2002 (11) TMI 598 - AT - Central Excise

Summary

Issues: Classification of concentrated milk for central excise duty based on container packing; Dispute regarding classification and rate of duty for sweetened condensed milk packed in barrels; Resistance to revision of classification on grounds of merit and limitation.

The judgment by the Appellate Tribunal CEGAT, New Delhi dealt with the classification of concentrated milk for central excise duty based on container packing. The Tribunal highlighted that if goods are "put up in unit containers and ordinarily intended for sale," they are classified under Chapter sub-heading 0401.14; otherwise, under sub-heading 0401.19. The case involved M/s. Nestle (India) Ltd., manufacturing sweetened condensed milk, some packed in unit containers of 400 gms and others in barrels. The dispute arose over the classification and duty rate for sweetened condensed milk in barrels. The Commissioner of Central Excise, Chandigarh classified it under sub-heading 0401.14, leading to a differential duty demand and penalty imposition.

Regarding the resistance to the revision of classification, the appellants argued that packing in barrels did not constitute putting up in unit containers. They contended that since barrels contained varying quantities of milk, sold based on actual quantity, they did not meet the criteria of being put up in unit containers and ordinarily intended for sale. The appellants cited precedents and their own case history to support their claim that sales in barrels should not be classified as such. They also disputed the charge of suppression of facts for duty evasion, citing long-standing approval of the classification by departmental authorities.

On the issue of limitation, the appellants maintained that since the classification under sub-heading 0401.19 for goods packed in barrels was known and approved up to the Tribunal, there was no suppression of facts to evade duty. The Revenue's counsel, however, argued that the barrels were unit containers designed to hold a standard quantity, disregarding variations in actual content. The counsel contended that billing based on actual quantity did not change the unit container status, as each barrel was treated as a unit for sale purposes. The Tribunal, referencing past decisions, emphasized that for goods to be considered put up in unit containers and ordinarily intended for sale, the transaction must be based on unit or standard weight/quantity in each container, facilitating easy sale without individual weighing.

Ultimately, the Tribunal ruled in favor of the appellants, overturning the impugned order and allowing the appeals with consequential relief. The Tribunal held that the sweetened condensed milk packed in barrels did not meet the criteria of being put up in unit containers and ordinarily intended for sale, as the sale was based on actual weight, not a standard unit quantity. The decision was supported by past precedents and the absence of any change in practice or law since the previous ruling in the appellants' case.