TaxTMI 
TaxTMI 
2023 (9) TMI 419
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....ounsel for the appellant pointed out that Commissioner (Appeals) changed the classification for impugned goods as detailed in Table below: Summary of classification dispute S.No. Product Name Department's Classification Appellant's Classification 1. BSN Syntha 6 Chocolate 21061000 18069040 2. BSN Truemass 1200 Chocolate 21061000 18069040 3. Isopure Low Carb - Chocolate 21061000 18069040 4. Isopure Zero Carb - Chocolate Mint 21061000 18069040 5. Optimum Nutrition 100% Casein-Chocolate Supreme 21061000 18069040 6. Optimum Nutrition 100% Whey Gold Standard- Chocolate 21061000 18069040 7. Optimum Nutrition 100% Whey Gold Standard- Chocolate Hazelnut 21061000 18069040 8. Optimum Nutrition 100% Whey Gold Standard- Chocolate Malt 21061000 18069040 9. Optimum Nutrition 100% Whey Gold Standard- Chocolate Mint 21061000 18069040 10. Optimum Nutrition 100% Whey Gold Standard- Chocolate Peanut Butter 21061000 18069040 11. Optimum Nutrition 100% Whey Gold Standard- Cookies and Cream 21061000 18069040 12. Optimum Nutrition 100% Whey Gold Standard....
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....ant filed appeals before Learned Commissioner (Appeals)disputing the reassessment and change in classification of the goods mentioned in Table above. The Learned Commissioner (Appeals)upheld the classification concluded by Learned AC vide a common impugned order. Learned counsel for the appellant pointed out that the primary reasons for finding against the Appellant are provided below: • Predominant ingredient: Impugned goods contain 72% protein with 'Whey Protein Isolate' and 'Whey Protein Concentrate' being the main ingredients. • Common Parlance: In common parlance the impugned goods are known as nutritional supplements consisting of whey protein concentrates. • Note 5 to Chapter 21 of Customs Tariff includes Protein Concentrates and suggests classification under CTH 2106. • Cocoa is not the main ingredient in the impugned goods. 5. Learned counsel for the appellant argued that without considering the submissions made by the Appellant, the classification mentioned in Column-3 to Table above was upheld by Ld. Commissioner (Appeals).Ld counsel for the appellant pointed out that aggrieved by the classification of impugned goods....
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....assification Learned counsel for the appellant argued that before getting into the classification of impugned goods, it is important to analyse the general rules governing classification of goods under Customs Tariff. He argued that it is trite law that a product is to be classified basis the condition in which such goods are presented for clearance to the Customs Authorities. He relied on the following decisions (i) Dunlop India Ltd. v. UOI 1983 (13) E.L.T. 1566 (SC); (ii) Commissioner v. Sony India Ltd. 2008 (231) E.L.T. 385 (S.C.)]. He further argued that the appropriate classification of goods is determined by following the General Rules for the Interpretation of Import Tariff ("GIR"). He argued that for the purposes of present submission, it is important to consider GIR Rule 1, 3(a) and 6, which must be applied sequentially. He relied on the following (i) Taj Sats Air Catering Ltd. v. CC Ex., Delhi-II, 2016 (334) E.L.T. 680 (Tri-Del.); (ii) Circular 36/2013-Cus. Dated 05.09.2013 He argued that as per the GIR Rule 1, the classification of goods must be done in accordance with the Chapter Heading (CTH) and any relevant Section and Chapte....
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....e entry has been provided hereinbelow for the ease of reference: Tariff Item Description of goods Unit Rate of duty Std. Pref. Areas (1) (2) (3) (4) (5) 1806 Chocolate and other food preparations containing cocoa Kg. - [...] [...] [...] [...] [...] 1806 90 - Other 30% 1806 90 10 --- Chocolate and chocolate products 30% 1806 90 20 --- Sugar confectionary containing cocoa 30% 1806 90 30 ---- Spreads containing cocoa 30% 1806 90 40 ---- Preparations containing cocoa for making beverages 30% 1806 90 90 ---- Other Kg. He argued that the phrase "food preparation" have not been defined in the Customs Tariff Act or Explanatory Notes. Hence, emphasis must be laid on the plain meaning of the phrase and its use in general parlance. He argued that the term 'preparation' has been defined in Kothari Chemicals v. UOI, 1996 (86) E.L.T. and Reckitt and Colman of India Ltd., Calcutta v. CCE, Calcutta, 1985 (22) ELT 216 (....
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.... (i) 'food preparations' of CTH 0401 to CTH 0404 of Customs Tariff; and (ii) It contains 'less than 5%' of defatted cocoa by weight. He argued that in case of food preparation of whey of CTH 0401 to CTH 0404 containing defatted cocoa more than or equal to 5% by weight (defatted), such food preparation would not be classified under CTH 1901 of Customs Tariff. He argued that this view is further augmented by specific exclusion provided in HSN Explanatory Note to Chapter 18, HSN Explanatory Note to CTH 1901, and HSN Explanatory Notes to CTH 2106 which provides that food preparations of CTH 0401 to CTH 0404 containing less than 5% cocoa (by weight) are instead covered under CTH 1901. He argued that if the product under consideration does not satisfy the dual condition as summarised in Para above, such goods irrespective of their cocoa content are classifiable under CTH 1806 of Customs Tariff. He relied on HSN Explanatory Notes to CTH 2106 and HSN Explanatory Notes to CTH 1806. 11. He argued that CTH 2106, covers "Food preparations not elsewhere specified or included". In other words, for classification under CTH 2106 of Customs Tariff requires two conditions to be sa....
