2001 (3) TMI 157 - AT - Central Excise

Summary

Issues Involved:
1. Classification of Dessert Mixes.
2. Validity of differential duty demand based on classification.
3. Correct classification under Chapter Heading 04.04 or 19.01.

Summary:

1. Classification of Dessert Mixes:
M/s. Nestle India Ltd. sought to classify their Dessert Mixes (Nestle Milkmaid Kesar Kulfi Mix, Nestle Milkmaid Shahi Rabri Mix, and Nestle Milkmaid Kalakand Mix) under Chapter Heading 04.04 for the period from 1-5-1996 to 18-9-1996. The adjudicating authority classified these products under Chapter sub-heading 2108.90, leading to a demand for differential duty. The appellate authority disagreed with this classification but did not uphold the classification under Heading 04.04 either, directing a re-examination.

2. Validity of Differential Duty Demand Based on Classification:
The Tribunal noted that the show cause notice demanded differential duty on the basis that the products were classifiable under Chapter sub-heading 2108.90. The appellate authority found this classification untenable. It is settled law that recovery of duty under a different Tariff Heading than proposed in the show cause notice is not permissible (Collector of Central Excise v. Bright Brothers Ltd.). Therefore, the differential duty claimed in the show cause notice was irrecoverable without issuing a new show cause notice for classification under Heading 19.01.

3. Correct Classification Under Chapter Heading 04.04 or 19.01:
The Tribunal examined the ingredients of the products and the relevant Tariff sub-headings. Chapter 4 covers dairy produce and products consisting of natural milk constituents, even with added sugar, sweetening matter, or flavoring. The Tribunal found that the products did not contain any ingredients that would exclude them from Heading 04.04. The presence of starch below 5%, sugar, almond bits, pistachio bits, or saffron bits did not disqualify the products from this heading. Citric and tartaric acids, being flavoring agents, also did not affect this classification.

Chapter Heading 19.01 applies to food preparations of milk and cream not elsewhere specified or included. Since the products did not contain ingredients not permitted by Chapter Headings 04.01 to 04.04, they could not be classified under Heading 19.01. The Tribunal rejected the argument that the products were not edible as such and thus could not be classified under Heading 04.04, agreeing with the appellate authority's interpretation of "edible."

The Tribunal also dismissed the reliance on the decision in Collector of Central Excise v. Frozen Foods Pvt. Ltd., as the products in question were different in character and composition. The Tribunal concluded that the products were classifiable under Heading 04.04, and the duty demanded under Chapter Heading 21.08 could not stand.

Conclusion:
The Tribunal held that the Dessert Mixes (Nestle Kalakand Mix, Nestle Rabri Mix, and Nestle Kesar Kulfi Mix) are classifiable under Heading 04.04. The appeal was allowed with consequential reliefs, if any.