2011 (2) TMI 571 - AT - Central Excise

Classification - commercial parlance test - dispute in this case is about the classification of the two products viz. Milkana Dairy Whitener and Milkana Dairy Powder Light & Sweet - The contention of the appellant is that these products used as dairy whiteners have name, character and uses distinct from the milk powder, other than powder specially prepared for feeding infant , covered by heading No. 0401.13 - It has been pleaded that for deciding the classification of the goods in question, the commercial parlance test must be applied and since in common parlance, the goods, in question, are considered as different from the milk powder, the same would not be covered by Heading No. 0401.13 of the Tariff - Appeal is dismissed

Summary

Issues:
Classification of "Milkana Dairy Whitener" and "Milkana Dairy Powder Light & Sweet" under Central Excise Tariff sub-headings 0401.19 and 0401.13, respectively.

Detailed Analysis:
The dispute revolves around the classification of the products "Milkana Dairy Whitener" and "Milkana Dairy Powder Light & Sweet" under the Central Excise Tariff. The appellant classified these products under sub-heading 0401.19 and cleared them at nil rate of duty, while the Department contended they should be classified under sub-heading 0401.13 and attract an 8% duty rate. The Department issued a show cause notice for duty recovery and penalty, which was confirmed by the Dy. Commissioner and upheld by the Commissioner (Appeals).

On appeal, the appellant argued that the products are distinct from skimmed milk powder covered by sub-heading 0401.13 as they contain sugar and are used as dairy whiteners. They presented affidavits to support their claim, emphasizing the commercial distinction between the products. The Department, however, relied on precedents and contended that the products fall under sub-heading 0401.13, covering all types of milk powder, including partially skimmed.

The Tribunal analyzed the Central Excise Tariff headings and sub-headings relevant to milk products. It noted that sub-heading 0401.13 covers milk powder other than that prepared for feeding infants, encompassing whole, skimmed, and partially skimmed milk powder. The Tribunal referenced a previous judgment and the Supreme Court's decision to support the classification of the products under sub-heading 0401.13.

The Tribunal rejected the appellant's argument for applying a commercial parlance test, stating that when sub-headings are clear and unambiguous, commercial interpretation is unnecessary. As sub-heading 0401.13 does not qualify "milk powder" with any adjective, it covers all types of milk powder, regardless of sweetness or intended use. Therefore, the Tribunal upheld the classification under sub-heading 0401.13 and dismissed the appeal.

In conclusion, the Tribunal found no fault in the impugned order, affirming the classification of "Milkana Dairy Whitener" and "Milkana Dairy Powder Light & Sweet" under sub-heading 0401.13 of the Central Excise Tariff, subject to an 8% duty rate. The appeal was consequently dismissed.