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....hat in the present case, the impugned goods have cocoa content (not defatted) between the range of 1to 10%. Therefore, he argued that the impugned goods merit classification under CTH 1806 of Customs Tariff, which covers "Chocolate and other food preparations containing cocoa". 13. He relied on similar observations made by the Authority on Advance Ruling (AAR) in the decision of In Re: Karnataka Co-operative Milk Producers Federation Ltd., 2021 (46) G.S.T.L. 160 (A.A.R. - GST - Kar.). He argued that on logically extending GIR Rule 6 read with GIR Rule 1 to sixth and eight-digit level, the impugned goods are appropriately classifiable under CTI 1806 90 40 of Customs Tariff, which reads as "Chocolate and other food preparations containing cocoa: Other: Preparations containing cocoa for making beverages". 14. He further argued that the issue in respect of "Cookies & Cream" flavoured whey protein powder came up for discussion before the 68th WCO's Harmonized System Committee of September 2021. He argued that this decision, having Doc. NC2855Eb/K/6, WCO's HS Committee concluded that "Cookies & Cream" flavoured whey protein powder containing cocoa (along with processed alkali) of~1....
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....freight tariffs and transport statistics and intended to be incorporated into commercial commodity description and coding systems to the greatest extent possible, as contemplated by the preamble to the Convention. It was undertaken by its "Contracting Parties" that from the date on which the convention entered into force in respect of it, its customs tariff and statistical nomenclatures shall be in conformity with the Harmonised System. Each contracting party undertook in respect of its Customs tariff and statistical nomenclatures that: - "(i) it shall use all the headings and subheadings of the Harmonised System without addition or modification, together with their related numerical codes; (ii) it shall apply the General Rules for the interpretation of the Harmonised System and all the Section, Chapter and Subheading Notes, and shall not modify the scope of the Sections, Chapters, headings or subheadings of the Harmonised System; and (iii) it shall follow the numerical sequence of the Harmonised System." (Emphasis Supplied) Learned Counsel argued that the HSN acts as the basis for the classification of the goods across the world. He submitted that ....
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.... not be classifiable under tariff sub-heading 2106 10 00 of Customs Tariff. 23. Learned Counsel also relied on the HSN Explanatory Note to CTH 2106 which specifically mentions that CTH 2106 only covers those goods which are not covered under any other heading of the Nomenclature. Relevant extract reproduced hereinunder: "Provided that they are not covered by any other heading of the Nomenclature, this heading covers: (A) Preparations for use, either directly or after processing [...] (B) Preparations consisting wholly or partly of food stuffs [...]" Ld Counsel argued that the aforementioned conclusion is also supported by virtue of specific exclusion provided under HSN Explanatory Notes of 2022 for CTH 2106. Here, it is relevant to note that under HSN Explanatory Notes of 2022 of CTH 2106, food preparations containing cocoa have been specifically excluded from falling under CTH 2106. Relevant extract reproduced hereinunder: "[...] This heading further excludes (a) Preparations containing cocoa, put up as food supplements for human consumption (heading 18.06)" Learned Counsel argued that impugned goods are correctly classifiab....
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.... confirmed the classification under CTH 2106 of Customs Tariff. He argued that the doctrine of commercial nomenclature or trade understanding must be departed where the statutory context in which the tariff item appears requires such departure. He placed reliance on decision of the Hon'ble Supreme Court in the case of Akbar Badruddin Jiwani v. Collector of Customs, 1990 (47) ELT 161 (SC). The Hon'ble Supreme Court in this case was dealing with the classification of 'marble'. This term in the technical criteria required gravity of 2.5% or more. Accordingly, the Hon'ble Supreme Court discarded the commercial understanding of the product and held that where HSN contains specific definition then such definition must be preferred, and doctrine of commercial nomenclature must not be applied. Ld Counsel argued that similar observations have also been made by the Hon'ble High Court of Mumbai in the case of Kulkarni Black & Decker Ltd. v. UOI, 1992 (57) E.L.T. 401 (Bom). The relevant extract from Kulkarni (Supra)summarizing the legal position has been extracted herein under for ease of reference: "It is now settled by catena of decisions of the Supreme Court and this Court that it ....
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....s. Reliance in this regard is being placed on the decision of CC (Prev) Kolkata v. Anutham Exim Pvt. Ltd., 2021 (378) E.L.T. 611, wherein the Hon'ble CESTAT at Kolkata held that classification based on predominant test based on composition of the product is incorrect in law and may give rise to absurd classification result. 29. Learned Counsel argued that Ld. Commissioner (Appeals) in Para 6.1 of impugned order, observed that cocoa has not been mentioned as the main ingredient on the label of the product. He pointed out that the name on the label and Bills of Material gives reference to the cocoa content of the product. Ld Counsel argued that the label of the impugned goods invariably mentions the presence of cocoa on the product name. 30. Learned Counsel argued that the impugned goods are more appropriately classifiable under CTH 1806 of Customs Tariff and on account of failure of revenue to justify classification under the CTH 2106 of Customs Tariff, the entire proceedings initiated by the Department is unsustainable. He placed reliance on the decision of L&T v. CC, Mundra, 2021-VIL-224-CESTAT-AHM-CUwherein this Hon'ble Tribunal whilst relying on the dictum of Hindustan Fer....
