in-original, allowing the appeal in favor of the appellant.