1995 (9) TMI 144 - AT - Central Excise

Summary

Issues:
1. Classification of the product under the Central Excise Tariff.
2. Applicability of exemption limits under relevant notifications.
3. Determination of duty liability on the disputed product.

Analysis:
1. Classification of the product under the Central Excise Tariff:
The case involved the classification of the product "Carbohydrate Protein Food 'Viprot'" under the Central Excise Tariff. The appellant argued that the product should be classified under T.I. 68 as a dietary supplement, relying on a trade notice. However, the respondent contended that the product fell under Item 1-B of the Tariff as a "Prepared Food" due to its composition and marketing in unit containers. The Tribunal examined the product's ingredients, including malt extract, milk, and sugar, and concluded that it met the description of goods under Item 1-B, being a preparation containing milk. The Tribunal rejected the appellant's argument and upheld the classification under Item 1-B.

2. Applicability of exemption limits under relevant notifications:
The Central Excise officers found that the appellant had exceeded the exemption limits prescribed under Notification No. 83/83 and other notifications for the years 1982-83 and 1983-84. The appellant failed to obtain a Central Excise license as required. The officers issued a show cause notice for recovery of duty on goods cleared in excess of the exemption limit and imposition of penalties. The appellant claimed exemption under Notification No. 17/70 but was held ineligible due to the product's composition and intended use. The Tribunal affirmed the Additional Collector's decision on the recovery of duty based on the exceeded exemption limits.

3. Determination of duty liability on the disputed product:
The appellant argued that no duty was leviable on the product under T.I. 68 and that it did not qualify as a "Prepared Food" under the Central Excise Tariff. However, the Tribunal found that the product, containing milk and other ingredients, met the criteria for classification under Item 1-B as a "Prepared or Preserved Food." Additionally, the product's use as a beverage by mixing with milk or water rendered it ineligible for exemption under the relevant notification. Consequently, the Tribunal confirmed the Additional Collector's decision on the duty liability of the disputed product and dismissed the appeal.

In conclusion, the Tribunal upheld the classification of the product under Item 1-B of the Central Excise Tariff, affirmed the recovery of duty based on exceeded exemption limits, and determined the duty liability on the disputed product in accordance with the findings. The appeal was rejected, and the impugned order was upheld.