1994 (9) TMI 145 - AT - Central Excise

Summary

Issues: Classification of product under Tariff Item 1B or TI 68, eligibility for exemption under Notification Nos. 104/82, 234/82, and 17/70.

In this case, the departmental appeal was filed against the order of the Collector (Appeals) regarding the classification of a product called "Aprot" manufactured in 200 ml and 50 ml containers. The Assistant Collector initially denied the benefit of Notification Nos. 104/82 and 234/82, classifying the item under TI 68. The Collector (Appeals) allowed the appeal treating the item as a prepared and preserved food under Tariff Item 1B eligible for exemption under Notification No. 17/70. The department argued that the product should not be considered as 'food' under TI 1B, relying on judicial pronouncements that terms like 'P & P food' should be interpreted based on general usage and trade knowledge. The product was deemed a food supplement, not a food product or preparation, and hence not eligible for exemption under the notification.

The respondents contended that their product, although a food supplement, was not a drug or medicine and should be classified under Tariff Item 1B like similar products from other manufacturers. They emphasized the similarity of their product's composition to Alprovit and spert. The respondents also referred to HSN Chapter 21, arguing that the product fell under sub-heading 21.06.10 as a food preparation containing Protein Hydrolysates, exempting it under Notification No. 17/70 or 234/82 if classified under TI 68.

The Tribunal found that the product was a synthetic preparation akin to a tonic food supplement, not fitting the category of 'prepared or preserved foods'. The post-February 1986 tariff excluded 'tonic beverages' from Chapter 30 'Pharmaceutical products', further supporting the classification. Under the old tariff, the product did not meet the criteria for 'prepared or preserved food', making it classifiable under TI 68. The initial classification by the Assistant Collector under TI 68 was deemed correct.

Considering that the product did not qualify as a food product or preparation under the relevant notifications, the Tribunal set aside the order of the Collector (Appeals) and accepted the department's appeal. The order of the Assistant Collector was restored and confirmed accordingly.