TaxTMI 
TaxTMI 
1986 (9) TMI 253
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....ariff Schedule) and that they did not constitute food products or food preparations eligible for exemption from duty under Central Excise notification Nos. 55/75, dated 1-3-1975. Accordingly, he imposed on the appellants under Central Excise Rule 173Q (1), a penalty of Rs.70,000. He also ordered that the appellants should pay duty at the applicable rates on the goods manufactured and cleared by the appellants without payment of duty during the period from 18-6-1977 to 5-10-1978. The appeal preferred against this order before the Central Board of Excise & Customs (CBEC) has been received, on transfer, in this Tribunal for disposal as an appeal and has been numbered 787/80-D. 2. Similarly appeals Nos. 411/81 and 412/81-originally file....
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....products and food preparations" in entry No. 1 in the Schedule to notification No. 55/75, dated 1-3-1975. It states that "preparations used because of their nutritional or flavouring properties in the making of beverages or foodstuffs for human consumption are classifiable as food preparations. But such preparations which because of their ingredients and small proportions in which they are normally used, are clearly added for other purposes, are not classifiable as food preparations". Thus, non alcoholic beverage bases, it was argued, were covered by the scope of the notification as explained by the trade notice. Further support was sought to be derived from two orders passed by the Appellate Collectors at Madras and Bombay. By order No. 57....
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....-E.L.T.65, by which the Court held that coffee-chicory powder could not be classified as "food product or food preparation". The Appellate Collector has, in addition, relied on the explanatory notes in the CCCN (Customs Cooperation Council Nomenclature) which classified food flavourers, flavouring agents and essential oils under the heading of "Essential Oils ...." and not under food preparations or food products. 7. Taking the CCCN first, it may be noted that heading No. 21.07 covers "food preparations, not elsewhere specified or included". The explanatory notes thereunder make it clear that the heading includes inter alia flavouring powders for making beverages, whether or not sweetened, with a basis of bicarbonates of soda and gl....
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....n the Central Excise provisions a different meaning. 8. We do, however, agree with the lower authorities that the definitions in the Prevention of Food Adulteration Act are of no avail in the present context because the object of that Act is different : to lay down stringent controls over all articles which go into the making of or preparation of any item of food or drink so as to protect the health of human beings. 9. The view that the subject non-alcoholic beverage bases or concentrates are covered by the expression "food products and food preparations" is also supported by the import policy of the Government of India for the period April 1981 to March 1982, which lists, in Appendix 17, "Non-alcoholic beverage bases" under....
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....e divided into nine classes and one of the classes mentioned is beverages. There is a Section on beverages wherein it is stated that although most adults drink one to two litres of water a day, much of this is in the form of coffee, tea, fruit juices, "soft drinks", beer, wines or spirits, or other liquids. In general, these are appreciated more for their taste and the substances they contain, or for their effects, than for their nutritive value. 12. It may be seen that the above authoritative work of reference classifies beverages including soft drinks under the category of foods. If this be so, there seems to be no good reason why non-alcoholic beverage essences should not also be classified as food products or food preparations i....