TaxTMI 
TaxTMI 
2019 (8) TMI 1804
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....vies and all types of cuisines. 2.1 The impugned good comprises of 26 per cent edible oil (hydrogenated palm kernel oil) to which other ingredients such as milk solids, sugar and premixes are added, thus, forming a mixture/preparation of vegetable oil. The composition of the product is tabulated as under: Name of Ingredient/additive Ratio Water 63.50% Edible Vegetable fat 26% Milk Solids 4% Sugar 1% Premix(emulsifiers, stabilizers, acidity regulators and preservatives) 5.5% 2.2 The process employed for manufacture of the Product is as under: Step 1 Sugar and water are mixed in a container (container 1) to form a sugar syrup. Milk creme/ vanilla flavour are added to the syrup so formed. Step 2 Hydrogenated vegetable palm kernel oil is mixed with emulsifier and stabilizers in another container (container 2). Step 3 The mixture in container 1 and 2 are mixed at a high speed and then heated at a temperature of 75 degree Centigrade to 80 degree Centigrade. Step 4 The resultant material is subject to pasteurization at a temperature of 75 degree centigrade to 50 degree centigrade. Step 5 After pasteurization, mixture is passed through plate heat exchanger and ....
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....ariff Act, 1975 and chargeable to IGST @ 18%, CGST @9% and SGST @9%, as specified under S. NO. 23 of Schedule-III of Notification No. 1/2017-Integrataaed Tax (Rate) dated June 28, 2017. Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 and of Notification No. 35/ST-2 under State Tax. Submissions made in the Appeal, by the Appellant: 7. The Authority in its Impugned Ruling has failed to take note of the additional submissions furnished and the factum of personal hearing on August 14, 2018. It apparently seems that the Authority did not bother to take into consideration the submissions advanced vide additional submissions and during the course of hearing. 7.1 In the case of Dharampal Satyapal Limited vs. DCCE, 2015 (320) ELT 3 (SC), the Apex Court explaining the concept and contours of principles of natural justice, observed that principles of natural justice include the following: (i) rule against bias, i.e. nemo judex in cause sua; (ii) opportunity of being heard, i.e. audi alteram partem-, (iii) passing of a reasoned order. These principles or attributes are natural or fundamental to the exercise of judicial powers. 7.2 The principle of audi alteram partem, i....
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....ompound preparations for making non-alcoholic beverages 2106 90 60 --- Food flavouring material 2106 90 70 --- Churna for pan 2106 90 80 --- Custard powder --- Other: 2106 90 91 ---- Diabetic foods 2106 90 92 ---- Sterilized or pasteurized millstone 2106 90 99 ---- Other 8.2 The Appellant contends that impugned good merits classification under Tariff Item 1517 90 90 bearing description 'Other'. It is a residuary entry which is provided under Heading 1517. Therefore, in order to classify under the aforesaid Tariff Item, the product must qualify under Heading 1517. 8.3 The Authority in the Impugned Ruling has held that impugned good is classifiable under Heading 2106. It is submitted that the relevant Tariff item under heading 2106 is 2106 90 99 bearing description 'Other' which is a four-dash entry covered under triple-dash entry 'Other'. The triple-dash entry is further covered under Sub-heading 2106 90 bearing description 'Other', which is a single-dash entry covered under Heading 2106. Therefore, the impugned good must answer to the description of goods mentioned against Heading 2106 in order to merit classification under Tar....
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....e of the HSN. 9.7 In the case of CCE v. Wood Craft Products Limited, 1995 (77) ELT 23 (SC), the Apex Court observed that the HSN Explanatory Notes serve as a safe guide for ascertainment of meaning of a term used in the Tariff Schedule in case of doubt. The relevant extract has been reproduced as under: "We are of the view that the Tribunal as well as the High Court fell into the error of overlooking the fact that the structure of the Central Excise Tariff is based on the internationally accepted nomenclature found in the HSN and, therefore, any dispute relating to tariff classification must, as far as possible, be resolved with reference to the nomenclature indicated by the HSN unless there be an express different intention indicated by the Central Excise Tariff Act, 1985 itself " 9.8 In the case of Reckitt Benckiser (India) Limited, v. Commissioner, Commercial Taxes, 2015 (7) SCC 126, the Apex Court held that when the taxation statute is aligned with the HSN codes, then, necessarily the interpretation has to be based on the HSN code, as available in the Customs Act. The judgment has been relied upon in the case of Parisons Food Private Limited v. Joint Commissioner of Commerc....
