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2017 (4) TMI 26 - AT - Central ExciseClassification of Kulfi manufactured by appellant - whether classified under Chapter Heading 0404.00 or under C.H. 2105 as ice cream - whether the product is eligible for SSI exemption? - Held that - On perusal of the records we note that the C.H. 0404 of the Central Excise Act is applicable in the case in hand as it is undisputed that the Kulfi is milk product and the manufacturing process of kulfi are explained by the appellant before the lower authorities is also not disputed - the Tribunal was considering similar issue in the case of Nestle (I) Ltd. 2001 (3) TMI 157 - CEGAT, COURT NO. IV, NEW DELHI wherein the Tribunal was considering the classification of Nestle Milkmaid Kesar Kulfi Mix, Nestle Milkmaid whether falls under Chapter Heading 0404 or Chapter sub-heading 2108.90 after considering the entire gamut and also the ingredients in the product Nestle Milkmaid and Kulfi mix, Bench after considering the Explanatory note to HSN held that Nestle Milkmaid and Kulfi would fall under Ch. 04.04. If the Kulfi Mix which is a dry powder merits classification under CTH 0404, then Kulfi manufactured by appellant which is ready to consume would definitely merit classification under 0404. Appeal allowed - decided in favor of assessee.
Issues: Classification of "Kulfi" under Chapter Heading 0404.00 or 2105.00 of Central Excise Tariff Act, 1985 during 2003-04 and eligibility for small scale industries exemption Notification.
Analysis: The appeal was against Order-in-Appeal No. BR(2859)241/MI/2005, dated 5-8-2005, regarding the classification of "Kulfi" manufactured by the appellant. The appellant argued that "Kulfi" falls under Chapter Heading 0404.00, while the Revenue contended that it should be classified under Chapter Heading No. 2105.00. Both lower authorities classified it under C.H. 2105 as "ice cream," making it ineligible for small scale industries exemption Notification. Upon reviewing the submissions and relevant Tariff Heads, the Tribunal considered whether "Kulfi" should be classified as "ice cream" under C.H. 2105. The appellant claimed "Kulfi" is a milk product heated, reduced, flavored, and frozen, falling under C.H. 0404. The Tribunal referenced the case of Nestle (I) Ltd., where Nestle Milkmaid Kesar Kulfi Mix was classified under Ch. 04.04. Considering the ingredients and processes, the Tribunal concluded that if Kulfi Mix under CTH 0404, then ready-to-consume "Kulfi" by the appellant should also be classified under 0404. Referring to the HSN, the Tribunal noted that dairy products under Chapter 4 include various milk derivatives with additives like sugar, flavorings, nuts, and fruits. Starch content up to 5% does not alter classification under Heading 04.04. The Tribunal found that the impugned order was unsustainable and set it aside, holding that the classification of "Kulfi" under Chapter Heading 0404.00 was appropriate. Consequently, the appeal was allowed with any consequential relief. In conclusion, the Tribunal's detailed analysis considered the nature of "Kulfi," relevant Tariff Heads, ingredients, and precedents to determine its classification under the Central Excise Tariff Act, 1985. The decision clarified that "Kulfi" manufactured by the appellant falls under Chapter Heading 0404.00, emphasizing the importance of accurate classification for duty rates and exemption eligibility.
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