2015 (1) TMI 939

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....ants were manufacturing infant foods like 'Lactodoex, Lactodex Starter, Lactodex Follow-up, etc. under Central Excise Tariff Act, 1985 and clearing the same at nil rate of duty. In such manufacturing, they were also making intermediate products like Vitamin Premixes and Mineral Premixes which were captively consumed. Duty was demanded on Vitamin Premix under Central Excise Tariff Heading 2936 and on Mineral Premix under Chapter Heading 2851.90 denying the benefit of captive consumption Notification No. 67/95-C.E., dated 16-3-1995, on the ground that the final products were exempted from payment of Central Excise duty. The Commissioner (Appeals) agreed with the appellant's contention that the said products are classifiable under chapter head....

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.... 2851.21 -- Used within the factory of production Nil 2851.29 -- Other 16% 2851.30 -- Compressed air Nil 2851.90 -- Other 16% Chapter Heading 19.01 : Malt extract; food preparations of flour, meal, starch or malt extract, not containing cocoa or containing less than 40% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included; food preparations of goods of hearing Nos. 04.01 to 04.04, not containing cocoa or containing less than 5% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included.   -- Put up in unit containers :   1901.11 -- For infant use Nil 1901.19 -- ....

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.... record to show that the premix is primarily used as vitamins, its name notwithstanding. In fact it is a starch based product to which vitamins are added. Evidently the chapter heading 1901 is more specific. The Commissioner (Appeals) referred to Larger Bench decision in the case of Tetragen Chemie v. Commissioner reported in 2001 (138) E.L.T. 414 (LB) which was affirmed by Supreme Court in 2001 (132) E.L.T. 525 (S.C.) to rule out classification under CETH 2936. No judgment has been shown to us by Revenue to the contrary. 4. Revenue has also contended that the appellant manufactured and sold a product vitamin mixture to other buyers which is similar to the vitamin premix sought to be classified under CETH 2936. On the other hand, be....

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....ly a mixture of mineral where new Maltodex is used as a diluent. The description under CETH 2851 shows that the department sought to classify mineral premix under CETH 2851.90 as other inorganic compounds. We note that chapter Note 1 to Chapter 28 states that the headings of the chapter would apply to separate chemical elements and separate chemically defined compounds. The show cause notice itself states that goods in question are mixtures of various ingredients. From the process of manufacture it is clear that minerals were added to enhance the nutrient value of the starch preparation new Maltodex. The mineral premixes are homogeneous mixtures of ingredients and cannot be equated with separate chemically defined compounds. The Maltodex (7....