2005 (6) TMI 361 - AT - Central Excise

Summary

Issues: Classification of edible food preparation under CETA 85 and exemption eligibility under Notification 6/2000.

Classification Issue:
The appellants were engaged in manufacturing edible food preparation termed "Brown & Polson/Skippy Jelly Bites." The lower authorities classified the goods under heading 21/8/99 of CETA 85 but denied exemption under Sl. No. 8 of Notification 6/2000. The contention was that the product did not fall under the category of sweetmeats or similar edible preparations for consumption. The earlier order dated 26-12-2000 raised questions on whether the goods could be considered sweetmeats and similar edible preparations. The tribunal analyzed the meaning of "sweetmeat" and concluded that the product, with 75% water and 23% sugar, did not qualify as sweetmeats. The tribunal further examined the specific entry under Sl. No. 8 of the notification, distinguishing between sweetmeats like "misthans or mithai" and similar edible preparations. It found that the product did not align with either category, leading to the denial of exemption.

Exemption Eligibility Issue:
Upon hearing both sides, the tribunal determined that the term "sweetmeat" in the notification was a generic term encompassing various edible preparations falling under heading 2108.99. It clarified that edible preparations with 23% sugar in ready-to-consume form would be considered sweetmeats. The tribunal criticized the lower authorities for narrowly interpreting the term "sweetmeat" based on traditional sales outlets like sweetmeat shops, emphasizing that modern retail practices did not alter the essence of sweetmeats. Additionally, the tribunal expanded the interpretation of "similar edible preparation" to include all sugar-based, ready-to-consume products not elsewhere specified. It noted the removal of a previous restriction on factory-made sweetmeats in the predecessor notification, indicating broader exemption coverage. Ultimately, the tribunal ruled in favor of the appellants, granting eligibility under Sl. No. 8 of Notification 6/2000 and confirming the classification under 2108.99, setting aside the earlier order and allowing the appeal.

This detailed analysis highlights the tribunal's thorough examination of the classification and exemption issues, emphasizing the interpretation of key terms and criteria under the relevant notification.