2016 (10) TMI 1069 - AT - Central Excise

Classification of goods - whether diary whitener is classifiable under chapter heading 0401.13 or under chapter heading 0401.19 of the Central Excise Tariff? - benefit of N/N. 04/90 dated 20.3.1990 - Held that - the chapter heading 0401.13 covers milk powder and skimmed powder specially prepared for feeding infant - Admittedly, the product involved is dairy whitener which constituents partially skimmed milk, therefore, the milk powder may be in any form i.e. full skimmed or partially skimmed powder. Therefore, the classification of the goods in question classifiable under chapter heading 0401.13 of CETA, 1985. Whether the appellant is entitled for the benefit of Notification No.04/90 dated 20.3.1990 or not? - Held that - N/N. 4/90-CE dated 30.3.1990 was superseded by N/N. 16/91-CE dated 25.7.1991, which exempted all goods under Tariff Sub Heading 0401.13. However, N/N. 16/91-CE was rescinded by N/N. 64/94-CE dt.1.3.1994. Therefore, the appellant is not entitled for the benefit of notification for the period 2.6.1998 to 17.7.1998. Appeal dismissed - decided against appellant.

Summary

Issues:
Classification of dairy whitener under Central Excise Tariff Act, 1985 and eligibility for Notification No.04/90 dated 20.3.1990.

Issue 1: Classification of dairy whitener
The appellants contended that dairy whitener should not be classified under Chapter Heading 0401.13 as it covers milk and cream concentrated for containing added sugar or other substances, which does not apply to their product. They argued that even if classified under 0401.13, it would still be eligible for the benefit under Notification No.4/90-CE. They cited the decision of the Hon'ble Punjab & Haryana High Court in Food Specialities Ltd. Vs. Union of India, upheld by the Supreme Court, to support their claim that their product is classifiable under 0410.19. The Revenue, however, relied on a Tribunal decision in Mehsana Dist. Co-OP. Milk Producers' Union Ltd. Vs. CCE, Ahmedabad. After considering the submissions, the Tribunal held that dairy whitener, containing partially skimmed milk, falls under Chapter Heading 0401.13, covering milk powder, and thus classified as such under the Central Excise Tariff Act, 1985.

Issue 2: Eligibility for Notification No.04/90 dated 20.3.1990
The second issue revolved around whether the appellants were entitled to the benefit of Notification No.04/90 dated 20.3.1990. The Tribunal referred to the case of Food Specialties Limited Vs. Union of India, where it was established that partially skimmed milk powder, such as dairy whitener, is separately marketed and qualifies for the benefit under the said notification. Citing further precedents like Nestle India Limited Vs. CCE, Chandigarh-II, the Tribunal concluded that dairy whitener falls under the category of partially skimmed milk powder and thus qualifies for the benefit under Notification No.04/90 dated 20.3.1990. Consequently, demands for certain periods were set aside. However, due to the supersession of Notification No.4/90-CE by subsequent notifications, the appellants were not entitled to the benefit for a specific period, resulting in a confirmed demand.

In conclusion, the Appellate Tribunal CESTAT Chandigarh, through a detailed analysis, resolved the issues of classification of dairy whitener and its eligibility for Notification No.04/90 dated 20.3.1990. The judgment provided a thorough examination of legal precedents and relevant provisions to arrive at a decision that impacted the demands raised against the appellants for specific periods.