2012 (3) TMI 308 - AAR - Central Excise

Classification of the fermented milk product and non-fermented milk based beverage under the Central Excise Tariff Act,1985 - Claming exemption under Notification No. 01/2011-CE dated 01/03/2011 - applicant is engaged in trading of dairy products set up a manufacturing unit in which they propose to manufacture a fermented milk product and non-fermented milk based beverage - The applicant has expressed the view that the product Yum Creamy will be classifiable under heading 04039090 of CETA and the product Yum Chusky would get classified under heading 22029030 of the CETA and will also be eligible for the exemption under notification No. 1/2011 CE dated 01/03/2011 as it satisfies the description flavoured milk of animal origin mentioned in the said notification - Held that - The products Yum Creamy and Yum Chusky shall be classifiable under headings 04039090 and 22029030 respectively of the Central Excise Tariff Act, 1985; - The product Yum Chusky will be eligible for exemption under the Notification No. 01/2011 CE dated 01/03/2011, subject to the applicant fulfilling the conditions prescribed in the said Notification.

Summary

Issues: Classification of "Yum Creamy" and "Yum Chusky" under CETA, eligibility of "Yum Chusky" for exemption under Notification No. 01/2011-CE dated 01/03/2011

The Authority for Advance Rulings considered an application regarding the classification of two products, "Yum Creamy" and "Yum Chusky," under the Central Excise Tariff Act, 1985 (CETA), and the eligibility of "Yum Chusky" for exemption under Notification No. 01/2011-CE dated 01/03/2011. The applicant, a subsidiary of an Indian company, sought a ruling on the classification of these products. The products were described in detail, including their compositions and manufacturing processes. "Yum Creamy" was a fermented milk product, while "Yum Chusky" was a non-fermented milk-based beverage. The applicant argued for the classification of "Yum Creamy" under heading 04039090 of CETA and "Yum Chusky" under heading 22029030, with the latter also being eligible for the exemption under the mentioned notification.

The Authority analyzed the compositions and manufacturing processes of both products. "Yum Creamy," containing cow's milk, sugar, flavor, vitamins, wheat flour, and rice flour, was correctly classified under heading 04039090 of CETA due to permissible additives mentioned in the relevant HSN Notes. On the other hand, "Yum Chusky," a milk-based beverage without fermentation, was classified under heading 22029030 as it fell under beverages based on milk flavored with cocoa or other substances. The Authority also confirmed the eligibility of "Yum Chusky" for exemption under Notification No. 01/2011-CE dated 01/03/2011, as it met the criteria of being a flavored milk of animal origin.

The Commissioner of Central Excise, Rohtak, agreed with the proposed classifications and exemption eligibility, subject to the applicant fulfilling the prescribed conditions. It was emphasized that any change in the composition of the products could alter their classification. The Authority ruled that "Yum Creamy" and "Yum Chusky" would be classified under the specified headings in CETA and that "Yum Chusky" would be eligible for the exemption under the mentioned notification, provided the applicant adhered to the conditions. The ruling highlighted the importance of maintaining the accuracy of product compositions to avoid classification errors in the future.