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.... 17(5) of Customs Act on the issue of classification. Ld Counsel argued that it is trite law that the assessment cannot be undertaken by Learned AC in a piecemeal manner. Learned Counsel argued that during the pendency of the SVB investigation, passing of speaking order on issue of classification under Section 17(5) of Customs Act must be discouraged. He places reliance on the decision of CCEx, Madras v. Enfield India Ltd., 1999 (114) E.L.T. 162 (Tri) wherein the Hon'ble CEGAT held that more than one order finalising the assessment cannot be made by the proper officer. In this case, the Hon'ble Tribunal noted that once an assessment is provisional, it is deemed to be provisional on all counts. He also relied on the case of ITC Ltd. v. Collector of Central Excise, Patna, 1998 (102) E.L.T. 660 (Tri), where the Tribunal held that issues of classification cannot be separated from the question of valuation. Thus, provisional assessment remains provisional in respect of all issues, which must be adjudicated together and not in a piecemeal manner. Accordingly, the Tribunal remanded the matter back for fresh adjudication including all the issues involved therein [In Re: Castrol India Ltd.,....
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.... 21069099 Learned AR pointed out that the appellant has paid duty under protest on the imported goods under CTH No. 21061000 and CTH No. 21069099. 32. The Bills of Entry were re-assessed by way of Speaking Orders under Section 17(4) of the Customs Act, 1962 thereby the import goods are ordered to be classified under CTH 21061000 for Nutritional Supplements and under CTH No. 21069099 for Glutamine Powder and Creatine Powder. It was also ordered for vacation of protest for payment of customs duty. Aggrieved with the order of the assessment, the appellant have filed appeal before the Commissioner (Appeals), Customs, Ahmedabad. Ld AR pointed out that the appellant vide their letter dated 26-08-2022 have accepted the classification of Creatine Powder and Glutamine Powder under CTH No. 21069099. 33. Learned AR pointed out that the Labels of all the products produced by the appellant clearly mention that the main ingredients of the imported goods are "Whey Protein Isolate (WPI) and Whey Protein Concentrate (WPC)". For example, the actual description of the import goods as declared in Bill of Entry No. 3139731 dated 07-052019 and their protein content per 100 grams as appearing....
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....ingredients as protein concentrate, soy lecithin, calcium caseinate, milk protein isolate, whey protein isolate, micellar casein, hydrolysed whey protein, egg whites, etc....". Further, these products are known to buyers in the market as Whey Protein Concentrates. Therefore, in the trade and commercial parlance, identity/ classification of the import goods is clearly known as nutrition supplements consisting of whey protein concentrates which people take for the general well beings of humans. 35. Learned AR argued that the classification of import goodsis to be determined as per the guidelines enunciated in "General Rules for the Interpretation of the Harmonized System". It contains a set of 6 rules for classification of goods in the Tariff Schedule. These rules have to be applied sequentially. 36. Learned AR pointed out that the appellants have imported goods like Gold Standard 100% Whey, Isopure Protein Powder, Gold Standard 100% Isolate, Serious Mass, True Mass 1200, Syntha-6, etc. Ld AR pointed out that these products are known in the market and by the public as "Nutrition Supplements". There is no dispute that the appellants have also declared these products as "Nutritio....
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....re addition of flavouring agent does not change the character, use or classification of the product. 39. Learned AR relied on the case of Wander Ltd Vs. Collector of Central Excise, Bombay, the Tribunal, Delhi - reported at 1999 (110) ELT 735 (Tribunal) to assert that protein concentrate are rightly classifiable under heading 2106 and not under chapter 4 as dairy product. 40. Learned AR relied on the case of Collector of Central Excise Vs. Frozen Foods Pvt. Ltd - reported at 1992 (59) ELT 279 (Tribunal), wherein it was held that dietary supplement 'Surje', consisting of whey protein and casein peptides (37%), carrier and sweetening agents (62%) and flavouring and vitamins (1%), put up in unit containers classifiable under sub-heading 2107.91 (presently covered under sub-heading 2106).Ld AR relied on the case of Commissioner of Customs(Import), Mumbai Vs. E. I. Dupant (I) Pvt. Ltd - reported at 2005 (190) ELT 20 (Tri.-Mumbai). Ld AR relied pointed out that theTribunal while deciding similar issue of classification of Kit-Kat coated with chocolate in the case Nestle (India) Ltd Vs. CCE, Mumbai - 2000 (124) ELT 898 held that "13. It might have been necessary, in view of....
