TaxTMI 
TaxTMI 
2011 (5) TMI 534
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....ct, 1985 and was exempted from payment of duty. 2. As a result of visit of the officers in the appellant s factory made on 22.11.2002, it was noticed that there was a contract dated 28.09.2002 between M/s. Waves Foods Pvt. Limited and M/s. Sabar Foods, wherein all the machineries as also the raw materials were to be supplied by M/s. Waves Foods Pvt. Limited to M/s. Sabar Foods for the manufacture of the product in question. The raw material supplied by M/s. Waves Foods Pvt. Limited was mother mix, malic acid, citric acid, sugar, glucose, vitamin C and vitamin pre-mix. On being questioned, M/s. Waves Foods Pvt. Limited did not disclose the manufacturing process of mother mix, the same being a trade secret. Representative samples were drawn for determination of composition of the said product. The said samples were sent to the chemical examiner, who vide his report dated 20.05.2003 reported that though the said product contain a quantity of fruit powder, the same was not predominant. He further opined that according to Prevention of Food and Adulteration Act, the definition of fruit drinks prescribes the minimum percentage of fruit juice in the final product should not be les....
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....red to be imposed or not. 5. Taking up the first issue for decision, we find that two contending entries i.e. one claimed by the appellants and other by the Revenue are as under :- Heading No. Sub-Heading No. Description of goods Rate of duty (1) (2) (3) (4) 20.01 2001.10 Preparation of vegetables, fruit, nuts or other parts of plants including jams, fruit jellies, marmalades, fruit or nut puree and fruit or nut pastes, fruit juices and vegetable juices, whether or not containing added sugar or other sweetening matter Put up in unit containers and bearing a brand name 16% 21.08 2108.10 Edible preparations, not elsewhere specified or included Preparations for Lemonades or other Beverages intended for use in the manufacture of Aerated Water 16% 2108.20 Sharbat 16% 2108.30 Prasad or Prasadam Nil 2108.40 Sterilised or Pasteurised Miltone Nil Other: 2108.91 Not bearing a brand name Nil 2108.99 Other 16% As is seen from the above heading 20.01 cove....
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....he term fruit squash as follows: A.16.04 fruit squash means the expressed juice of the sound rip fruit with pulp containing sugar, dextrose, invert sugar or liquid sugar either singly or in combination and with or without . Reference of the term fruit drink has also been made which has been defined in Heading A.16.05, which reads as follow: A. 16.05 fruit beverage or fruit drink means any beverage or drink which is purported to be prepared from fruit juice and water, or carbonated water, and containing sugar, dextrose, invert sugar or liquid glucose either singly or in combination and with or without (a) water, peel oil, fruit essences and flavours; (b) citric acid, ascorbic acid; (c) permitted preservative and colours The total soluble solids w/w in the final product shall be not less than 10 per cent. The minimum percentage of fruit juice in the final product shall not less than 5.0 per cent w/w. 8. As is seen from the above Para A.61.01 defines the fruit juice which going by the dictionary meaning and the common parlance test conveyed that the same is liquid extract from fruit juice. The appellants have not claimed ....
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....e Assistant Commissioner that it stands established from the above report that the chemical examiner had not determined the exact contents of the fruit powder. They further contended that the opinion of the chemical examiner that the product is classifiable under Chapter heading 21.08, cannot be relied upon as it is not the function of the chemical examiner to opine about the classification of the product and relied upon the various decisions of the Tribunal. We agree with the above aspect of the issue that it was not within the purview of his function to opine about the classification of the product and as such no reliance can be placed upon his opinion about classification of the product, which has to be arrived at based upon the composition, Chapter notes, description and various precedent decisions. 12. In addition, the appellants placed on record the following evidences, during the course of adjudication, before the Commissioner :- (a) A certificate dated 29.03.2003 from the ministry of Agriculture, Government of India, was placed on record wherein it has been categorically stated that the dry fruit content is equivalent to that found in a fruit squash. The pro....
