1999 (8) TMI 267 - AT - Central Excise

Summary

Issues Involved:
Classification of "floor sweeping and damaged biscuits (under-baked over-baked)" under Tariff Heading 23.01 or 1905.11.

Comprehensive Analysis:

Issue 1: Classification of the product
The question in this appeal revolves around the classification of "floor sweeping and damaged biscuits" under the appropriate Tariff Heading. The Revenue asserts that the product falls under Tariff Heading 23.01, as determined by the Assistant Collector of Customs. On the contrary, the assessee argues that the product is not excisable. The lower appellate authority sided with the assessee, prompting the Revenue to appeal the decision.

Issue 2: Interpretation of Chapter Notes and Explanatory Notes
The Revenue contends that Chapter Note 1(b) of Chapter 19 of HSN excludes biscuits made from flour intended for animal feeding from Chapter 19. Additionally, they argue that the product in question, being sold for use in fisheries industries, should be classified under Tariff Heading 2301.00. The Revenue emphasizes the marketability and pricing of the product to support their classification argument.

Issue 3: Judicial Precedents and Interpretation of Waste Products
The respondent argues that the product is merely floor sweepings and damaged biscuits, akin to rubbish, citing judicial precedents to support their stance. They highlight a previous Tribunal judgment regarding waste products in the context of excisability. The lower appellate authority's detailed findings on why Tariff Heading 2301.00 is not applicable are also emphasized by the respondent.

Issue 4: Analysis of Manufacturing Process
The judgment delves into the manufacturing process of biscuits, outlining how the product in question, a mixture of various waste materials, is derived. The product is described as floor sweeping containing flour, sugar, salt, crushed biscuits, and other waste components. The Assistant Collector's description of the manufacturing process and the nature of the product play a crucial role in determining its classification.

Conclusion:
After considering the arguments from both sides and examining the manufacturing process in detail, the Tribunal concludes that the product in question, characterized as floor sweeping and damaged biscuits, is a waste of the biscuit industry and does not qualify as a preparation for animal feeding or a residue from the food industry. The Tribunal dismisses the Revenue's appeal, upholding the lower appellate authority's decision. The judgment emphasizes that the mere fact that the product is sold for a price does not transform it into an excisable good deliberately manufactured by the industry, thereby affirming the classification under the lower appellate authority's ruling.