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.... goods except goods at Sl No. 7, 11 & 15, contain protein more than 70%. Hence these products can be classified as protein concentrates under CTH 21061000. 41. Learned AR argued that finalization of classification issue was under the competency of the adjudicating authority and the finalization on valuation issue was under SVB. That is the reason, the adjudicating authority in the order portion mentioned that "this order is issued without prejudice to the outcome of the issue of supplies from related party which is to be decided by the Special Valuation Branch, Mumbai". 42. Learned AR argued that it is not forthcoming whether the appellant have submitted labels of all their products, bills of materials, etc. before the adjudicating authority. It can be definitely said that all bills of materials submitted by the appellant before this hon'ble Tribunal are issued on 18-08-2022. These were not produced before the adjudicating authority or before the first appellate authority. FINDINGS: 43. We have considered the rival submissions. After raising the ground of assessment being provisional and piecemeal finalisation of assessment the appellants have given up this issue. The L....
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....ritten submissions they have argued as follows: "B.2 Nature of food preparation: In the present case, on perusal of the Bills of Material and Labels available on Page 288 and Page 273 of Additional Paper Book, respectively, constituents of the impugned goods have undergone a process to make them independent of its constituents [Process Chart, Additional Paper Book, p. 305]. Hence, the impugned goods are in the nature of "food preparations". This fact is undisputed between the parties. It is on this ground alone, classification under CTH 3502 and CTH 3504 of Customs Tariff are ousted as they do not relate to food preparations [HSN Explanatory Notes to CTH 3502, Para (1), pg. VI-3502-1; and HSN Explanatory Notes to 3502, Para B (6), pg. VI3504-1] [Compilation, p. 33-34] B.4 Coming to classification under CTH 1901, the impugned goods contain albumin and other protein concentrates which are acting as the base material [Bill(s) of Material, Additional Paper Book, p. 288-287].In other words, the impugned goods are food preparations of having constituent ingredients from CTH 3502 and CTH 3504, and are not food preparations of CTH 0401 to CTH 0404. Thus, it is submitted t....
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....- Pan masala kg. 150% - 21069030 --- Betel nut product known as "Supari" kg. 150% - 21069040 --- Sugar-syrups containing added flavouring or colouring matter, not elsewhere specified or included; lactose syrup; glucose syrup and malto dextrine syrup kg. 150% - 21069050 --- Compound preparations for making non-alcoholic beverages kg. 150% - 21069060 --- Food flavouring material kg. 150% - 21069070 --- Churna for pan kg. 150% - 21069080 --- Custard powder kg. 150% - --- Other : 21069091 ---- Diabetic foods kg. 150% - 21069092 ---- Sterilized or pasteurized millstone kg. 150% - 21069099 ---- Other kg. 150% - The products imported by the appellant are essentially Protein Concentrates of Whey Protein with additives, in different proportions. The other additives to the product can be of various kinds like flavouring agents, stabilisers etc. The argument of the appellant is that the description of Customs Tariff Heading 2106 which reads as under "CHOCOL....
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....EY'." Ld Counsel has described the product as "chocolate protein powders/chocolate-flavoured protein powders" as can be seen from his submissions in para 6 above. These powders are used by the athletes and sport persons as food supplements to supplement their protein intake. The argument of the appellants is that mere presence of cocoa in the impugned products rules out classification under heading 2106 and takes it into heading 1806. 48. Such Protein Concentrates of Whey Protein are made in many flavours like Double Rich Chocolate, Chocolate Bliss, Cream Vanilla, Delicious Strawberry, Vanilla Ice-Cream, Mocha Cappuccino etc. The compositions and the main ingredients of all such products is similar. All such products, except those containing cocoa, are classified by appellants themselves under heading 2106. The dispute is solely related to the Protein Concentrates of Whey Protein containing some amount of cocoa. The appellants are seeking to classify the same under heading 1806. The assertion is based on the Chapter and heading notes of the HSN to chapter 18 and 21 and some decisions of foreign countries and international bodies. 49. To examine the issue the comparative ch....
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....ing, preservation or other purposes. Such preparations may contain a small quantity of visible pieces of ingredients. 3.- For the purposes of heading 21.04, the expression "homogenised composite food preparations" means preparations consisting of a finely homogenised mixture of two or more basic ingredients such as meat, fish, vegetables or fruit, put up for retail sale as infants or young children or for dietetic purposes, in containers of a net weight content not exceeding 250g. For the application of this definition, no account is to be taken of small quantities of any ingredients which may be added to the mixture for seasoning, preservation or other purposes. Such preparations may contain a small quantity of visible pieces of ingredients. SUPPLEMENTRY NOTES : 1. In this Chapter, "Pan masala" means any preparation containing betel nuts and any one or more of the following ingredients, namely: lime, katha (catechu) and tobacco whether or not containing any other ingredient, such as cardamom, copra or menthol. 2. In this Chapter "betel nut product known as Supari" means any preparation containing betel nuts, but not containing any one or more of the following ingredien....
