Coffee powder classifiable under Tariff Item 2 of erstwhile CET - Central Excise - 13/45/85-CX.1

Coffee powder classifiable under Tariff Item 2 of erstwhile CET Letter No. 13/45/85-CX.1 Dated 14-2-1986 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Attention is invited to the Budget Circular No. 13 issued from F. No. 35/2/75-TRU, dated 13-5-1975 in terms of which, it was advised that powdered coffee could be considered as covered under the general heading "Coffee" under Item 2 of Central Excise Tariff as against Item No. 68 of Central Excise Tariff, even though no rate of duty had been prescribed for such coffee under sub-items (1) and (2) of Item No. 2 of Central Excise Tariff. 2. Consequent to the amendment of Tariff Item 68 during 1980 inserting an Explanation under the item, doubts were raised regarding the correctness of the above view. The effect of the explanation was to include under Item 68, goods referred to in any preceding item in the Central Excise Tariff for the purpose of excluding such goods from the description of goods in that item, whether such exclusion was by means of an explanation to such item or by words of exclusion in the description itself or in any other manner. A doubt was expressed that as coffee powder was not specifically provided under Tariff Item 2, notwithstanding its coverage under the broad tariff heading for Tariff Item 2, it would get excluded from Tariff Item 2 by virtue of the aforesaid explanation to Item 68, as it was a case of exclusion "in any other manner". Gujarat High Court judgment in the case of Shree Vallabh Glass Works v. Union of India was also referred to in which it was considered that merely because the heading of tariff entry is wide, it would not mean that it would cover all types of commodities which would be covered by the general headings unless specific provisions is made for those in the body of the entry or in any other tariff item itself. 3. The matter has been further examined by the Board. Board observes that by Explanation I to Tariff Item 2, Coffee, cured has been defined to mean the seed of the coffee tree whether with or without a husk. The Board hás viewed that although rates of duty are prescribed only for cured and for instant coffee and not for coffee powder as such, it would be far fetched to take the view that the absence of a rate of duty on coffee powder would imply its exclusion "by words of exclusion in the description itself or in any other manner" as per the explanation to Item 68, so as to cover it under the residuary tariff item. As regards the question whether the conversion of coffee seeds involve "manufacture", the Board is of the opinion that the issue in this case is not whether "manufacture" takes place in such conversion, but whether the tariff item covers coffee powder or not. Taking into consideration the main heading of the Tariff Item 2 viz. "coffee", it was concluded that the heading was wide enough to cover coffee powder. The Board is accordingly of the view that coffee powder is correctly classifiable under Item 2 of Central Excise Tariff.