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TMI Blog1995 (4) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was stated that the appellants had been suppressing facts regarding the correct percentage of chocolate in Chocolate Eclairs which according to the reports of the Chemical Examiner and Chief Chemist had chocolate content by weight of 27% (approximately) and 27.7% respectively. The appellants were therefore, asked to show cause as to why Chocolate Eclairs manufactured by them should not be classified under Tariff Item 1A and differential duty should not be recovered on the clearances during the period 20-12-1980 to 16-3-1985 under Section 11A(1) of the Central Excises and Salt Act, 1944. 2. While denying the allegations in the show cause notice, the appellants stated that they had been clearing Chocolate Eclairs under Tariff Item 68 on the basis of approved classification lists. They stated that the ingredients and the process of manufacture of Chocolate Eclairs in their factory had remained substantially unaltered. They pointed out that in 1969 refund claimed by them in respect of Chocolate Eclairs classified under Tariff Item 1A(ii) as chocolate was allowed by the Assistant Collector and the goods were held as classifiable under Tariff Item 1A(i) as boiled sweets. They also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... test report dated 21-10-1980 in respect of the sample drawn on 10-3-1980, the Department once again initiated proceedings with a view to classify Chocolate Eclairs under Tariff Item 1A(4) as Chocolates but these proceedings were also dropped by the Assistant Collector by his order dated 3-2-1982. He submitted that there being no statutory definition of `Chocolate in the Tariff, the question whether Chocolate Eclairs could be deemed as `Chocolate or `boiled sweets could be decided only on the basis of the trade parlance. He contended that the adoption of criteria of chocolate content in excess of 3.5% by weight as laid down in the Tariff Advice for determining whether Chocolate Eclairs would be classifiable as chocolates was totally arbitrary and illegal. He stated that the chocolate content of 27% as determined by the Chemical Examiner in respect of the sample drawn on 21-1-1985 had been relied upon by the Collector even though the appellants had pointed out that higher figure in respect of the chocolate content was on account of the weight of the ingredients, namely icing sugar, milk powder, edible fats having been used along with cocoa beans as inner filling in Eclairs appeare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RE OF WHICH ANY PROCESS IS ORDINARILY CARRIED ON WITH THE AID OF POWER, NAMELY (1) Boiled sweets, Toffees, Caramels, Candies, Nuts (including almonds) and fruit kernels coated with sweetening agent, and chewing gums. (2) Cocoa powder (3) Drinking Chocolates, chocolates in the form of granules or powder. (4) Chocolates in the form of blocks, slabs, tablets, bars, pastilles or croquettes or in any other form, not otherwise specified, whether or not containing nuts, fruit kernels or fruits. With the introduction of the Finance (No. 2) Bill, 1977 Boiled Sweets, Toffees, Caramels, Candies, Nuts (including Almonds) and Fruit Kernels coated with sweetening agent (falling under sub-item (1) of T.I. 1A) were omitted from T.I. No. 1A and the result was amendment of the description of T.I. No. 1A to read as :- 1A - CONFECTIONERY, COCOA POWDER AND CHOCOLATES, IN OR IN RELATION TO THE MANUFACTURE OF WHICH ANY PROCESS IS ORDINARILY CARRIED ON WITH THE AID OF POWER NAMELY :- (1) Chewing Gums (2) Cocoa Powder (3) Drinking chocolates, chocolates in the form of granules or powder. (4) Chocolates in the form of blocks, slabs, tablets, bars, pastilles or croquettes, or in any ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assistant Collector accepted the appellants explanation and by his order dated 3-2-1982 dropped further proceedings in regard to re-classification of Chocolate Eclairs under Tariff Item 1A(4). 8. The Collector has held that after October, 1981 Chocolate Eclairs containing more than 3.5% of chocolate became classifiable under Tariff Item 68 in terms of the Tariff Advice of October, 1981 and the Trade Notice No. CE 282/81, dated 2-11-1981 which clarified that Chocolate Eclairs and Chocolate Toffees containing about 3.5% of chocolate were classifiable under Tariff Item 1A(4). In the case of Collector of Customs v. Bhor Industries Ltd. reported in 1988 (35) E.L.T. 346, the Supreme Court has held that for the purposes of classification how the goods are known in the trade and treated in the trade literature is relevant and significant. In the case of Indo-International Industries v. Commissioner of Sales Tax, U.P. reported in 1981 (8) E.L.T. 325, the Supreme Court has held that if any term or expression has been defined in the enactment then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment, the meaning of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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