1991 (9) TMI 165 - AT - Central Excise

Summary

Issues:
Classification of Everest brand 'Milk Masala' under sub-heading 0801.10 or 2107.91, applicability of duty exemption under Notification 29/86-C.E., whether mixing of ingredients amounts to manufacture under Section 2(f) of the Central Excises & Salt Act, 1944.

Analysis:
The appeal concerned the classification of 'Milk Masala' manufactured by the appellants. They claimed classification under sub-heading 0801.10 and exemption from duty under Notification 29/86-C.E. However, the product was classified under sub-heading 2107.91 as edible preparations by the authorities. The Assistant Collector relied on Chapter 21 of the Central Excise Tariff, specifically Note 5(b), which includes preparations for human consumption. The Collector (Appeals) upheld this classification, emphasizing the distinct character and use of the product due to the mixture of nuts and other ingredients.

The appellants argued that since nuts constituted a significant portion of the ingredients, the product should be classified under Chapter 8 as edible fruit and nuts. They contended that the mixing of ingredients did not amount to manufacture under Section 2(f) of the Act. They also questioned the lack of market enquiry in the classification process. The appellants' representative reiterated the claim for classification under sub-heading 0801.10 and duty exemption during the hearing.

The Respondent argued that the product, known as 'Milk Masala' in common parlance, did not fall under Chapter 8 but should be classified under Chapter 21 as an edible preparation. They cited previous Tribunal decisions to support their position on classification based on common parlance and product preparation. The Respondent highlighted that the product's identity as 'Milk Masala' distinguished it from being classified under Chapter 8.

After considering the arguments and case records, the Tribunal concluded that the product should be classified under sub-heading 2107.91 as 'Milk Masala.' They emphasized the common parlance test and the distinct name, character, and use of the product. The Tribunal rejected the application of Rule 2(b) for classification based on the product's composition and market identity as 'Milk Masala.' The Tribunal also dismissed the argument that mixing of ingredients did not amount to manufacture, citing relevant legal precedents supporting the emergence of a new article with a distinct name and use.

Regarding the Explanatory Notes to Chapter 21, the Tribunal found that the product fell under the residuary entry of sub-heading 2107.91. The Tribunal refuted the argument that specific inclusion in Chapter 21 was necessary for classification, as Chapter 21 covered 'Miscellaneous Edible Preparations.' Ultimately, the Tribunal upheld the classification of 'Milk Masala' under sub-heading 2107.91, rejecting the appeal and denying the request for remand for further classification determination.