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....r is not a pre-dominant component of drink mix and at such a low percentage, the presence of fruit powder in the drink mix could at best be seen as a flavouring agent. He has also gone to the relevant explanatory notes of HSN and by referring to the notes of heading 2109, he has observed that in the light of the said notes, the product cannot be held to be fruit juice. However, we find that HSN heading 2109 relates to fruit juices and not preparations of fruit juices. As such, any reference to the said heading in the HSN and the relevant notes there, would not be of any help. 14. While deciding the classification it has to be kept in mind that Chapter 21 deals with the edible preparations, not elsewhere specified or included. As such, if the product is otherwise covered by the description 20.01, the same would not fall under the heading 21.08, inasmuch as the same is a residuary entry. Chapter heading 20.01 covers the preparation of various products including preparation of fruit juices. As such, any preparation of fruit juice would fall under the said heading. The Assistant Commissioner has observed in Para 56.2 of his order and in fact, there is no dispute that th....
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....emand, as not sustainable. In the case of Godrej Foods Limited vs. CCE, Indore 2006 (202) ELT 473 (Tri. Del.), an identical product known as Lipton Tree Top, the Tribunal observed that Chapter heading No. 20.01 covers a broad range of mechanicals irrespective of the fact that sugar or other sweetening matter is added or not. In Para 17, 18 and 19 of their judgment, it was observed and held as under:- 17. The construct of Chapter 22.02, in our opinion, is oriented towards such beverages which are other than fruit juice beverages. We are unable to find a distinction between fruit juice and the fruit juice beverages as no such distinction has been spelt out in both these Headings. There is no criterion available in the Tariff to distinguish the products on the basis of their concentration. Thus, a diluted fruit juice never cease to be a fruit juice beverage and would, for all practical purposes, continue to remain as preparation of fruit. 18. While arriving at this conclusion, we gain support from? this Tribunal s decision in Northland Indus. v. CCE (supra) in which it was held that squash and cordials which are preparation of fruit juice are correctly classifi....
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....it juices and concentrated fruit juices with added ingredients. The Assistant Collector has observed in his order that it is evident that all beverages are covered herein whether consisting of concentrated fruit juice or syrup flavoured with fruit juices. It seems to us, however, that what is covered are preparations for beverages and not beverages themselves, preparations of fruit juices are, in terms, covered by Heading No. 20.01. The Assistant Collector has construed the heading to mean that only fruit juices have been included herein, not preparations of fruit juices. He has come to this conclusion on the basis that the preparations of fruit included in the heading are only jams, fruit, jellies, marmalades, fruit or nut puree. The word preparations at the commencement of the entry does not qualify the phrase fruit juices . In other words preparations of fruit juices are not included. Since squash is a beverage and can be consumed after simple dilution with water, squashes and cordials are covered more specifically by the term beverages. As noted earlier, we are of the view that, in the light of Note 5(j) to Chapter 21, Heading No. 21.07 covers preparations for beverages and not....
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....n. Accordingly, it was held that since Chapter heading 21.08 covers edible preparation not elsewhere specified and as such it is residuary entry, the goods stands correctly classifiable under Chapter 20 being a mixture of different vegetations. 18. We find that the ratio of all the above decisions is squarely applicable and in the light of the same as also in the light of discussions in foregoing paragraphs, we hold that the product is rightly classifiable under Chapter heading 2001.10. We accordingly, uphold the appellant s claim of classification. 19. Though, the other grounds raised in the appeal remains only of academic interest, having already held in favour of the appellant on the point of classification, nevertheless, we proceed to deal with the same. 20. M/s. Waves Foods Pvt. Limited have contended before the authorities that they are not the manufacturer of the product in question, inasmuch as they have already entered into an agreement with M/s. Sabar Foods to manufacture the goods. Merely because they have supplied the raw material and machinery to M/s. Sabar Foods, will not make them the manufacturer when the goods are admittedly being manufactur....
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....for. 21. The demand also stand assailed by the appellants on the invocation of longer period of limitation. The extended period stands invoked by the lower authorities on the ground that appellant has neither filed any declaration with Central Excise department and nor obtained any Central Excise registration, and as such suppressed the facts with malafide intention. On the other hand, it is the appellants contention that their factory was situated in rural area and in the light of various Tribunal decisions, they were always under the bonafide impression that there product is classifiable under Chapter 20 and no duty is required to be paid by them. The dispute being bonafide relating to classification of the product, no malafide can be attributed in the absence of any evidence to that effect. We agree with the appellants on the above count. Non filing of declarations by the appellants was for the reasons that as the aggregate clearances value by M/s. Sabar Foods was below the small scale exemption limits, and as such no declarations was required to be filed. Further in the light of various decisions of Tribunal, referred supra, holding identical products to be falling unde....