1989 (3) TMI 212 - AT - Central Excise

Summary

Issues: Classification of Food Colors under Central Excise Tariff Act, 1985

Issue 1: Classification Dispute
The appeal challenged the classification of 'Food colours' manufactured by a company under Heading No. 3204.90 or 2107.99 of the Central Excise Tariff Act, 1985. The Collector of Central Excise (Appeals) ruled in favor of classification under Heading No. 21.07.

Analysis:
The dispute centered around whether 'Food colours' should be classified as edible preparations under Chapter 21 or as synthetic organic colorants under Chapter 32. The appellant argued that the goods were synthetic organic colorants and should be classified under the residuary sub-heading 3204.90. Conversely, the respondents contended that 'Food colours' were distinct from synthetic organic dyes and were more appropriately classified under Chapter 21 as edible preparations.

Issue 2: Legal Interpretation
The Tribunal analyzed the legal interpretations provided by both parties. The appellant relied on the Tribunal's decision in a previous case and the Supreme Court judgment in Commissioner of Sales Tax, U.P. v. S.N. Brothers to support their classification argument. On the other hand, the respondents cited the Tribunal's decision in another case and the same Supreme Court judgment to assert their position.

Analysis:
The Tribunal examined the applicability of previous judgments to the current case, emphasizing the need to determine whether 'Food colours' qualified as edible preparations. Reference was made to the Supreme Court's observation that 'food colours' were edible goods, contrasting them with non-edible dyes and colors. The Tribunal also considered the chapter titles and notes in the Central Excise Tariff Act to ascertain the appropriate classification.

Issue 3: Application of Chapter Notes
The parties presented arguments based on specific chapter notes and notifications to support their classification stance under the Central Excise Tariff Act, 1985.

Analysis:
The Tribunal deliberated on the relevance of Chapter Notes, particularly Note 5 to Chapter 21, in determining the classification of 'Food colours.' It concluded that Chapter Note 5 encompassed items like flavoring powders for beverages, indicating that 'Food colours' could fall under Heading No. 21.07. The Tribunal rejected the contention that 'Food colours' were akin to colored syrups due to their powdered form.

Conclusion:
After thorough analysis, the Tribunal upheld the decision of the Collector of Central Excise (Appeals) and dismissed the appeal. It determined that the appropriate classification for 'Food colours' was under Heading No. 2107.99 in Chapter 21, rather than under Heading No. 3204.90 in Chapter 32. The Tribunal emphasized that statutory notifications could not be used to settle classification disputes, relying instead on relevant headings, notes, and legal judgments for guidance.