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....F CUSTOMS TARIFF ACT CHAPTER NOTES OF CHAPTER 18 OF HSN NOTES:- NOTES:- 1. This Chapter does not cover the preparations of headings 0403, 1901, 1904, 1905, 2105, 2202, 2208, 3003 and 3004. 1. This Chapter does not cover the preparations of heading 04.03, 19.01, 19.04, 19.05, 21.05, 22.02, 22.08, 30.03 or 30.04. 2. Heading 1806 includes sugar confectionary containing cocoa and, subject to Note 1 to this Chapter, other food preparations containing cocoa. 2. Heading 18.06 includes sugar confectionery containing cocoa and, subject to Note 1 to this Chapter, other food preparations containing cocoa. Not alligned GENERAL This Chapter covers cocoa (including cocoa beans) in all forms, cocoa butter, fat and oil and preparations containing cocoa (in any proportion), except: (a) Yogurt and other products of heading 04.03. (b) White chocolate (heading 17.04). (c) Food preparations of flour, groats, meal, starch or malt extract, containing less than 40% by weight of cocoa calculated on a totally defatted basis, and food preparations of goods of headings 04.01 to 04.04 containing less than 5% by weight of cocoa calculated on a totally defatted basis, of he....
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....s follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3 (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to 3 (a) or 3 (b), they shall be classified under the beading which occurs last in numerical order among those which equally merit consideration." We agree with the proposition made by the Ld counsel reproduced in para 8 above that product is to be classified basis the condition in....
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....when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in the numerical order among those which equally merit consideration." 12. Applying the Rules of Interpretation particularly Rule 1, we are of the opinion that the reasoning of the Tribunal in Jyoti Overseas is unexceptionable and in our opinion the decision in Simplex-I was correctly overruled." (ii) The Hon'ble Apex Court in the case of C.C. Amritsar vs D.L. Steels 2022 (381) ELT 289 (S....
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....ied under the heading appropriate for the goods "to which they are most akin". GRI-5 applies exclusively to cases and packing material, and therefore, is not apropos. GRI-6 states that the classification of goods in the sub-headings of a Heading shall be determined according to the terms of those sub-headings and any related Notes, and mutatis mutandis to the above GRIs, on the understanding that only sub-headings at the same level are comparable." (iii) In the case of Westinghouse Saxby Farmers Ltd. 2021 (376) ELT 14 (SC) the Hon'ble Apex Court has observed as follows: "31. But in invoking General Rule 3(a), the Authorities have omitted to take note of 2 things. They are : (i) that as laid down by this Court in Commissioner of Central Excise v. Simplex Mills Co. Ltd. [(2005) 3 SCC 51 = 2005 (181) E.L.T. 345 (S.C.)] the General Rules of Interpretation will come into play, as mandated in Rule 1 itself, only when no clear picture emerges from the terms of the Headings and the relevant section or chapter notes; and (ii) that in any case, Rule 3 of the General Rules can be invoked only when a particular goods is classifiable under two or more Headings, either by application....
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.... that the tooth paste, being dentifrice has been correctly classified under the HSN and the Central Excise Tariff has been based on HSN. Accordingly it is essential to follow the correct classification of the product in question as described and classified under the relevant chapter of HSN. In this connection it may be mentioned that the Hon'ble Supreme Court in the case of CCE, Shillong v. Wood Craft Product Ltd. reported in 1995 (77) E.L.T. 23 (S.C.) in para 18 has held that the structure of 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 in the Central Excise Tariff Act, 1985 itself. Further it may be mentioned that the Hon'ble Bombay High Court in the case of Jagdish D. Devgekar v. Collector of Central Excise, Poona reported in 1978 (2) E.L.T. (J581) in para 6 has held that the correct test in interpreting any item mentioned in the First Schedule to the Central Excise Act is to see the commercial sense in which the it....
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....ers to HSN Item 3306 and the bifurcations as also under CETA, 1985 there is a variance seen. In other words, this bifurcation under Heading 3306 for HSN and is not pari materia and under CETA, 1985 and therefore, the sub-heading structure of HSN would not apply to CETA. The CETA proves preparation for oral or dental hygiene including Dentifrices and Denture Fixative paste and powders under Heading 3306 and at the four digit level it is para material HSN. The scope of sub-heading 3306.10 of CETA, 1985 restricts it to only 'tooth powder and paste' and any entity which is not a 'toothpowder or toothpaste' would be covered under Heading 3306.90. This submission has to be upheld." We find ourselves in agreement with the aforesaid approach of the Tribunal having regard to the cogent reasons given by it. 12. This Court in the case of Camlin Limited v. Commissioner of Central Excise, Mumbai - (2008) 9 SCC 82 = 2008 (230) E.L.T. 193 (S.C.) held that if the entries under HSN and the entries under the Central Excise Tariff are different, then reliance cannot be placed upon HSN Notes for the purposes of classification of goods under Central Excise Tariff. This is so ....
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....on also in para 13 following has been observed: "13. The Schedule to the Customs Tariff Act, 1975 (commonly referred to as Customs Tariff) is based on, although it is not identical to, the Harmonised System of Nomenclature (HSN) - an internationally recognised scientific method of classifying all goods. Sometimes there are differences between the HSN and the Customs Tariff in which case, the latter is relevant for determining the duty liability under the Customs Act. In view of the explanation to this effect in the IGST Notification specifying the rates of IGST chargeable on different goods, IGST is also to be charged as per the classification under the Customs Tariff. Customs Tariff, groups goods into Sections, each of which is further divided into Chapters with a two digit Chapter number. Within each Chapter, there are four digit headings which are further divided into six digit and still further divided into eight digit tariff headings." Thus even going by the decision cited by the appellant, it is seen that no reliance can be placed on HSN when the Schedule to the Customs Tariff Act is not aligned with the HSN. 52. It is seen that there are major differences betw....
