Revenue appeal dismissed on liquid glucose classification under Central Excise Tariff Act

COLLECTOR OF C. EX., CHANDIGARH Versus SUKHJIT STARCH & CHEMICALS LTD.

COLLECTOR OF C. EX., CHANDIGARH Versus SUKHJIT STARCH & CHEMICALS LTD. - 1994 (72) E.L.T. 753 (Tribunal) Issues Involved:

1. Classification of liquid glucose and malto dextrin under the Central Excise Tariff Act, 1985.
2. Interpretation of sub-headings 1702.19 and 1702.29.
3. Relevance of the Chemical Examiner's report.
4. Applicability of HSN Explanatory Notes.
5. Binding nature of the Board's Circular.

Detailed Analysis:

1. Classification of Liquid Glucose and Malto Dextrin:

The primary issue is whether liquid glucose and malto dextrin should be classified under sub-heading 1702.19 or 1702.29 of the Central Excise Tariff Act, 1985. The respondents claimed classification under sub-heading 1702.29, arguing that their products are preparations of other sugars with reducing sugar content less than 80%. The revenue contended classification under sub-heading 1702.19, which includes other sugars such as chemically pure lactose, maltose, glucose, and fructose.

2. Interpretation of Sub-headings 1702.19 and 1702.29:

Sub-heading 1702.19 pertains to "other sugars, including chemically pure lactose, maltose, glucose, and fructose in any form," while sub-heading 1702.29 covers "preparations of other sugars" with reducing sugar content less than 80%. The Assistant Collector and Collector (Appeals) concluded that the products should be classified under sub-heading 1702.29 as they are not 100% chemically pure glucose but preparations containing less than 80% anhydrous dextrose.

3. Relevance of the Chemical Examiner's Report:

The Chemical Examiner's report indicated that the samples of liquid glucose and malto dextrin satisfied the Indian Standard Specification No. 873-1974 for liquid glucose and were other than preparations. The reducing sugar content was 38.8% for liquid glucose and 28.5% for malto dextrin. Despite this, the Assistant Collector and Collector (Appeals) found that the products should be classified under sub-heading 1702.29 based on their composition and use in the confectionary, biscuits, and food canning industries.

4. Applicability of HSN Explanatory Notes:

The revenue argued that the HSN Explanatory Notes support classification under sub-heading 1702.19. However, the Tribunal noted that the HSN Heading 17.02 and CETA Heading 17.02 are not fully aligned. The Tribunal emphasized that HSN Explanatory Notes are useful only if the headings are materially aligned. Since CETA includes "preparations of other sugars," which HSN does not, the Tribunal found HSN Notes irrelevant for this classification issue.

5. Binding Nature of the Board's Circular:

The revenue referred to the Board's Circular No. 1/93-C.E., dated 11-3-1993, which classified liquid glucose under sub-heading 1702.19. However, the Tribunal noted that the Board's circular is not binding on quasi-judicial authorities. The Tribunal relied on the Supreme Court judgments stating that such circulars are not binding in classification matters.

Majority Opinion:

The majority of the Tribunal members agreed with the findings of the lower authorities, concluding that liquid glucose and malto dextrin should be classified under sub-heading 1702.29. They reasoned that the products are preparations of other sugars with reducing sugar content less than 80%, as evidenced by the Chemical Examiner's report and the Indian Standard Specification.

Dissenting Opinion:

One member dissented, arguing that the products should be classified under sub-heading 1702.19 as other sugars. He emphasized the Chemical Examiner's finding that the products were other than preparations and relied on the HSN Explanatory Notes, which categorize such products as other sugars.

Final Judgment:

In view of the majority opinion, the appeal by the revenue was dismissed, and the classification of liquid glucose and malto dextrin under sub-heading 1702.29 was upheld.