TaxTMI 
TaxTMI 
2025 (10) TMI 1190
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....e merits of the Appeals and in the light of the facts admitted by both the parties, we note that the two earlier appeals of the same Appellant came before us [in Appeal Nos. E/42531/2013 and E/40005/2015] for classification of the same goods [except for the addition of certain flavors]; the Department had classified the subject goods under CETSH 1904 1090 as against the claim of the Appellant under CETH 2106. The same was disposed of vide Final Order Nos. 40928--40929/2024 dated 23.07.2024 thereby allowing the said Appeals of the Appellant by setting aside both the orders impugned therein. It was held that the Revenue did not discharge the initial burden cast on it, in justifying its proposed re--classification and hence, we find that the classification for identical goods under Central Excise Tariff Heading 2106 under which the Appellant claimed to be assessing and clearing the goods since 2006 by availing the SSI exemption and paying the duty on the concessional duty under Notification No.1/2011--CE stood approved. It is a matter of record that the same was accepted by the Department by passing the subsequent orders thereby dropping the proceedings wherein it was proposed similar....
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....equent demand of differential duty and imposition of the penalty under Rule 25 of the Central Excise Rules, read with Section 11AC of the Central Excise Act, by issue of a Show Cause Notice No.19/2016 dated 31.05.2016 to confirm the said proposal verbatim except for dropping the proposal to classify the "Satto" and "Badam Mix" and the consequent demand for differential duty. 4.3 Ld. Advocate further submitted that the other Appeal No. E/40806/2021 is against Order--in--Original No. 12/2021 dated 22.03.2021 covering the period from May 2016 to June 2017 initiated vide a Statement of Demand (SOD) No. 24/2018 dated 28.05.2018 placing reliance on the earlier notice dated 31.05.2016 but restricting the proposal only to the revision of the classification of the food Products like 'Health Mix, Diabetic Mix Banana Rich, Dates Rich, Honey Rich, Ragi Rich, Ragi Malt, Rice Rich and Diabetic Atta under CETSH 1901 9090 and for the consequent demand for differential duty with attendant penalty under Rule 25 of the Central Excise Rules read with Section 11AC of the Central Excise Act. The Advocate specifically brought to our notice that the issue involved as described in the SOD only recorded ....
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....inous vegetable [1106], it was referred to the Explanatory Notes to 1901 wherein it is indicated that this heading covers a number of food preparations with a basis of flour or meal, of starch or of malt extract, which derive their essential character from such materials whether or not these ingredients predominates by weight or volume; Other substances may be added to these main ingredients such as milk, sugar, eggs, casein, albumin, fat, oil, flavouring, gluten, colouring, vitamins, fruit or other substances to improve their dietetic value or cocoa powder. The preparation of this heading may be liquid or in the form of powders or granules, doughs or other solid forms such as strips or discs; These preparations are often used for making beverages, gruels, infant foods, dietetic foods, etc., by simply mixing with, or boiling in, milk or water, or making cakes, puddings custards or similar culinary preparations. 4.6 The SCN thus proposed that Notification No.1/2011--CE did not cover the products classified under sub--heading 1901 9090, the rate of duty applicable on such products is 12% Advalorem plus Education Cess and Secondary Education Cess upto February 2015 and 12.5% therea....
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....ith in the said Interpretative Rules. 4.9 In support his above argument, reliance was placed on the Explanatory Notes to Heading 1901 under Heading (II) viz., "Apart from the preparations excluded by the General Explanatory Note to this chapter; the heading also excludes .... [b] mixed cereal flour [1101 or 1102], mixed flours and meals of leguminous vegetables and mixed fruit flours, meals or powders [heading 1106] not otherwise prepared". 4.10 Ld. Advocate further relied upon the observation of the Delhi Bench of the Tribunal in the case of Punit Daver Vs. Commissioner of C. Ex Cus & Service Tax, Ujjain [2019 (368) E L T 747 (Tri. --Del)] wherein, at para 10 it has been observed that in terms of the HSN Notes to Chapter Heading 1901 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. 4.11 Reliance was placed on an order of this Bench in the case of Ameya Foods Versus Commissioner of CGST & Central Excise Coimbatore [Final Order Nos.40669--40677/2023 d....
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....he said case, Hon'ble Court had to decide whether "rice spice" which is a is a combination of raw rice, dehydrated vegetables and certain spices and condiments mixed in a pre-determined proportion and that blended together in a mixer for uniformity, would fall under Chapter Heading 11.01 (i.e. product of milling industry) or under Chapter Heading 21.08 (i.e. food preparation not elsewhere specified). The Hon'ble Court held that that the activity of packing raw rice with dehydrated vegetables and spices does not amount to manufacture. The process undertaken in the said case has been described in para 2 of the said judgment which reads as under: "This product, i.e. Rice Spice, is a combination of raw rice, "This product, i.e. Rice Spice, is a combination of raw rice, dehydrated vegetables and certain spices dehydrated vegetables and certain spices and condiments mixed and condiments mixed in a prein a pre--etermined proportion and that blended together in a determined proportion and that blended together in a mixer for uniformity and the blended mixture is heated, if mixer for uniformity and the blended mixture is heated, if required, to sterilize the product. The mixed prod....