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....te of Kerela, 2011 (272) ELT 649 (SC) in which the following characteristics of margarine were discussed:- * Margarine is used as substitute for butter (dairy product) specially in bakery products. In the instant case, impugned good is used as a substitute for dairy cream (dairy product) for use in soups, gravies etc. * Margarine is prepared from refined and/or hydrogenated oils of sunflower, soyabean, cotton seed, palmoline, palm, sesame oils, vegetable oils, salt, permitted emulsifiers and stabilizers. In other words, the vegetable oil is present in maximum percentage. Thus, it is regarded as a preparation of vegetable oil and fractions thereof * Margarine is not consumed directly i.e. in the form in which it is available in the market or used for normal cooking as other oils like coconut, sunflower, etc., rather it is used for preparing bakery items consumed. 10.2.1 Impugned good is prepared by mixing various ingredients in hydrogenated palm kernel oil. Out of all the ingredients, vegetable oil is present in maximum percentage of 26 per cent. Although 63.50 per cent water is also present, it is added solely for the purpose of emulsifying all the ingredients. Emulsificatio....
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.... be called a cream under the FSS Act. However, a non-dairy substitute for a dairy cream prepared by imitating the constitution thereof by using vegetable oil, vegetable fat, skimmed milk powder etc. can be called a cream analogue, connoting that it is similar to cream. As submitted above, Heading 1517 covers preparation of vegetable fats or oils such as margarine etc., that are substitute of various dairy products. Impugned good being a non-dairy product is prepared using the same ingredients and qualifies as a cream analogue. 12. In the case of Shree Gopal Vanaspati Limited v. CC, 2014 (310) ELT 308 (Tri-Del), the classification of bakery shortening was under dispute. The assessee proposed the correct classification of the product under Heading 1516, however, the revenue classified the product under Heading 1517. The Tribunal observed that the shortenings were produced by further working up of vegetable fats by way of emulsification in texture resulting in tenderizing effect in finished products. Accordingly, the product was classifiable under Heading 1517. 12.1 US Customs Cross Ruling NY C81464 dealt with classification of vegetable fat spread, consisting of 69 percent vegetabl....
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....se of CCE v. Maharshi Ayurveda Corporation Limited, 2006 (193) ELT 10 (SC), the product under consideration was herbonic tonic, a mixture of assorted vegetarian and dry fruits and seeds which could be consumed as such. The assessee sought to classify the products under Heading 2008 whereas the revenue sought to classify the product under Heading 2106. The Apex Court observed that product was included under Heading 2008, hence Heading 2106 automatically became inapplicable. 13.5 In the case of CC v. Abott Healthcare Private Limited, 2015 (328) ELT 129 (Tri-Mum.), the product under consideration was 'Mama's Best Premium Chocolate', a nutritional powder. The importer classified under tariff item 1901 90 90 bearing description 'Other' as against revenue's classification under tariff item 2106 90 00 bearing description 'Other'. The Tribunal after considering the nature of goods and HSN Explanatory Notes, noted that the imported goods were classifiable under Heading 1901. It further held that Heading 2106 is a residuary entry. Thus, once goods are classifiable under a particular Heading, the same cannot be classified under Heading 2106. 13.6 In the case ....
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....the hearing on the fixed date and time. 16.1 During the hearing the appellant while reiterating the submissions made in their appeal papers put forth that the basic emphasis of their submissions was that impugned goods are correctly classifiable under Heading No. 1517. 16.2 Shri Puneet Bansal, Advocate emphasized that as per HSN Explanatory Notes, the product "Cooking Delite" is classifiable under Heading 1517 of Customs Tariff Act. He submitted that HSN Explanatory Notes for Heading 1516, inter alia, provides that "The heading includes the products as described above, even if they have a waxy character and even if they have been subsequently deodorized or subjected to similar refining processes, and whether or not they can be used directly as food. But it excludes hydrogenated etc, fats and oils and their fractions which have undergone such further preparation for food purposes as texturation (modification of the texture or crystalline structure) (Heading 1517)". 16.3 As per HSN Explanatory Notes, this heading covers margarine and other edible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this Chapter, other than those....
