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Issues: Classification of unblended unflavoured cocoa powder for levy of additional customs duties.
In this judgment by the Appellate Tribunal CEGAT, Mumbai, the main issue was the classification of unblended unflavoured cocoa powder imported by the appellant for the purpose of levying additional customs duties. The Commissioner (Appeals) had confirmed the finding of the Additional Commissioner that these goods fell under heading 18.02 of the Central Excise Tariff, and the duty applicable under this heading should be levied for additional customs duties. The appellant argued that cocoa powder under this heading must be a blend of different kinds of cocoa powder or unblended cocoa powder with added flavoring, citing a judgment by the Bombay High Court and a Tribunal bench. The High Court judgment considered the liability to classification of unblended unflavoured cocoa powder under a different tariff item and accepted the argument that unflavoured cocoa powder is not directly consumed but needs to be flavored and blended before consumption. However, the current case was under the Central Excise Tariff based on the Harmonised System of Nomenclature, specifically heading 18.05, which covers cocoa powder obtained by pulverising partly defatted cocoa paste. The Tribunal found that the imported cocoa powder was obtained in this manner and should be classified under this heading, rejecting the argument that unblended cocoa powder is not traded as such in the market. The Tribunal dismissed the appeal, upholding the classification under heading 18.05 for the levy of additional customs duties.
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