1997 (11) TMI 229 - AT - Central Excise

Summary

Issues: Classification and dutiability of skimmed milk powder, floor or chambers sweepings; Correct classification under Central Excise Tariff; Grounds for appeal including limitation and duty exemption.

In the appeal before the Appellate Tribunal CEGAT, New Delhi, the issue revolved around the classification and dutiability of skimmed milk powder, floor, or chambers sweepings. The Addl. Collector, Central Excise, Chandigarh had classified the floor sweepings as skimmed milk powder under sub-heading 0401.13 of the Central Excise Tariff, demanding duty and imposing a penalty. The Tribunal heard arguments from both parties and examined the nature of the product and its classification under the Tariff.

The Tribunal noted that the appellants were engaged in the manufacture of skimmed milk powder, where sweepings were collected and sold for purposes other than human consumption, such as cattle feed. It emphasized that skimmed milk powder, as a dairy product, must meet specific requirements for human consumption under the Food Adulteration Act. The classification under Heading No. 4.01 of the Tariff was crucial, with sub-headings delineating various products based on their intended use and preparation process.

Regarding the classification under sub-heading 40.13 for skimmed milk powder not specially prepared for infants, the Tribunal disagreed with the Addl. Collector's classification of floor sweepings as standard skimmed milk powder. It highlighted the distinction between sweepings and the specific requirements for skimmed milk powder intended for general use, indicating an incorrect classification by the Adjudicating Authority.

The appeal also raised concerns about the limitation for duty demand, with the appellant citing a clarification from the jurisdictional Superintendent of Central Excise exempting floor sweepings from duty under the old Tariff. The Tribunal examined the grounds for invoking the extended period of limitation due to alleged suppression of facts but found no justification for such extension. Considering the nature of the product and the applicable Tariff provisions, the Tribunal concluded that the Addl. Collector's classification was erroneous, leading to the allowance of the appeal.

In conclusion, the Tribunal set aside the Addl. Collector's decision, emphasizing the incorrect classification of floor sweepings as skimmed milk powder and rejecting the grounds for invoking the extended period of limitation. The appeal was allowed in favor of the appellant, M/s. Ludhiana District Cooperative Milk Producers Union Ltd.