TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 1027
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.... erstwhile Central Excise Tariff Act, 1985. After introduction of 8-digit classification Code, the appellant has classified this product under Chapter 04 of Central Excise Tariff Act, 1985 on the ground that the change from 6 to 8 digits will not change the classification. Hence the appellant was clearing Badam Milk as flavoured milk under Chapter sub-heading 0402 9990 of the Central Excise Tariff Act, 1985. The appellant was issued with a show-cause notice dated 17.10.2008 alleging that they had manufactured and cleared "Badam Milk Drink - Ready to Drink" at 'Nil' rate of duty from October 2007 onwards, classifying under Chapter Sub-Heading 0402 9990. In the show-cause notice the Department alleged that this final product is rightly classifiable under Chapter sub-heading 2202 9030 as 'Beverages containing Milk' and that as per the HSN notes to Chapter Heading 2202.90 under the heading 'other', at Sl. No. 4 reads as 'Certain other beverages ready for consumption, such as those with a basis of milk and cocoa' and that Rule 3(a) of the General Rules for the Interpretation of Central Excise Tariff stipulates that the heading, which provides the most specific description shall be prefe....
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.... milk i.e. Badam Milk in this case will not go out of Chapter 4 to get reclassified under Chapter 22. In view of the above the appellant has submitted that the impugned order should be set aside. 3. The learned Advocate has submitted that Badam Milk drink is undisputedly a flavoured milk and the composition and list of ingredients is as below: Component % of component in goods Toned Milk 89% Almond/Badam 1% Sugar, Milk Solids, Cardamom powder, Saffron, and Maltodextrin 10% Total 100% 3.1. He has further submitted that the Department's case is that Chapter 04.02 covers milk added with sweetening matter only and that Badam Milk manufactured by them has not been added with sweetening agents like sugar but on the other hand flavoured with badam powder, cardamom, saffron, Maltodextrin and garnished with badam flakes. Such flavoured products fall under the category of 'beverages' and are rightly classifiable under Chapter 2202 9990. The item cannot be used as a milk perse in view of the addition of flavour added to it and it has to be considered as a beverage and the product is a beverage as there are number of essential flavouring agents added to the milk and it cannot be co....
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....propriate and specific entry. Merely because 8-digit tariff is introduced that by itself does not call for reclassification. 3.2. As per the Food Safety and Standards Act, 2006, Section 2(f) of the Milk and Milk Products Order, 1992 'milk' means "milk of cow, buffalo, sheep, goat, or a mixture thereof either raw or processed in any manner and includes pasteurized, sterilized, recombined, flavoured, acidified, skimmed, toned, double toned, standardized or full cream milk." Hence, 'milk' includes pasteurised, sterilized and flavoured milk. Hence, the product is covered under 'milk' i.e. Chapter 04. Chapter 22 covers Beverages, Spirits and Vinegar. Note 3 of Chapter 22 reads that "for the purpose of heading 2202, the term non-alcoholic beverages mean beverages of an alcoholic strength by volume not exceeding 0.5% volume. This chapter covers predominantly the water-based beverages and milk is not covered under the heading 2202. Sub-heading 2202 9930 covers beverages containing milk. There is a difference between beverages containing milk and the milk itself in some flavour. Since milk itself is a beverage, it cannot say milk containing milk. Therefore, flavoured milk or milk in Badam ....
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....n submissions, wherein he has contended that the product/item 'Badam Milk Drink - Ready to Drink' is rightly classifiable under CTH 2202 9030. He has cited the following case-laws: a. Ernakulam Regional Co-operative Milk Producers Union Ltd. Vs. Commissioner, Cochin (Final Order Nos. 21785 - 21787/2017 dated 24/08/2017) b. Britannia Industries Ltd. - 2022 (56) G.S.T.L. 36 (App. A.A.R.-GST-T.N.) 4.1. Learned AR has also relied on the Notification No. 17/2008-CE (NT), wherein flavoured milk of animal origin has been classified under CETH 2202 9030, while allowing Section 11AC benefit for the period 25.02.2005 to 14.06.2007. Learned AR has also contended that as per the HSN, Chapter Heading 0402 excludes "Beverages consisting of milk flavoured with cocoa or other substances". 5. Heard both parties and perused the records. 6. We find that in this case the issue is regarding classification of the product manufactured by the appellant i.e. "Badam Milk Drink Ready to Drink". The appellant contends that they have been classifying this item under 0401 11 as flavoured milk is covered under this heading prior to the introduction of 8-digit classification code vide Central Excise Tari....
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....ification, the Central Government has exempted the duty for the period mentioned in the notification and in all the three appeals, the period covered is between 28.02.2005 to 16.06.2007. Further we also find that in the case of ERCMPU (MILMA) Vs. CCE, Cochin [2014 (314) ELT 832 (Tri.-Bang.)], the Division Bench of this Tribunal while following the Notification No. 17/2008-CE has held that flavoured milk of animal origin is entitled to benefit of Notification dt. 27.03.2008. By following the ratio of above decision, we hold that there is no infirmity in the impugned order classifying the flavoured milk of animal origin under tariff item 2202 9030 of Central Excise Tariff but the appellants are not required to pay duty in view of the said notification. Accordingly, we dispose of all the three appeals by giving the benefit of notification to the appellant." 8. We find that with the introduction of 8-digit Classification Code, there is a specific entry for beverages containing milk, which was not there in the earlier Central Excise Tariff. Further Tarriff item 0401.11 "flavoured milk whether sweetened or not put up in unit containers ordinarily is not anymore present under Chapter 04....