TaxTMI 
TaxTMI 
2018 (10) TMI 1788
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....ion 11AC of the Act. Along with the duty, interest has also been ordered to be paid under the provisions of Section 11AA of the Act. The issue involved relates to the classification various products being manufactured by the appellant company which is different types of cake mixes, baker mixes, etc. 2. Brief facts of the case are that the appellant is engaged in the manufacture of Cake Mixes, Baker Mixes, Bread improvers, Cake Improvers, Baker Puff Mix etc., which are used by the sweet shops, bakers, confectioners and super market for making cakes, manufacturing of biscuits, making of instant energy drinks, nutritional supplements etc. The appellant sells these items in the market under their brand name such as 'Bake Podric, 'Ico Puff' 'XP', Ico Biscuit IP', Brown Bread concentrates, Brown Bread mix, Bake sponge and Bake Brown, bakesorb IV/VII, etc. 3. The appellant has classified these products under Chapter heading 2106 90 99 of First Schedule to Tariff Act (for short CETA) Central Excise Act, and removed them at Nil rate of duty up to 28-2-2011 by availing of exemption from Central Excise Duty under Sl. No. 30A of Notification No. 3/2006, dated 1-3-2006, and ther....
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....d under item Heading No. 2106 90 99. (ii) That the items cake mixes have been permitted to be imported under Customs Tariff Chapter Heading 2106 90 99 under Customs Tariff Act, 1975 and hence same classification neads to be adopted under CETA, as the two Tariff acts are aligned to each other, which are based on Harmonized system of Commodity Description and Nomenclature (for short HSN). (iii) That the Department has proposed to reclassify these goods under Chapter Heading 1901 20 00 of CETA based on the classification of other manufacture, namely, M/s. General Mills India Private Limited. The department conducted enquiry about the classification of M/s. Genesh Mill through Nasik-II Commissionerate who confirmed the classification under Chapter Heading 1901 20 00. Shri Puneet Devar, Director of the appellant company (who is also the other appellant) in his statement recorded on 5-1-2016, explained the manufacturing process of the excisable goods manufactured by them and did not agree to the classification of M/s. General Mills India Private Limited, although he agreed to pay duty on ready to use mixes at the rate of 12.5% ad Volerum wi....
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....her or not containing added cocoa, fall in heading 18.06 to 19.01 according to their cocoa content (see the General Explanatory Note to Chapter 19). The other powders are classified in heading 18.06 if they contain cocoa. Powders which have the character of flavoured or coloured sugar used for the preparation of lemonade and the like fall in heading 17.01 or 17.02 as the case may be. (vi) Further, the HSN Note of Chapter 19.01 was also referred to and relied upon to the extent that the Tariff Item 1901 20 00 covers 'mixes and dough for the preparation of bakers wares of Heading 1905'. Thus the items which confirmed the core ingredient of Baker ware are only classifiable thereunder and not the items which are instantly used in the preparation with bakerware like flavouring agent, colour etc., The products manufactured by the appellant are, thus, not classifiable under Heading 1901. The HSN explanation is safe guide for the classification of goods and having binding force in the classification matters under Central Excise Tariff, which is based on HSN nomenclature. The reliance was placed on the following case laws in support of the arguments; • CCE,....
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....Tribunal upheld the classification of the product under Heading 0404 of CE Tariff and not under 1901. (ix) Ld. Advocate also submitted that there is no estoppel in taxation laws and earlier classification of the product under 2106 would not preclude their product classification under Chapter 4 or Chapter 11 of Central Excise Tariff depending on the constitution of ingredients used in making of the said product. The reliance was placed on the decision of Hon'ble Supreme Court in case of Crompton Greaves Ltd. v. CCE, [1996 (87) E.L.T. 414] confirmed by the Hon'ble Supreme Court as reported in 2002 (142) E.L.T. A85 among the other judgments. (x) Regarding the ready to use mixes, it was submitted that these products are not to be classified under 1901 of CETA as bakerwares but appropriately under Heading 0404 or under residuary Heading of 2106 as other food products not specified elsewhere. (xi) Ld. Advocate further submitted that the extended period of limitation is not invokable in this case and hence, the demand is substantially time bared. The penalty is also not imposable on the appellant as well as on the ....
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....2. Further Chapter heading 1901 of CETA covers three group of products, namely; (i) Malt extract, (ii) Food preparations of flour, groats, 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. (iii) food preparations of goods of heading 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. As the appellant does not manufacture the product of Malt extract to group on (i) is not relevant and so is the case for products falling in group, (ii), which consists of all the material derive from flour, groats or meals, which derive from essential character from such material which is not the case here. This leaves the classification to be considered for the items in question under group (iii) of HSN Notes to Tariff Heading 1901 which includes : • Preparation in powder or liquid form used as infant food or for dietetic purposes and consisting of milk to which secondary ingredient....
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....cor is quite substantial by weight, i.e. 40% to 45% (which is next only to sugar at 45% to 50%), however, still, in terms of the HSN Notes to Chapter heading 19.01, as extracted above, it emerges that the percentage content of starch is not relevant for classification of the product under this heading. What is relevant is that the product should derive its essential character from starch which is also supported by the HSN Notes to the Chapter Heading 2106. Further in the present case, the main ingredients providing the essential character to the product are colours and flavours. As the name and the product literature suggests, the product is cake decor and it intended to be used to decorate the product to enhance its appeal and aroma. Thus, any customer buying the product would have the colour and flavour of the product in mind and not the starch or sugar content. The sugar is used as carrier in the product providing sweetness to the product and starch is used to act as an anti-caking agent, so as to prevent formation of any lumps in the powdered cake decor. The use of starch helps in giving the free-flowing character to the product. Thus, the use of starch is not for imparting the....
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....A. Further, in terms of HSN Notes to the Tariff Heading 1901, only those milk products which contained ingredients which are not natural milk constituents are permitted to be added and that would not take the product out of purview of Chapter of Heading 04. Further, in terms of HSN Note to chapter Heading 1901, only those milk products are classifiable which are not the natural milk constituents and also not product of heading 0404. Therefore, classification of this product under residuary entry in Heading 1901 is not correct and proper. Being specific heading 0404 would have primacy over residuary Heading 1901. In holding so, we are supported by the Hon'ble CESTAT decision in case of Nestle India Limited v. CCE, Delhi - 2018 (8) G.S.T.L. 211 (Tri.-Del.), wherein it is held that the dispute the addition of artificial flavouring substances (which has been specified under this chapter Notes/HSN Notes to the Tariff Heading 0404), product are classifiable under 0404 on the ground that no substantive ingredient have been added to the product to change its essential character to that of the Chapter Heading 1901. Our view is also fortified by decision of Amrit Food (supra) and Nestle Indi....