TaxTMI 
TaxTMI 
TaxTMI 
2009 (2) TMI 693
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....ember, 2005) were issued to them, proposing to classify the said product (Tea Time Puff) under CETH 1905.11 (1st SCN) and 1905.90.20 (2nd SCN), and demanding the resultant duty alleged to have been evaded. Interest and penalty provisions were also invoked. 2. Both the SCNs were decided by the Assistant Commissioner of Central Excise (ACCE), Tollygunj Division vide his Order-in-Original No. AC/Tolly/ Kol-V/No. 3/2007 dated 30-3-2007. His discussions and findings in the said order are as under : The allegation is mainly based on statement dated 31-3-2005 of Sri Sikharesh Saha, Manager Operations under Section 14 of Central Excise Act, 1944. Being the key person in operations, his statement holds great significance in the matter of production. In that statement dated 31-3-2005 while replying to a specific question on the manufacturing process of "Tea Time Puff" and the raw material used in such production, he narrated that :- "Basic raw materials - Flour, Margarine, Water, Salt & Sugar. The dough is first made putting flour, water and salt. Then that was chilled. After 45 minutes rest the same laminated with margarine using sheeter machine. Then cutted as per size and baked in 240 ....
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....tion), though in both the SCNs, the first formal proposal/charge was to classify the product under CETH 1905.12 (1st SCN)/1905.90.20 (2nd SCN). 5. Being aggrieved, the said assessee preferred an appeal (along with Stay Petition) on 9-7-2007 on the following grounds of appeal. I. The dispute is with regard to classification of tea time puff, which according to the appellants cannot be categorized as "biscuits". The item has got a number of layers baked and joined together. It is actually an indigenous product, which has a long history and is locally known as "khari" or "khasta" and is available and produced all over the country. It is an original native Indian product and is consumed widely by the poor and middle class as a substitute to biscuits. The production process and ingredients used in the manufacture of "Tea Time Puff" is exactly similar to that used in the manufacture of patties, except for the filling used in patties as stated above. It has got nexus with patties but not with biscuits. Hence, they are correctly classifiable as patties and not biscuits. II. The Ld. AC failed to appreciate that the process of manufacture of tea time puff is by joining the patties puff la....
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....ents of flour, water, salt, margarine, lemon juice etc. The dough is made, cooled and the baking is done twice for 15 minutes duration and at the temperature of 230° C (degree centigrade) as mentioned in the book "Modern Cookery" (Vol-2, 3rd Edition written by Thungam E. Phillip) widely followed by the trade. Part-Ill: The Appellant has shown the 'Tea Time Puff' as "Other Bakers' Ware" under S.H. No. 1905.90.90, knowingly to evade the duty of excise while there is scope of showing the same as there is no separate Sub Heading of "Other Bakers' Ware" Biscuit is also bakers' ware. So, proper classification shall be under the head of 'biscuit'. The appellant themselves in their ground of Appeal mentioned that "Tea Time Puff" is nothing but Khari or Khasta. In the market parlance also, Khari and Khasta are termed and consumed as 'biscuit'. Mere giving a sophisticated name viz. 'tea time puff' can in no way be termed as patties. 8. Next hearing was held on 12-12-2007 before my predecessor. Shri N.N. Ghosh Supdt. and Shri B. Hembram Inspector appeared for the Department and stated that the process of manufacture of biscuits and the tea time puff is more or less the same. The process....
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....for biscuits and cookies, except that biscuits/cookies have more calorific value (more butter/dry fruit e.g. raisin etc.). Samples of biscuits and cookies were submitted. The appellants also said that though they were initially calling it "Puff" but later on they have checked up the practice in other parts of the country and have accordingly renamed it as "Khari" which is in common use. They gave a printout. They also submitted copies of some invoices from other Commissionerates where similar goods are being classified under Heading 190590 at NIL rate. Both sides agreed that the impugned product is similar to patties in that both are layered and ingredients are similar, except that the major dissimilarity is that there is no filling. The deptt. officers gave written submissions including extract from the "Modern Cookery" book and said the production process of "Khara Biscuits" as given at Sl. No. 139 therein is similar to impugned goods and hence they should be classified as biscuits. They were asked to give one copy to the party for their comments. They were also asked to give the clearance documents. 12. The aforesaid written submissions given by the Department on the date of he....
