1991 (7) TMI 177 - AT - Central Excise

Issues Involved:
1. Classification of 'Complan' under S. No. 14 of Notification No. 17/70 dated 1-3-1970.
2. Interpretation of the term 'basis' in the context of the product's ingredients.
3. Applicability of the Tribunal's judgment in the case of CCE Pune v. Frozen Foods(P) Ltd.
4. Evidence supporting the classification of 'Complan' as a milk food.
5. Redundancy of S. Nos. 12 and 13 if 'Complan' is classified under S. No. 14.

Detailed Analysis:

1. Classification of 'Complan' under S. No. 14 of Notification No. 17/70:
The primary issue is whether 'Complan' can be classified under S. No. 14 of Notification No. 17/70, which lists dutiable items under Tariff Heading 3B. According to the appellants, 'Complan' does not fall under S. No. 14 because it lacks a basis of flour, starch, malt extract, or malted barley. They argue that maltodextrin, an ingredient in 'Complan', is distinct from these substances and is derived from corn or tapioca through hydrolysis, making it free from starch.

2. Interpretation of the term 'basis':
The respondents, represented by Smt. Vijay Zutshi, contend that 'Complan' is a preparation with a basis of starch/modified starch and milk foods. They argue that maltodextrin, a modified starch, forms a principal component of 'Complan'. According to Black's Law Dictionary, "basis" means the principal component parts of a thing, supporting the classification of 'Complan' under S. No. 14.

3. Applicability of the Tribunal's judgment in CCE Pune v. Frozen Foods(P) Ltd.:
The appellants rely on the Tribunal's judgment in the case of CCE Pune v. Frozen Foods(P) Ltd., where the product 'Spert' was not covered under S. No. 14 due to lack of evidence from the department. The majority view in that case held that the term "milk foods" was not sufficiently defined, leading to the conclusion that 'Spert' did not fall under S. No. 14. However, the respondents argue that the present case has sufficient evidence to classify 'Complan' as a milk food, distinguishing it from the Frozen Foods case.

4. Evidence supporting the classification of 'Complan' as a milk food:
The respondents presented certificates from the National Institute of Nutrition and the National Dairy Research Institute, which categorically state that 'Complan' can be considered a milk food. These certificates provide substantial weight to the argument that 'Complan' falls under S. No. 14. The Tribunal agreed with the respondents, noting that the lack of evidence in the Frozen Foods case is not an issue here.

5. Redundancy of S. Nos. 12 and 13:
The appellants argue that if 'Complan' is classified under S. No. 14, S. Nos. 12 and 13, which list skimmed milk powder and condensed milk as dutiable, would become redundant. The Tribunal rejected this argument, stating that S. Nos. 12 and 13 are special types of milk products with no other ingredients, whereas milk foods under S. No. 14 can contain other ingredients and must be capable of being used as beverages by mixing with or boiling in milk or water.

Conclusion:
The Tribunal concluded that 'Complan' falls under S. No. 14 of the Schedule to Notification No. 17/70 dated 1-3-1970, as it is a milk food that can be used for making beverages by simply mixing with or boiling in milk or water. Therefore, the appeal was rejected.

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