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2017 (5) TMI 452 - AT - Central ExciseClassification of goods - NIDO Nutritious Milk for growing kids - the Department contended that the product merits classification under the Tariff Item 1901 90 90 of the Central Excise Tariff Act, 1985 on the ground that addition of flavour is not permitted in the products of Tariff Heading 0404 - whether the product is classified under Tariff Item 0404 90 00 or Tariff Item 1901 90 90 of the Central Excise Tariff Act, 1985 - Held that - an identical issue has come up before this Tribunal in the assessee-Appellants own case Nestle India Ltd. vs CCE, Delhi 2017 (3) TMI 1409 - CESTAT NEW DELHI , where it was held that Where flavouring agent of 0.03% of the total composition is added, which does not change the basic characteristic of the product and the product remains a nutritious milk drink only. The appropriate classification for the impugned product will be under Chapter tariff item 0404 90 00 of the Central Excise Tariff Act, 1985 - the classification for the impugned products will be under the Tariff Heading 0404 90 00 of the Central Excise Tariff Act, 1985, as claimed by the assessee-Appellants - appeal allowed - decided in favor of assessee.
Issues: Classification of goods under Central Excise Tariff Act, 1985
Detailed Analysis: 1. Issue: Classification of NIDO Nutritious Milk for growing kids under the Central Excise Tariff Act, 1985. - Summary: The appeal was filed against the Order-in-Original passed by the Commissioner of Central Excise, New Delhi, disputing the classification of NIDO Nutritious Milk under Tariff Item 0404 90 00 instead of 1901 90 90. - Analysis: The Department argued that the product should be classified under Tariff Heading 1901 due to the addition of flavor, which they claimed was not permitted under Tariff Heading 0404. The assessee-Appellants contested this, stating that the addition of a small quantity of artificial flavoring substance did not change the essential nature of the product from what is covered under 0404. They relied on previous Tribunal decisions to support their classification. 2. Issue: Interpretation of HSN Notes and relevant case laws. - Summary: The Tribunal referred to the HSN Notes of tariff headings 0404 and 1901 to determine the appropriate classification for the product. - Analysis: The Tribunal analyzed the HSN Notes and previous case laws to conclude that the addition of artificial flavoring substance did not warrant a shift in classification from Chapter 4 to Chapter 19. They highlighted that the product remained a nutritious milk drink even with the addition of flavor, and thus should be classified under Tariff Heading 0404 90 00. 3. Outcome: Decision and order of the Tribunal. - Summary: The Tribunal set aside the impugned order and allowed the appeal filed by the assessee-Appellants. - Analysis: Based on the interpretation of the HSN Notes and relevant case laws, the Tribunal determined that the appropriate classification for the NIDO Nutritious Milk for growing kids was under Tariff Heading 0404 90 00 of the Central Excise Tariff Act, 1985. Therefore, the impugned order was set aside, and the appeal was allowed. This detailed analysis of the judgment highlights the issues of classification under the Central Excise Tariff Act, the interpretation of relevant provisions and case laws, and the ultimate decision of the Tribunal in favor of the assessee-Appellants.
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