1996 (4) TMI 199 - AT - Central Excise

Summary

Issues: Classification of residue obtained during the process of manufacturing instant coffee.

The judgment by the Appellate Tribunal CEGAT, New Delhi, involves a dispute regarding the classification of residue obtained during the manufacturing of instant coffee. The Revenue argues that the spent coffee, classified under Tariff Heading 0901.90, should attract duty as it contains some coffee and is utilized by other industries as a raw material. The respondents, however, contend that the proper classification is under Heading 2301.00, covering residue and waste from food industries. The Collector (Appeals) had initially held that the product is not classifiable under Heading 0901 as a coffee substitute. The Tribunal analyzed the definitions and interpretations of "coffee substitute" and "coffee" to determine the correct classification. It was concluded that the spent coffee residue cannot be considered a coffee substitute and should not be covered under Tariff Item 0901.

Furthermore, the Collector (Appeals) did not consider the alternative classification under Heading 2301. The respondents argued that the residue should be classified under Heading 2301 as residue and waste from food industries, eligible for exemption under Notification 113/86. The Tribunal referenced the HSN Notes under Heading 2308, specifically mentioning residues left after the preparation of coffee substitutes, to support the classification under Heading 2301. Consequently, the Tribunal held that while the product does not fall under Heading 0901 as a coffee substitute, it should be correctly classified as residue under Heading 2301 and be entitled to the exemption under Notification 113/86.

In conclusion, the appeal was disposed of in favor of the respondents, determining that the residue obtained during the instant coffee manufacturing process should be classified under Heading 2301 as residue and waste from food industries, qualifying for exemption under Notification 113/86.