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1996 (4) TMI 253 - AT - Central Excise
Issues: Classification of "Wheat Flour Sheet" for duty levy under Tariff Item 68 vs. T.I. 1-C.
Analysis: The Revenue contended that the product "Wheat Flour Sheet" used in manufacturing "Krisp" chocolate should be classified under Tariff Item 1-C, as it resembles biscuits and should attract duty. The Collector (Appeals) held that the product does not meet the criteria of biscuits as commonly understood and classified it under Tariff Item 68 due to captive consumption within the factory. The Revenue argued that the product should be classified under T.I. 1-C, emphasizing that the ISI Specifications for biscuits are for quality control and not determinative of classification. They also questioned the marketability of the product, stating that lack of evidence from the Respondents regarding its marketability is a crucial factor. The Respondents, represented by an advocate, argued that the product is not marketable as a biscuit, citing trade opinion and lack of sugar, essence, or flavor in the wheat flour sheets. They emphasized that marketability is essential for duty imposition, referring to relevant case laws such as Bhor Industries Ltd. v. C.C.E. and Indian Cable Co. Ltd. v. C.C.E. They highlighted that the onus to prove marketability lies with the Revenue, and the trade opinion provided supports the claim that the product is not recognized as a biscuit in the market. The Tribunal analyzed the evidence presented by both sides, noting that the product lacks essential biscuit ingredients and does not meet market standards for biscuits. They emphasized the importance of marketability in determining duty imposition, referencing case law to support their decision. The Tribunal found that the Respondents adequately proved the product's non-marketability, while the Revenue failed to provide evidence to the contrary. Consequently, the Tribunal rejected the Revenue's appeal and upheld the classification under Tariff Item 68. The Cross Objections were disposed of accordingly, with the first ground not pressed by the Respondents as it was implicit in the impugned order.
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