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....facts of the present case, for the reasons stated above, the savoury oats and silk oats are nothing but plain rolled oats mixed with certain ingredients are thus classifiable under Chapter Heading 11.04, which specifically covers "Rolled or Flaked Grains of Oats", and not under Chapter Heading 19.04, which is a general description covering prepared foods obtained from unroasted cereal flakes or from mixtures of unroasted cereal flakes and roasted cereal flakes or swelled cereals. 5.27 Without prejudice to the above, it is submitted that assuming that both Chapter Heading 11.04 and 19.04 are equally specific with reference to savoury oats, then the classification shall be as per Rule 3(b) which provides that mixtures and composite foods consisting of different materials will be classified as if they consisted of the material or component which gives them their essential character.......". The above decision rendered by the co--ordinate Bench has also been approved by the Hon'ble Supreme Court [(2024) 15 Centax 476 (S.C.)] which squarely covers to the case of the Appellant and against the Revenue for classifying the goods under CETSH 1901 9090. 4.12 Ld. Advocate furthe....
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....pulses & cereals and HSN code 1106 includes the flour, meal and powder made from peas, beans lentils [dried leguminous vegetables falling under 0713] and such flour improved by the addition of very small amount of additives continues to be classified under HSN code 1106 and accordingly claimed that the mixture of ground cereals should, in fact, be classified under HSN code 1106. 4.14 Sri Vishwanathan, ld. Advocate further referring to para Nos.4 & 5 of Circular No. 205/39/1996--CX dated 30.04.1996 submitted that once the character of the product prima facie appears to be 'food preparations' which are capable of human consumption by simply mixing and boiling/cooking in water, the same should be classified under Chapter 2108 [now CH 2106] as 'miscellaneous edible preparations'. 4.15 The ld. Advocate also drew our attention to Sl.No. 7 of Notification No.5/1998--CE dated 02.06.1998 specifying preparations in the nature of instant food mixes for consumption after processing [such as cooking dissolving or boiling in water, milk etc.,] classifying the goods under CETH 2108, Sl. No.6 of Notification No.05/99 CE dated 28.02.1999 carrying the same entry, Sl.Nos.28 and 30 of Notificati....
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....ant's own case (supra). 5. Per contra, Smt. Reena, ld. Departmental Representative referring to paras 3 and 4 of the show cause notice, contended that the present proceedings have arisen consequent to the Department itself finding that the earlier classification for identical goods proposed under CETH 1904 was not found appropriate on account of which only, the earlier Appeals of the Appellant came to be allowed by this Tribunal vide its Final Order Nos. 40928--40929/2024 dated 23.07.2024. She further argued that though the products under dispute are identical except for addition of different flavors to the mixed cereals predominantly containing 'Ragi' as its principal constituent, the process adopted for production of these goods is same, i.e., various grains/cereals are first roasted to 150 degrees Celsius in a sand roaster machine of 1 ton per hour capacity and then are destoned by a destoning machine after which, it is manually checked and cleaned further and blended in a blending machine to be later powdered, sieved and blended in the grinder machine. After these processes, a small quantity of powdered cardamom, banana or dates, as the case may be, are added to the respecti....
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....t the impugned products are only 'conventional food' presented as wholesome nutrition and not 'food supplements' formulated for any particular dietary requirement supported by the HSN Notes on Heading 2106 namely that Similar preparations, however intended for prevention or treatment of diseases or ailments are excluded [Heading 3003 or 3004]; the impugned products of the Appellant would not qualify as 'food supplement' and hence, cannot be brought under Heading 2106. She also relied on findings in the impugned orders and contended that the case of the Revenue is fully covered by the HSN Notes relied upon in the impugned orders and therefore, there is no merit in the arguments advanced on behalf of the Appellant and accordingly, requested for dismissal of the Appeals by upholding the impugned orders. 8. We have heard the rival contentions and considered the documents made available before us, in the context of the relevant provisions of law. We find that both sides agreed that the classification dispute involved in respect of the goods involved in these appeals are identical to the one decided in our Final Order Nos.40928--40929/2024 dated 23.07.2024 except for the addition of t....
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....lour with starch or malt extract obtained from floor base with the preparation having the essential character of starch or malt extract, irrespective of its weight or volume and the mere contention that the goods are 'mixed cereals' and therefore it is 'preparation' covered under Heading 1901, is devoid of any merits. This assumption of the Revenue does not hold water as the same lacks any support in the form of evidence and hence, not acceptable. 10. Further, the fact that the HSN Notes on Heading 1901 itself holds mixed cereals to be outside the purview of the said classification further does not support the Revenue's attempt for reclassification as proposed and sustained by the in the impugned orders. In this contest, we find that the observations of the Delhi bench in the case of Punit Daver Versus Commissioner of C. Ex Cus & Service Tax, Ujjain [supra] stands against the above proposal of Revenue. [referred at para 4.10 supra] 11. This apart, the classification of any mixture of any goods covered by the Schedule to the Central Excise Tariff are to be decided in terms of the Interpretative Rules also does not support the contention of the Revenue that the 'mixture of cere....