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....damom, copra or menthol. 2. In this Chapter "betel nut product known as Supari" means any preparation containing betel nuts, but not containing any one or more of the following ingredients, namely: lime, katha (catechu) and tobacco whether or not containing any other ingredients, such as cardamom, copra or menthol. 3. For the purposes of tariff item 2106 90 11, the expression "Sharbat" means any non-alcoholic sweetened beverage or syrup containing not less than 10% fruit juice or flavoured with non-fruit flavours, such as rose, Khus, Kevara, but not including aerated preparations. 4. Tariff item 2106 90 50, inter alia, includes preparations for lemonades or other beverages, consisting, for example, of flavoured or coloured syrup, syrup flavoured with an added concentrated extract, syrup flavoured with fruit juice and intended for use in the manufacture of aerated water, such as in automatic vending machines. 5. Heading 2106 (except tariff items 2106 90 20 and 2106 90 30), inter alia, includes: (a) protein concentrates and textured protein substances; (b) preparations for use, either directly or after processing (such as cooking,....
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....; 21061000 - Protein concentrates and textured protein substances kg. 40% - 210690 - Other : --- Soft drink concentrates : 21069011 ---- Sharbat kg. 150% - 21069019 ---- Other kg. 150% - 21069020 --- Pan masala kg. 150% - 21069030 --- Betel nut product known as "Supari" kg. 150% - 21069040 --- Sugar-syrups containing added flavouring or colouring matter, not elsewhere specified or included; lactose syrup; glucose syrup and malto dextrine syrup kg. 150% - 21069050 --- Compound preparations for making non-alcoholic beverages kg. 150% - 21069060 --- Food flavouring material kg. 150% - 21069070 --- Churna for pan kg. 150% - 21069080 --- Custard powder kg. 150% - --- Other : 21069091 ---- Diabetic foods kg. 150% - 21069092 ---- Sterilized or pasteurized millstone kg. 150% - 21069099 ---- Other kg. 150% - ....
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....nstruction of the tariff entry. There is neither intendment nor equity in a taxing statute. Nothing is implied. Neither can we insert nor anything can we delete but it should be interpreted and construed as per the words the legislature has chosen to employ in the Act or Rules. There is no room for assumption or presumptions. The object of the Parliament has to be gathered from the language used in the statute. The contention that toilet soap is commercially different from household and laundry soaps, as could be seen from the opening words of Entry 15, needs careful analysis. It is well, at the outset, to guard against confusion between the meaning and the legal effect of an expression used in a statute. Where the words of the statute are plain and clear, there is no room for applying any of the principles of interpretation which are merely presumption in cases of ambiguity in the statute. The court would interpret them as they stand. The object and purpose has to be gathered from such words themselves. Words should not be regarded as being surplus nor be rendered otiose. Strictly speaking there is no place in such cases for interpretation or construction except where the words of....
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....tatue a construction which would preserve the purpose of the provision must be adopted. It is well-settled that in interpreting a taxing statute normally, there is no scope for consideration of principles of equity. It was so said by Rowlatt J. in Cape Brandy Syndicate v. Inland Revenue Commissioners [1921 (1) KB 64 at page 71] : "In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." The above observation has been quoted with approval by a Bench of three Judges of this Court in Commissioner of Income Tax, Madras v. Ajax Products Ltd. [55 STC 741]. In another decision rendered by a Bench of three Judges of this Court in The State of Tamil Nadu v. M.K. Kandaswami and others [36 STC 191] it has been observed thus: "In interpreting such a provision, a construction which would defeat its purpose and, in effect, obliterate it from the statute book should be eschewed. If more than one construction is possible, that which preserves its workability and....
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....following has been observed: "Ingredients breakdowns accompanied your November letter. Additional information was provided with your February letter and an email transmission dated February 29, 2012. Whey Protein Powder will be offered in two flavors-chocolate and vanilla. Ingredients common to both products are approximately 37-38 percent whey protein isolate, 34-36 percent whey protein concentrate, 12-13 percent fructose, 6 percent l-glutamine, 2-3 percent chicory root extract (inulin), one percent erythritol, and less than one percent, cach, colloid gum powder, sodium chloride, aminogen (plant enzyme), cream flavor, red orange extract, ascorbic acid and stevia- rebiana. Other ingredients, depending on the flavor, include about 2 percent cocoa (lecithinated), 2 percent chocolate flavor and I percent natural vanilla flavor. Both products will be put up for retail sale in containers holding 908 grams, net weight, and used as a food supplement. You have suggested that the subject products are classifiable in subheading 0404.10.0500. Harmonized Tariff Schedule of the United States (HTSUS), which provides for whey protein concentrates. We disagree. Based on the ingre....