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....ient to which other ingredients are added, forming a mixtures/preparation of vegetable fat. Hence, it is classifiable under Heading 1517 which covers "Edible mixtures or preparation of vegetable fats or vegetable oil or of fractions of different vegetable fats or vegetable oil of this Chapter, other than edible fats or oils or their fractions of heading 1516" and chargeable to 5% IGST as specified under S. No. 89 of Schedule-I of Notification No. 1/2017-Integrated Tax. 18.2 The question for determination in this appeal is whether the product "cooking cream" manufactured/ supplied by the appellant merit classification under Heading 1517 as claimed by the appellant or classifiable under Heading 2106 as determined by the Authority for Advance Ruling, Haryana. 18.3. We found that for any given product, the name, character and use are three important ingredients which decide the classification of any given product. Hence we proceed to examine the classification of impugned item, keeping in mind the above guiding factors. 18.4 The impugned item is being sold by the appellant as "Cooking Cream" under the name 'Cooking Delite' consisting of water, Edible Vegetable Fat (hydrogena....
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....on, churning, texturation, etc. The heading includes hydrogenated, inter-esterified, re-esterified or elaidinized fats and oils or their fractions, where modification involves more than one fat or oil. The principal products of this heading are:- (A) Margarine (other than liquid margarine, which is a plastic mass, generally yellowish, obtained from fats or oils of animal or vegetable origin or from a mixture of these fats or oils. It is an emulsion of the water-in oil type, generally made to resemble butter in appearance, consistency, colour, etc. (B) Edible mixture or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this Chapter, other than edible fats or oils or their fractions of heading 15.16; for example, imitation lard, liquid margarine and shortenings (produced from texturised oils or fats). 18.5 We have observed that the product "Cooking Cream" or to say 'Cooking Delite' consists of water, Edible Vegetable Fat (hydrogenated palm kernel oil), Milk Solid, Sugar along with premixes of emulsifiers and stabilizers. 18.6 It is the case of the appellant that the 'Cooking Delite' manufactured by it with the abov....
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....oil. Margarine is a generic term and it is used as a substitute for butter. It is used in preparation of food articles and specially used for preparing bakery products. For the purpose of manufacturing margarine, refined and/or hydrogenated oils of sun-flower, soyabean, cotton seed, palmoline, palm and sesame oils are used. Moreover, vegetable oils, salt, permitted emulsifiers and stabilizers are also used for manufacturing margarine. So far as the margarine manufactured by the appellant is concerned, it is made only from vegetable oils as stated by the appellant and as borne out from the record. The margarine manufactured by the appellant is exclusively used as raw-material by bakeries and those who manufacture confectionaries. " 19.3 As per the HSN Explanatory Notes for the purpose of Heading 0405: (a) the term "butter" means natural butter, whey butter or recombined butter (fresh, salted or rancid, including canned butter) derived exclusively from milk., with a milk fat content of 80% or more but not more than 95% by weight, a maximum milk solids-not-fat content of 2% by weight and a maximum water content of 16% by weight. Butter does not contain added emulsifiers, but may c....
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.... Sugar as an ingredient which does not found place in the list of ingredients described in HSN Explanatory Notes of Heading 1517. Thus, the aforesaid case law of Parisons Foods Pvt Ltd is not applicable to the instant case. Moreover, the case of Parisons Foods Pvt Ltd relied upon by the appellant has not attained the finality and pending with the Apex Court. 21. Thus, we are of the considered view that the product 'Cooking Delite' is not classifiable under Heading 1517 of Customs Tariff Act. 22. Now the question before us is that if the impugned goods do not qualify to be classified under Heading 1517 of Customs Tariff Act, as claimed by the appellant then which is the appropriate Chapter Heading wherein the product in question is classifiable. We find that Authority for Advance Ruling in its ruling has classified the impugned product under Heading 2106 of Customs Tariff Act, 1975. 23. We examined the impugned product vis-a-vis Chapter 2106. We observe that Chapter 21 essentially covers 'Miscellaneous Edible Products'. Obviously, the term 'Miscellaneous' indicates that this particular chapter would contain all such edible products which are not specifical....