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....ough is made, cooled and baking is done for 15 minutes at the temperature of 230-240 degree centigrade. The process of cooling and baking is repeated in both the cases. When process of manufacture of the impugned product is similar to that of biscuits, it is nothing but a kind of biscuit irrespective of it being made of layered puff and as such, it is classifiable against the heading Biscuit under earlier Sub heading 1905.11 and under New Sub-heading as 1905.90.20. 13. The relevant extract from the book "Modern Cookery" by Thangam Philip, as produced by the Department, is as under :- 14. The printout of "khari" given by the appellants during the said PH is as under : 15. In addition, they had given some invoices on perusal of which it is seen that vide invoice no. 25203 dated 1-8-2008 and 25148 dated 1-8-2008 (read with the annexures thereto) M/s. Monginis Foods Mumbai have cleared goods described as "Khari" under the category of "Other bakery" which has been classified u/h 1905.90.90 and no excise duty has been paid on the same. 16. As mentioned above, a copy of the department's written submissions filed during the PH had been given to the appellants. The appellants vide ....
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....n indigenous Bakery Product unlike Biscuit or Cookies, which is of foreign origin. • Under Trade Usage, Khari is distinctly identified as a separate category from Biscuits. • Khari tastes distinctly different from Biscuits and has a totally different mouth feel. • Customers and general public identify Khari as a distinct product category. • Traditionally and by trade usage, Khari has been identified as an extension of Puff or Bread (like bread sticks) used by common or low-income group people as a snack. • Khari has never been identified as a biscuit although the consumption pattern of biscuit is same like Khari. • It is largely manufactured by cottage and micro industry in the unorganised sector. • The raw materials used for the manufacture of Khari are like any other Bakery product with Wheat Flour and Shortening (Vegetable Fat) being the major ingredients. • The manufacturing process is different compared to Biscuits inasmuch as Khari is a puff product without any filling while biscuits or cookies are either moulded, deposited or wire cut and also contains value addition (dry fruits, chocolate, butter fat, nuts etc.) • Biscui....
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....rature less than or equal to 5 degrees for 30 minutes. Dough is not covered with wet cloth. Instead kept in Cooler after lamination. 4. Roll the dough as thin as possible into a rectangular shape. Dough is sheeted again and folded and again kept in Cooler for another 30 minutes. Dough is not rolled thin but sheeted again and kept in Cooler. 5. Cream and fat is evenly spread over the dough. Dough is sheeted to final thickness and cut into rectangular sizes. Cream and fats are not applied at this stage of processing. 6. Cut into 3 pieces lengthwise. The centre piece should be broader than the side pieces. Not done. This process is not followed in Switz 7. Pull and roll the side pieces into a pencil shape, rolling one inside the other. Not done. This process is not followed in Switz 8. Place on the centre portion and roll again Not done This process is not followed in Switz 9. Keep covered under wet cloth for at least 40-50 minutes. Not done. This process is not followed in Switz 10. Roll and cut into desired shape and place biscuits on a watered tray. Rectangular pieces are placed on baking sheets and transferred to oven. Watered trays are not used. 11. ....
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....re contending for 1905.90 as "other bakers' ware" and the department wants to classify under 1905.11 as "biscuits". 19.2 On adoption of the 8-digit tariff w.e.f. 28-2-2005, the said heading became as under (which is relevant to a part of the period covered by the first SCN; and the entire period covered by the second which was from April, 2005 to December, 2005) : Tariff Item Description of goods Unit Rate of duty (1) (2) (3) (4) 1905 Bread, pastry, cakes, biscuits and other bakers, wares, whether or not containing cocoa, communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products 1905 10 00 - Crispbread...................................................... kg. Nil 1905 20 00 - Gingerbread and the like............................... kg. Nil - Sweet biscuits; waffles and wafers : 1905 31 00 -- Sweet biscuits................................................ kg. 8% 1905 32 -- Waffles and wafers: --- Communion wafers: 1905 32 11 ---- Coated with chocolate or containing chocolate kg. 16% 1905 32 19 ---- Other.............................................................. kg. 8% 1905....