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....in Concentrate and Whey Peptides), Cocoa (processed with alkali), Artificial Flavor, Lecithin and Acesulfame Potassium. The main ingredients in 100% Whey Gold Standard-Chocolate are Protein Blend (Whey Protein Isolate, Whey Protein, Concentrate and Whey Peptides), Cocoa (processed with alkali), Artificial Flavor, Lecithin and Acesulfame Potassium. All products are in powder form, put up for retail sale in plastic containers. The 100% Whey Classic-Chocolate comes in sizes weighing either 2 pounds or 5 pounds. The 100% Whey Gold Standard - Chocolate comes in sizes weighing 1 pound, 2 pounds, 5 pounds or 10 pounds. The product is mixed with water, milk or other beverages to make a dietary supplement. The applicable subheading for the 100% Whey Classic - Chocolate and 100% Whey Gold Standard-Chocolate will be 1806.90.90, Harmonized Tariff Schedule of the United States (HTSUS), which provides for chocolate and other food preparations containing cocoa... other... other... other. The rate of duty will be 6 percent ad valorem." (III) Similarly in the tariff Ruling No. N028196 dated 02.06.2008 by Robert B. Swierupski Director National Commodity Specialist Division, has ....
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....placed on these decisions. 56. Ld counsel has also relied on the fact that the Explanatory Notes to the HSN were amended by the HSN Committee in its 64th Session in September 2019 to introduce a specific exclusion for Chapter heading 2106 ("Amendment to Chapter heading 2106"). The amendments were made applicable from 1st December 2019. The relevant extract of the Amendment to Chapter heading 2106 is reproduced below for ease of reference- .. CHAPTER 21 Heading 21.06 Page IV-2106-3. Item (16) .... Insert a new exclusion note (c): (c) Preparations containing cocoa, put up as food supplements for human consumption (heading 18.06). While such amendments would have relevance if the Customs Tariff is aligned with the HSN, such changes have no relevance when Government of India has chosen to deviate from the HSN by specially prescribing that the impugned products would be classified under 'Heading 2106". The prescription in Chapter Supplementary Note 5(a) would take precedence over the HSN Heading Notes of the CTH 2106. In case of heading 2106, the government has chosen to deviate from the prescription of the HSN by introducing S....
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....ted. 60. I would like to briefly dwell upon the evolution of public international law in Indian context and how entering into various international treaties did not circumscribe the sovereignty of member states including India. Whenever International Treaties were sought to be implemented by the sovereign states in their capacity as members of such treaties, reservations were either permitted by the treaties or were brought in for approval by member states to safeguard their own national interests. 61. As far as the Constitution of India is concerned which acts as a grundnorm, for all laws made by Indian Legislature. Validity of enactments by legislature is derived from Article 73 of the Constitution of India delineates the extent of executive power of the union which extends for all matters with respect to which the Parliament has a right to make laws and it extends to the exercise of such wide authority and jurisdiction as are excisable as a Central Government by virtue of any treaty or agreement. 62. This gives, through Article 73 (b), the Central Government a power to enter into international treaties/ agreement/ conventions under Article 73 and also to the Parliament ....
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....tions in treaties, wherever allowed but also in case of any provision not being in tune with treaty provisions, it will be municipal law which shall prevail." 64. Now coming to specific provisions about HSN, the following are the relevant extracts as derived from HS Classification Handbook of World Custom Organization November-2013 Edition part II/1 following has been stated as object of bringing in world product nomenclature: "At its 1976 Sessions, the United Nations Statistical Commission took a policy decision that UN economic classifications should be harmonized by using HS subheadings as building blocks. The Standard International Trade Classification (SITC, Rev. 3), the International Standard Industrial Classification of all economic activities (ISIC) and the Central Products Classification (CPC) have been prepared on the basis of this decision. As regards the application of the Harmonized System by users other than Customs authorities and statisticians, good progress has been made in broadening the acceptance of the System. Several maritime conferences and numerous European and Asian railway networks associated with the International Union of Railways (U....
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....the texts of the readings and of these Notes cannot, of themselves, determine the appropriate heading with certainty. Classification is then effected by application of the other Interpretative Rules. The first part of Rule 2 (a) extends the scope of any heading which refers to a particular article to cover not only the complete article but also that article incomplete or unfinished, provided that, as presented, it has the essential character of the complete or finished article. The second part of Rule 2 (a) provides that complete or finished articles presented unassembled or disassembled, usually for reasons such as the requirements or convenience of packing, handling or transport, are to be classified in the same heading as the assembled article. Rule 2 (b) extends the scope of any heading referring to a material or substance or articles made therefrom. Under this Rule, goods consisting of more than one material or substance must, unless another heading refers to them in their mixed or composite state, be classified according to the principles of Rule 3. Rule 3 provides classification principles for goods which, prima facie, fall under two or more headin....
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....f the appropriate 2-dash subheading, where necessary, may be made only on the basis of the texts of the subdivisions within the applicable 1-dash subheading. The Interpretative Rules thus establish classification principles which are applicable throughout the Harmonized System Nomenclature. Moreover, the Interpretative Rules clearly provide a step-bystep basis for the classification of goods within the Harmonized System so that, in every case, a product must first be classified in its appropriate 4-digit heading, then to its appropriate 1-dash subdivision within that heading and only thereafter to its appropriate 2-dash subheading within the predetermined 1 dash subdivision. It should be emphasized that at each step in the process, no account is taken of the terms of any lower-level subdivisions. This principle applies without exception throughout the Harmonized System. (Emphasis supplied) (b) Section and Chapter Notes, including subheading Notes Certain Sections and Chapters are preceded by Notes which, like the Interpretative Rules form an integral part of the Harmonized System and have the same legal force. Some of these Notes, grouped under the title ....
