2009 (8) TMI 98 - SC - Central Excise

Classification - whether the subject product Cheetos Masala Balls , Cheetos Cheese Puff and Cheetos X & O is classifiable under Chapter Sub Heading 1904.10 (CSH) as is contended on behalf of the Department; or whether it falls under CSH 2108.00 (which is residuary Entry) as contended on behalf of the assessee. held that - the subject products are neither obtained by swelling or roasting of cereals nor are they made from cereals in grain form. They are made from cereals in grounded form. Hence, the impugned product will not fall in CSH 19.04. The statutory illustration is corn flakes. Now in the case of plane corn flakes which is obtained by swelling or roasting there is no frying or application of masala or choco, hence it will fall in the first category. However, in case of choco corn flakes besides process of swelling or roasting there is an element of choco which will bring the product out of that category. - the subject product will not come in the first category of CSH 19.04. - It is well settled rule of interpretation that if a specific entry covers an impugned product then one need not go into the residuary heading. However, it is for the Department to show that Cheese Masala Balls , Cheese Puffs etc. falls within 19.04. If the subject products do not fall in 19.04 then since the products in question are edible preparations not elsewhere specified they stand covered by a residuary entry 21.08.

Summary

Issues:
Classification of 'Cheetos Masala Balls', 'Cheetos Cheese Puff' and 'Cheetos X & O' under Chapter Sub Heading 1904.10 or CSH 2108.00.

Analysis:
The Supreme Court considered the classification issue of the products 'Cheetos Masala Balls', 'Cheetos Cheese Puff', and 'Cheetos X & O' under Chapter Sub Heading 1904.10 or CSH 2108.00. The Court analyzed the relevant provisions of Chapter 19 and Chapter 21 to determine the appropriate classification. Chapter 19 pertains to preparations of cereals, flour, starch, or milk, including pastry cooks' products. Specifically, Heading 19.04 covers prepared foods obtained by swelling or roasting of cereals or cereal products. The Court noted that the subject products were not obtained by swelling or roasting of cereals but were made from cereals in grounded form. Therefore, the products did not fall under CSH 19.04. The Court highlighted that specific products like corn flakes were covered under this category based on the process of preparation.

The Court emphasized the distinction between products obtained by swelling or roasting of cereals and those involving the use of other ingredients like masala or choco. It was clarified that if a specific entry covers the product, there is no need to resort to the residuary heading. In this case, since the subject products did not fall under CSH 19.04, they were considered as "edible preparations not elsewhere specified," falling under the residuary entry 21.08. The Court held that the Department needed to demonstrate that the products fell within 19.04 for classification under that heading.

Ultimately, the Court found no error in the decision of the Tribunal and dismissed the Civil Appeal, with no order as to costs. The judgment provided a detailed analysis of the classification criteria under Chapter 19 and Chapter 21, emphasizing the importance of the specific entry covering the product for classification purposes.

This judgment clarifies the classification principles for food products under the relevant chapters of the Customs Tariff Act, providing guidance on determining the appropriate classification based on the nature of the ingredients and the process of preparation.