Classification and exemption rules: ready-to-serve beverage falls under beverages, while chocolate is not automatically cocoa powder for notification purposes.

A classification change for Softy (Plain) Mix could not be sustained without a show-cause notice covering that specific product, so remand for fresh adjudication was maintained. Softy (Choco) Mix remained eligible for Notification No. 9/90-C.E. because the notification excluded cocoa powder, and chocolate was treated as a distinct product not automatically covered by that exclusion. Softy (Shake) Mix was held to be a ready-to-serve beverage classifiable under Heading 2202.90 rather than Heading 1901.90 for milk preparations, and it therefore fell outside the notification benefit applicable to Chapter XIX goods.

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Issues: (i) Whether the classification of Softy (Plain) Mix could be remanded when no show-cause notice had been issued on that product; (ii) whether Softy (Choco) Mix was entitled to the benefit of Notification No. 9/90-C.E. despite containing chocolate; and (iii) whether Softy (Shake) Mix was classifiable under Heading 1901.90 or Heading 2202.90 and whether it could claim the notification benefit.

Issue (i): Whether the classification of Softy (Plain) Mix could be remanded when no show-cause notice had been issued on that product.

Analysis: A change in classification cannot be sustained without notice to the assessee on the specific product. Since the product Softy (Plain) Mix was not covered by the show-cause notice, the lower appellate authority correctly declined to decide it finally and sent it back for fresh adjudication.

Conclusion: The remand of Softy (Plain) Mix was upheld.

Issue (ii): Whether Softy (Choco) Mix was entitled to the benefit of Notification No. 9/90-C.E. despite containing chocolate.

Analysis: The exclusion in the notification was for cocoa powder, and chocolate was treated as a distinct product, even if cocoa powder may be one of its ingredients. Chocolate powder was not equated with cocoa powder for the purpose of denying exemption.

Conclusion: The benefit of Notification No. 9/90-C.E. was available to Softy (Choco) Mix.

Issue (iii): Whether Softy (Shake) Mix was classifiable under Heading 1901.90 or Heading 2202.90 and whether it could claim the notification benefit.

Analysis: The product was found to be a ready-to-serve beverage containing substantial milk content. Preparations of milk under Heading 1901.90 cover milk preparations that require mixing or preparation before service, whereas ready-to-serve beverages fall within Heading 2202.90. Since the product was classifiable under Heading 2202.90, it fell outside the scope of the notification meant for Chapter XIX goods.

Conclusion: Softy (Shake) Mix was classifiable under Heading 2202.90 and was not entitled to the benefit of Notification No. 9/90-C.E.

Final Conclusion: The appeal succeeded only in relation to Softy (Shake) Mix, while the remand concerning Softy (Plain) Mix and the exemption for Softy (Choco) Mix were maintained.

Ratio Decidendi: A product described as a ready-to-serve beverage is classifiable under the tariff heading for beverages rather than under the heading for milk preparations, and a notification excluding cocoa powder does not automatically exclude chocolate unless the notification so provides.

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