2011 (2) TMI 436 - AT - Customs

Classification - The adjudicating authority was of the view that the goods imported by the appellant could be appropriately considered as Sweet Biscuits , defined under HSN Explanatory Notes to Heading 1905 - It is submitted, that as per the relevant entry under the Prevention of Food Adulteration Rules, 1955, biscuits shall be made from maida, vanaspati or refined edible oil or table butter or deshi butter or margarine or ghee or their mixture - The literature produced by the counsel today also indicates that biscuits are manufactured by using flour rather than whole grain cereals - appellant has been able to establish a good case for classification of the item under SH 1905 90 90, the ultimate residuary entry under Heading 1905 - HSN Explanatory Notes themselves have played a decisive role in the present classification dispute, it is not necessary to press into service anything contained in the PFA or the Rules made thereunder - Appeal is allowed

Summary

Issues:
Classification dispute regarding the imported commodity declared as "GRAN BAR OATS" in the Bill of Entry dated 8-12-2005, with the Revenue seeking classification under SH 1905 31 00 while the appellant classified it under SH 1905 90 90. The dispute arose from the Assistant Commissioner of Customs classifying the goods under SH 1905 31 00, leading to an appeal against the appellate Commissioner's order.

Analysis:
The classification issue revolves around whether the imported commodity can be considered "sweet biscuits" under the HSN Explanatory Notes to Heading 1905. The appellant argued that the product, based on whole grain oats rolled with added ingredients like sugar and fat, does not meet the criteria for "sweet biscuits" as it lacks a base of flour, sugar, or other sweetening matter constituting at least 50% of the product by weight. The appellant presented evidence indicating that the product is not marketed as biscuits in India, as per the Prevention of Food Adulteration Act, and referenced literature emphasizing the use of flour in biscuit manufacturing. The appellant successfully argued that the product should be classified under SH 1905 90 90, a residuary entry, rather than under SH 1905 31 00 dedicated to "sweet biscuits."

The Tribunal rejected the Revenue's classification proposal under SH 1905 31 00, holding that the imported commodity, not meeting the criteria for "sweet biscuits," should be classified under SH 1905 90 90. The Tribunal emphasized that the product, based on whole grain oats and other ingredients, does not qualify as "fine bakers' ware" with a base of flour, sugar, and fat as required for "sweet biscuits." The Tribunal found the appellant's argument supported by the literature on biscuit manufacturing and the visible presence of whole grain oats in the product samples. The Tribunal also dismissed the relevance of the Prevention of Food Adulteration Rules in this classification dispute, as the HSN Explanatory Notes played a decisive role.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant and granting consequential relief. The judgment clarifies the classification of the imported commodity based on the criteria for "sweet biscuits" and the use of whole grain oats in the manufacturing process, highlighting the importance of accurate classification in customs matters.