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.... makes clear, the correct understanding of the tariff (and this is regardless of where the impugned product may go) is as has rightly been explained by the party at portion marked (A) on page 8 of this order). 20.3 I may elaborate on this. 20.4 The main Chapter Heading 19.05 reads as "Bread, pastry, cakes, biscuits and other bakers wares, whether or not containing cocoa, communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products." (emphasis mine). Under this main heading, there are 4 sub-headings at the single dash (" - ") level. Two of these four single dash level headings are also tariff entries, inasmuch as they carry a rate of duty against them. These are 1905.20 (cakes and pastries) and 1905.90 (other). However, the remaining two single dash entries namely biscuits and waffles and wafers do not have any tariff rate indicated against them (nor any sub-heading number assigned to them) because they have, further sub-headings at the double dash level (" - - ") i.e. 1905.11/1905.19 and 1905.31/1905.39 which in turn are tariff entries. This could be diagrammatically represented as under : Entry at single dash level ....
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....he main Heading 19.05, some products have specifically been covered in the first three single dash covered entries. These are biscuits, cakes and pastry, and waffles and wafers. (For two of these namely biscuits and waffles and wafers, two further sub-headings at the double dash level have been given in each case; and for the third i.e. cakes and pastry there is no double dash level sub-heading as the single dash level entry is itself a tariff item). Therefore, all such products which are mentioned in/covered by the main Heading 19.05 but are not covered by these three specific single dash level entries (read with their sub-entries) will obviously fall under the residual item 1905.90 which is "other". This "other" in 1905.90 is a single dash entry which the learned adjudicating authority appears to have misconstrued as being a part of waffles and wafers (when he says that "And sub-heading 1905.90 is for waffles and wafers"). NO. That finding is clearly incorrect. The sub-heading 1905.90 is NOT for waffles and wafers. The entry "Other" which is a part of waffles and wafers is 1905.39 and not 1905.90. Therefore, I am afraid that I must hold that the learned adjudicator's finding that....
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....oduct commonly known as "patties" inasmuch as it is a layered puff product, whereas "biscuit" is a product usually made by using moulds/wires etc. They are calling their product as a "puff", or a "khari". Thus, there are four terms/words falling for consideration in this case i.e. biscuits, patties, puff and khari. Only one of these three terms i.e. biscuits has actually been used in the tariff and even for that term, there is no definition given in the tariff as to what exactly is meant by the term "biscuits". Thus, the whole issue boils down to considering as to what is meant by the term "biscuits" in the Central Excise Tariff, in the context of the fact that there is no definition given for the said term. 23. I find that the Hon'ble Supreme Court has laid down the following ratios to deal with situations where a particular term has not been defined in the statute. In Plasmac Machine Manufacturing Co. Pvt. Ltd. v. Collector of Central Excise, Bombay [1991 (51) E.L.T. 161 (S.C.)], it was held by the Hon'ble Supreme Court as under (emphasis respectfully added by me): "It is an accepted principle of classification that the goods should be classified according to their popular mean....
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....l never understand you to mean the 'Hotline Projector Vision 203 etc.' 8. We agree with the contention of the learned counsel for the respondent that the Projector Vision - Projection television sets are capable of receiving television broadcasts as is being done by any other broadcast television receiver set but at the same time the two are not the same. An ordinary television set has a fixed image in the mind of the consumer in this country. One never visualises a television set having a projection-unit and a head-screen mounted at a long distance. A television set - in the imagination of the consumer - is a compact set with inbuilt screen which adores the drawing room and bed room. A television set in the market costs about Rs. 15,000/- to Rs. 25,000/- whereas the respondents' product costs between Rs. 1,20,000/- to Rs. 1,50,000/-. We, therefore, agree with the view taken by the Assistant Collector and the Collector. 24. So, the question is, how is the term "biscuit" understood in the popular or commercial sense? What is the mental picture that it evokes? 25. At this point, it would be useful to reproduce the images of the samples shown by the appellants during the hearing be....
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....cturing process of tea time puff is same as that of biscuits and the details in this regard are given at pages 9 and 10 [pages 826, 827] of this order. 31. In so far as process is concerned, on careful consideration of the material placed before me, I find that there are indeed several differences in the manufacturing process of their product as against the product referred to in the technical book "Modern Cookery" as khara biscuits. In fact, the main difference is the layering, which is conspicuous in the impugned product. 32. At any rate, I find that the department was allowed (indeed, requested) to organise for documentation of the exact manufacturing processes of biscuits on the one hand and of the impugned product on the other, in the presence of an expert, but that matter could not reach any conclusion. 33. However, I am not able to see, in the peculiar facts of this case, the relevance of the similarity or otherwise of the ingredients. In my opinion the rival tariff entries do not warrant any such ingredient-based logic. We need to classify the product in terms of the entries in the tariff as they are, and there is no implied authority given therein to take the ingredient....