2015 (2) TMI 740 - AT - Customs

Classification of imported goods- Food supplement or Food preparation for infants- Held that - From the reading of tariff entry 1901 it is clear that Food preparations of goods of heading 0401 to 0404 is classifiable under 1901 and in particular preparations for infant use falls under 1901.10. From the heading 2106 it can be seen that it covers Food preparations not elsewhere specified or included . On analysis of both the above tariff entries, it is clear that if any food preparation is specifically covered and included in any other tariff heading other than 21.06, the same will not fall under Custom Tariff Head 21.06. The product in question i.e. SIMILAC-2 is admittedly preparation predominantly of milk powder and it is for consumption by an infant. The milk powder is goods falling under 04.02. Thus the product SIMILAC-2 is a food preparation of goods of heading 04.02 and exclusively meant for consumption of infant babies. From the above undisputed facts, it is clearly established that the products SIMILAC-2 is specifically covered under the CTH 19011090. Since SIMILAC-2 is covered under 19011090, the same can not, by any stretch of imagination, be covered under CTH 21.06 for a simple reason that the tariff entry of 21.06 is a residuary entry and only those products, which do not find any place in any specific entry, will get classified under the residuary tariff entry. The submission of the revenue that since there is mention on the product that the same should be used on the advise of the health worker, it is not a food but it is medicine, is not at all acceptable for the reason that in terms of the Section 6(b) of the Infant Food Act, the Respondent made a statement on the product - Infant milk substitute or infant food should be used only on the advice of a health worker as to the need for its use and the proper method of its use. This statement is statutory requirement to ensure that premature babies and infants are not affected by any adverse reaction to infant food and not because it is a medicinal product as assumed by the revenue. As per Note 2A of the General Notes Regarding Import Policy to ITC-HS goods imported into India have to comply with the mandatory Indian Standards which are applicable to goods manufacture in India Sl. No. 12 of Appendix III to ITC-HS covers goods covered by IS 15757 2007 titled Follow up formula-Complementary Foods-Specification . On the package of SIMILAC-2, the said IS specification is mentioned. The description of the goods amongst others, mentioned on the product is FOLLOW -UP FORMULA - COMPLEMENTARY FOOD, Similac-2 is spray dried stage 2 follow-up formula designed for infants from 6 months onward as part of a healthy diet during and after waning . From this fact, it is clear that the clear that the certification given under IS 15757 2007 itself endorses the nature of the product that it is a FOLLOW-UP FORMULA and infant food complementary to mother s milk. Therefore there is no doubt in our mind that the product SIMILAC-2 is an infant food and correctly classifiable under CTH 1901.10 and not under 21.06. Decided against the appellant.

Summary

Issues Involved
1. Classification of the imported goods SIMILAC-2.
2. Eligibility for benefit under notification no. 010/2008-Cus Sr. No. 9.
3. Compliance with various food safety and standards regulations.

Detailed Analysis

1. Classification of the Imported Goods SIMILAC-2
The core issue in this case is whether SIMILAC-2 should be classified under CTH 21069099 as a "food supplement" or under CTH 19011090 as a "food preparation for infants." The Revenue classified it under CTH 21069099, arguing that it is a food supplement containing proteins, minerals, vitamins, carbohydrates, and fats, to be taken under medical advice. The Revenue contended that food supplements are classifiable under CTH 21069099 and not as basic food preparations under CTH 19011090.

The respondent argued that SIMILAC-2 is predominantly a preparation of milk powder, classifiable under Chapter 04.02, and thus falls under Chapter 1901, which covers food preparations of goods of headings 0401 to 0404. They cited the Harmonised System Committee of the World Customs Organization, which classifies follow-up formulas consisting of skimmed milk for infants under 1901.10. They also referenced the "Infant Milk Substitute, Feeding Bottle and Infant Foods (Regulation of Production, Supply, and Distribution) Act, 1992," which mandates specific labeling requirements for infant food products.

The tribunal concluded that SIMILAC-2 is predominantly a milk powder preparation meant for infants, falling under 1901.10. The product is specifically covered under CTH 19011090 and cannot be classified under the residuary tariff entry 21069099, which is for food preparations not specified elsewhere.

2. Eligibility for Benefit under Notification No. 010/2008-Cus Sr. No. 9
The Revenue argued that since SIMILAC-2 is classified under CTH 21069099, it is not eligible for the benefits under notification no. 010/2008-Cus Sr. No. 9. The tribunal, however, found that since the product is correctly classifiable under CTH 19011090, it is entitled to the benefits under the said notification.

3. Compliance with Various Food Safety and Standards Regulations
The tribunal examined whether SIMILAC-2 complies with various food safety and standards regulations, including the Food Safety and Standards Act, 2007, and the Infant Milk Substitutes, Feeding Bottles, and Infant Foods (Regulation of Production, Supply, and Distribution) Act, 1992. The product literature and packaging indicated compliance with these regulations, including mandatory BIS certification and adherence to IS 15757:2007 standards for infant food.

The tribunal noted that the requirement for the product to be used under medical advice is a statutory mandate under the Infant Food Act to ensure safety, not an indication that the product is medicinal. The definition of "food" under the Food Safety and Standards Act, 2006, includes "infant food," thus supporting the classification of SIMILAC-2 as a food product.

Conclusion
The tribunal upheld the decision of the Commissioner of Customs (Appeals), concluding that SIMILAC-2 is correctly classifiable under CTH 19011090 as a "food preparation for infants" and not under CTH 21069099 as a "food supplement." The product is eligible for benefits under notification no. 010/2008-Cus Sr. No. 9 and complies with relevant food safety and standards regulations. The appeal of the Revenue was dismissed accordingly.