2009 (2) TMI 109 - AT - Central Excise

Dairy products - Whether for a product to be classifiable under Chapter Heading 0404 of the Central Excise Tariff as it existed prior to 31-3-2005, addition of vitamins was permissible under Note 4 and mere addition of vitamins would not take the product out of Chapter 4 - during the relevant period Chapter Note 4 of Chapter 4 consciously left out the vitamins as one of the permissible ingredients while deciding the classification of a product under said Chapter No. 4 held that prior to 31-3-2005 on addition of vitamins, product is not classifiable under Chapter 4

Summary

Issues:
Classification of a product under Chapter Heading 0404 of the Central Excise Tariff prior to 31-3-2005 based on the addition of vitamins.

Analysis:
1. Submission by Company's Counsel:
- The company's counsel argued that the product was correctly classified under Chapter Heading No. 04.04 and that the decision in the case of Frozen Foods Pvt. Ltd. did not consider the HSN explanatory notes. The counsel emphasized the reliance on HSN explanatory notes for correct classification, citing relevant case laws.

2. Submission by Revenue's Consultant:
- The revenue's consultant contended that the apex court upheld the decision in the Frozen Foods Pvt. Ltd. case, making it the law of the land. It was argued that the Central Excise Tariff did not allow for the addition of vitamins, deviating consciously from the HSN.

3. Issue of Addition of Vitamins:
- The main issue was whether the addition of vitamins was permissible under Note 4 and if such addition would change the classification of the product under Chapter 4 of the Central Excise Tariff Act, 1985. The relevant Chapter Heading and Note were analyzed to determine the scope of classification.

4. Explanatory Notes and Classification:
- The general explanatory notes to Chapter 04 were examined to understand the inclusion of vitamins in products classified under Chapter 4. The tribunal noted that during the relevant period, Chapter 4 of the Central Excise Tariff Act, 1985, and HSN Chapter 4 were not completely aligned.

5. Alignment with HSN and Tariff:
- The tribunal considered the alignment of the Central Excise Tariff Act, 1985, with the HSN and emphasized that the Tariff was based on the HSN to address classification disputes. The conscious exclusion of 'vitamins' as a permissible ingredient in Chapter Note 4 was highlighted.

6. Decision and Precedents:
- The tribunal referred to the Frozen Foods Pvt. Ltd. case where it was held that the addition of vitamins would change the classification of the product under Chapter 4. The apex court upheld this decision, making it binding. The tribunal noted that subsequent cases did not address this upheld decision.

7. Final Ruling:
- The tribunal concluded that prior to 31-3-2005, the addition of vitamins in a product would take it out of the purview of Chapter 04 of the Central Excise Tariff. This ruling was based on the settled issue by the apex court and the interpretation of relevant tariff provisions.

This detailed analysis of the judgment provides insights into the classification of products under the Central Excise Tariff Act, 1985, based on the addition of specific ingredients like vitamins, and the reliance on HSN explanatory notes for classification purposes.