2004 (7) TMI 469 - AT - Central Excise

Summary

Issues:
Classification of "Nestle Everyday Whitener", "T Mate Dairy Whitener", and "Dairy Powder 5-P" under sub-heading 0401.19 or 0401.13 of the Central Excise Tariff Act.

Analysis:
1. Appellant's Argument:
- The appellant argued that the classification of the products under sub-heading 0401.13 by the Commissioner (Appeals) was incorrect. They contended that Note 1 to Chapter 4 of the Tariff, equating milk to full cream or skimmed milk, does not apply to milk powder varieties.
- They emphasized that sub-heading 0401.13 covers only whole milk powder, not skimmed milk powder, and that partially skimmed milk powder falls under Heading 0401.19.
- Reference was made to standards and rules showing the distinct identities of whole milk powder, skimmed milk powder, and partially skimmed milk powder. The judgment of the Punjab & Haryana High Court was cited to support the classification of Nestle Daily Whitener as partially skimmed milk under sub-heading 0401.19.

2. Revenue's Argument:
- The Revenue argued that milk powder falls under sub-heading 0401.13 and covers all types of milk powder, including whole, partly skimmed, and skimmed milk powder.
- They referenced a Tribunal case where it was held that sub-heading 0401.13 encompasses all varieties of milk powder. The change in the Tariff description was highlighted to counter the appellant's reliance on the Food Specialities Ltd. judgment.

3. Judgment:
- The Tribunal referred to previous cases and standards to determine that sub-heading 0401.13 includes all types of milk powder: whole, partly skimmed, and skimmed. The judgment emphasized that milk powder can be of different types based on fat content.
- It was concluded that the appellant's sweetened partially skimmed milk powder falls under sub-heading 0401.13 of the Central Excise Tariff Act.
- The Tribunal agreed with the appellant regarding the treatment of price as cum-duty and allowing statutory deductions. Modvat credit eligibility was confirmed, and penalties were set aside due to the filing of the correct classification declaration.

This comprehensive analysis clarifies the classification issue of the mentioned products under the Central Excise Tariff Act, providing detailed arguments from both parties and the Tribunal's final judgment based on legal precedents and standards.