2019 (11) TMI 1054

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....the goods under CETA 22029030 of CETA, 1985. Since August 2011, they have changed the classification to 04049000. The department has opined that the classification under 220290 was correct and the impugned goods needed to be charged to duty under M.R.P basis assessment in terms of Notification No.49/2008-CE (NT) dt. 24.12.2008 as amended by Notification No.11/2011-CE (NT) dt. 24.03.2011 read with Rule 8 of CCR 2002. SCNs have been issued to the appellants and have been confirmed vide OIO No.06/2015 dt. 2.7.2015 and OIA No.33/2017 dt. 18.08.2017. Accordingly, the appeals were filed. 2. Ld. Counsel for the appellant submits that the issue is no longer res integra and under Chapter 22 diary products in liquid form are excluded and therefore....

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....e HSN Notes to Tariff Headings 0404 and 1901, it is evident that milk powder would fall under Heading 1901 only if the same is excluded from Chapter 4. That brings us to the question whether adding artificial flavouring substance will jettison the product from Chapter 4 to Chapter 19. The reference to HSN Notes to Chapters 4 and 19 clearly indicates that there is no reference to flavouring substance being one of the prohibited ingredients for the product in Chapter 4. HSN Notes also make it clear that product would fall under Chapter 1901 only when natural milk constituents are added with other items such as cereal, groats, yeast, etc., or the milk constituent is replaced by an other substance such as oleic fats. From what is stated before ....

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....authority contended that it is not a permitted ingredient in products classifiable under Tariff Heading 0404. However, the Tribunal ruled in the favour of the assessee relying on the decision of Nestle India Limited (supra). It is pertinent to note that the aforesaid decision has been affirmed by the Hon'ble Supreme Court, as reported 2015 (324) E.L.T. 418 (S.C.). Thus, even when the stabilizers were not specifically mentioned in the Chapter Note 4 of the Central Excise Tariff Act, still the milk shake mixes containing the same were held classifiable under the Tariff Heading 0404 by CESTAT as well as the Hon'ble Supreme Court on the ground that stabilizers do not interfere with basic characteristics of the milk products and are added merely....