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....a great deal of repetition. The Notes thus made it possible to draft the headings in concise form while at the same time safeguarding the precision and exactness of interpretation that are essential to avoid doubts and disputes in classification. To distinguish these Section, Chapter or Subheading Notes from the Explanatory Notes, which are not legally binding under the Convention, they are normally referred to as "Legal Notes". Additional Notes (or supplementary Notes) may be included at the national level by an administration for its own national use and are national in scope. They may be binding at the national level only. To complement the legal core, there are Explanatory Notes to the HS published separately by the WCO. While these notes do not form part of the legal provisions of the HS, it is important that they be consulted during the classification process." (Emphasis supplied) Whatever the obligations and expectations from the Member States while implementing HSN has been brought out in Chapter 4 titled 'The Harmonized System and National Customs Tariffs' at page II/27 of the above hand Book: "Contracting Parties to the Harmonized....
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....e pressed into service for interpretation. 67. In short, heading 2106 under Chapter 21 as well as supplementary notes to chapter 21 have been specifically carved out in the Indian Custom Tariff. The relative chapter notes including supplementary notes as well as headings and sub-headings, therefore, will have to be construed differently from HSN, albeit, with the help of general interpretive notes is the requirement of Customs Cooperation Council. Learned Brother has dealt at length and correctly so, to indicate that chapter note 5 of supplementary notes which reads as follows "Heading 2106 (except tariff item 2106 9020 and 2106 9030), interalia, includes: "(a) Protein Concentrates and Textured Protein Substances" which is found that in sub-heading Protein Concentrates and Textured Protein Substances are mentioned as 2106 1000. 68. It is to be noted that the supplementary note 5 specifically provided in Chapter 21 of the Indian Customs Tariff,is not sub-heading note but the supplementary Chapter Note to TH 2106, therefore it seeks enlarge the scope of Tariff heading, specifically. Note3, 4 and 6 of the same Chapter, despite being supplementary notes deal with scope o....
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.... Council which requires minimal disturbances to be done by the Member States so as to maintain the statistical and data collection similarity between Member States. Learned brother is thus correct in pointing out that in view of the special circumstances of Chapter 21 and heading 2106 in Indian Custom Tariff, the inclusion of 'Protein Concentrates and Textured Protein Substances' is clearly specific and that too in tariff heading 2106. The net effect of supplementary note 5 in TH 2106 in Indian Custom Tariff Act is that the heading description 2106 i.e. "Food preparation not elsewhere specified or included" ceases to be a residuary head, in relation to those products which are included in heading 2106, specifically (even if by virtue of any supplementary note). Given above, it is clear that till the product has dominance of Protein Concentrates and Textured Protein Substances (sold as whey protein in the present instance) ,which is undisputed in this case as other similar Whey Protein with different flavours, have been included by the party itself in this head. 70. From the foregoing it is also clear that Chapter 21 of India Custom Tariff Act read with supplementary notes not ha....
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....t has been mentioned that heading 1904 does not cover preparations containing more than 6% by weight of cocoa calculated on a totally defatted basis or completely quoted with chocolate or other food preparation containing cocoa of heading 1806. 82. Above chapter note has been pointed out by way of example that wherever weight percentage other than the pre-dominance is to be considered, the chapter notes have gone on to specifically mention the percentage of weight. Similar is the situation with heading 1901. HS Code Item Description 1901 Malt extract; food preparations of flour, groats, meal starch or malt extract, not containing cocoa or containing < 40% by weight of cocoa calculated on a totally defatted basis. Not elsewhere specified or included; food preparations of goods of headings 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. Even Chapter note 5 to Chapter 71 dealing with alloys of precious metals has specifically given prescription of 2% or more by weight of gold, platinum and even silver to be treated as alloy of gold, platinum and silver resp....
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...., the argument has sidetracked the reality of Indian tariff being different and capable of providing answer through its own existing statutory clauses by way of supplementary notes, as discussed above. 87. While arriving at the above conclusion, support is also drawn from the decision in the matter of Collector of Central Excise vs. Frozen Food P.L. reported in 1992 (59) ELT 279 (Tri.) which was the decision under HSN based Central Excise Tariff (which also had similar head and supplementary notes de-aligned from HSN- though numbered differently) in relation to the additive supplement "surje", following observations are relevant: "42. As for the argument that protein concentrates mentioned in HSN Chapter Note 5(a) of Chapter 21 would refer to protein concentrated from sources other than milk like Soya protein, groundnut, etc., there is no warrant for such a claim. The items which are covered under Chapter IV find specific mention in headings and sub-headings, of that Chapter. We do not find any mention of the expression "protein concentrates" in this Chapter and for this reason alone, protein concentrates would be covered under Chapter 21 by virtue of Note 5(a). ....