Residuary tariff classification for tonic food supplements confirmed where the product was not prepared or preserved food and exemption failed.

A tonic or food supplement made by mixing chemical ingredients in specified proportions was treated as a synthetic preparation and not as "prepared or preserved food" in the ordinary sense. On that basis, it fell under the residuary Tariff Item 68 rather than Tariff Item 1B. Exemption under Notification No. 17/70 was unavailable because it depended on the goods first answering the description of prepared or preserved food. Exemption under Notification No. 234/82 also failed because the product was not the kind of food product or food preparation covered by that schedule. The departmental appeal therefore succeeded and the exemption claim was rejected.

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Issues: (i) Whether the product, being a tonic or food supplement, was classifiable as "prepared or preserved food" under Tariff Item 1B or was correctly classifiable under Tariff Item 68; (ii) whether the product was entitled to exemption under Notification No. 17/70 or Notification No. 234/82.

Issue (i): Whether the product, being a tonic or food supplement, was classifiable as "prepared or preserved food" under Tariff Item 1B or was correctly classifiable under Tariff Item 68.

Analysis: The product was found to be a tonic normally taken as a food supplement and not a preparation ordinarily understood as prepared or preserved food. On the old tariff, the relevant enquiry was whether the product answered the description of prepared or preserved food in the ordinary sense. The product was a synthetic preparation made by mixing chemical ingredients in specified proportions and did not fit that description. In the absence of any other suitable heading, it fell within the residuary entry.

Conclusion: The product was correctly classifiable under Tariff Item 68 and not under Tariff Item 1B.

Issue (ii): Whether the product was entitled to exemption under Notification No. 17/70 or Notification No. 234/82.

Analysis: Exemption under Notification No. 17/70 was available only if the goods were first shown to be prepared or preserved food, which requirement was not satisfied. As regards Notification No. 234/82, the product was an edible preparation used as a food supplement, but it was not a food product or food preparation of the kind covered by the schedule to that notification. The claimed exemption therefore failed on the nature of the product and its classification.

Conclusion: The product was not entitled to exemption under either Notification No. 17/70 or Notification No. 234/82.

Final Conclusion: The departmental appeal succeeded, the classification under Tariff Item 68 was restored, and the exemption claimed by the assessee was denied.

Ratio Decidendi: A tonic or food supplement which is not ordinarily understood as prepared or preserved food, and which is not covered by the specific exemption entry, falls under the residuary tariff item and does not qualify for the claimed exemption.

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