2012 (4) TMI 67 - AT - Customs

Classification of goods being natural sea water used for curbing deficiency of mineral in the body Commissioner(Appeals) classified it under heading 2501 Revenue contending heading 2106 covering food preparations Held that - Once we are satisfied that the goods have not undergone any preparation and nothing contradictory evidence is brought by revenue to discard the observation of first appellate authority. Classification under heading 2501 is upheld Decided against the Revenue.

Summary

Issues: Classification of goods under tariff items 2106 and 2501

In this judgment by the Appellate Tribunal CESTAT, New Delhi, the issue at hand was the correct classification of goods under tariff items 2106 and 2501. The first appellate authority initially classified the goods under heading 2501, pertaining to salt and sodium chloride, based on their intended use. The respondent argued that the goods were mineral drops meant for human consumption to address mineral deficiencies, and therefore should be classified under tariff item 2106 for food preparations. The tribunal examined the nature of the goods and the evidence presented by both sides to determine the appropriate classification.

The learned DR for the revenue highlighted that the manufacturer's website described the goods as food supplements, supporting the argument for classification under tariff item 2106. However, the tribunal found that the goods, being natural sea water used without any further preparation, did not qualify as a food preparation under tariff item 2106. The absence of concrete evidence or test reports provided by the revenue to prove otherwise led the tribunal to uphold the classification under heading 2501 for salt and sodium chloride, as per the first appellate authority's decision.

During the proceedings, the tribunal also considered the edibility and suitability of the goods for human consumption. Despite the revenue's concerns about the extended custody of the goods, the tribunal found no grounds to dispute their classification under heading 2501. The tribunal noted that the first appellate authority had correctly analyzed the HSN note of heading 2501, and there was no contradictory evidence presented by the revenue to challenge this analysis. Ultimately, the tribunal dismissed the revenue's appeal, affirming the classification of the goods under tariff item 2501 as salt and sodium chloride, given their natural state and purpose for human consumption to address mineral deficiencies.