9911796707
TMI Blog2006 (3) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... division of M/s. Amrit Banaspati Company Limited) are manufacturers of various dairy products. A team of Central Excise Officers visited their factory premises on 3-11-1999 and conducted inquiry about the products manufactured by them. During the inquiry, it was found that the unit is engaged in the manufacture of milk based products, namely, milk shake mix, soft serve mix, skimmed milk, toned milk, double toned milk and cream. It was informed by M/s. Amrit Foods that on 7-2-1996, they had informed the Assistant Commissioner that they were manufacturer of UHT treated dairy milk falling under Chapter 4 which is subject to nil rate of duty and that they intended to manufacture some more dairy products falling under the said chapter which are also subject to nil rate of duty. They accordingly took exemption from obtaining registration. During the inquiry, the statements of Shri Naveen Mittal, Additional General Manager of M/s. Amrit Foods and other concerned persons were recorded. After conducting investigation, prima facie, it appeared that the soft serve mix, skimmed milk, etc. which were being manufactured by the appellants since their inception are not classifiable under Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was set aside but the Tribunal did not find any infirmity in the order of the Commissioner with regard to classification and duty demand confirmed by the Commissioner. On appeal filed against the final order of this Tribunal, the Hon'ble Supreme Court upheld the order of the Tribunal setting aside the penalty but remanded back the matter of classification to be decided afresh as stated above. 4. It was argued by the learned Counsel for the appellant that the 4 products for which classification has been filed by them under Heading 04.04 but which has been held classifiable under sub-heading 1901.19 by the Commissioner, are as under: - (1) Milk Shake Mix, (2) Soft Serve Mix, (3) Coffee Creamer, (4) Cream Packed. The Commissioner has not given any detailed finding on the classification of coffee creamer and cream packed in the adjudication order. It was argued by the learned Counsel for the appellant that these products are covered under sub-heading 0404.90. This position has not been disputed by the Revenue during arguments before us. Thus, we are left with the classification of milk shake mix (MSM) and soft serve mix (SSM). 5. It was argued that the Commissioner in the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be limited to maintenance of consistency and should not change the characteristics of the products. In the instant case, the intended use of stabilizers in the manufacture of subject goods, namely, SSM and MSM are three pronged i.e. to maintain a uniform emulsion of oil in water throughout the shelf life, to improve the body and texture and to impart smoothness to the product. The use of stabilizers should not interfere with basic characteristics of the products. In the instant case, the stabilizers is consciously selected so as to bring about desired change in the characteristics of the subject goods. Use of stabilizers in the manner specified in itself is sufficient ground to take the products SSM and MSM out of purview of the Chapter 4." This finding of the Commissioner was contested on the ground that the use of stabilizers is permitted to maintain the consistency of the products. The stabilizers used by them are prescribed emulsifiers and/or stabilizers mentioned under Prevention of Food Adulteration Rules, 1955. Therefore use of these products is only to maintain consistency during storage and transport of the goods and it does not change characteristics of the products. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal in CCE v. Frozen Foods Pvt. Ltd. - 1992 (59) E.L.T. 279. It was stated that if we go through the Central Excise Tariff it can be seen that in certain entries or Chapter Notes addition of stabilizers mentioned. Reference was made to Chapter 38 of Central Excise Tariff. It was stated that what is being named by the appellant as stabilizers are not in fact stabilizers but these are emulsifiers. Our attention was drawn to the use of various emulsifiers as mentioned in Hawley's Condensed Chemical Dictionary Eleventh Edition. Carboxy methyl cellulose is stated to be used in food product (dietetic food and ice cream) where it acts as water binder, thickner, suspending agent and emulsion. Similarly, carrageenan is used emulsifier in food products. Guargum is used as emulsifiers in food products e.g. ice cream, frozen dessert. Monoglyceride is used as emulsifier. 9. It was argued by the Revenue that the stabilizer is defined in Hawley's Condensed Chemical Dictionary Eleventh Edition as "Any substance which tends to keep a compound, mixture, or solution from changing its form or chemical nature. Stabilizers may retard a reaction rate, preserve a chemical equilibrium, act as antio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held in Para 9 that "Next is the question of classification of the product softy (Shake) Mix. It is contended by the Revenue that it is preparation of milk inasmuch as it contains about 87% milk as mentioned in the impugned order. It is a ready-to-serve beverage which is obviously non-alcoholic beverage. It is therefore, clearly covered under the scope of Tariff sub-heading 2202.90, as is apparent from a description of the said heading." In Para 10 of the said order, the Tribunal has given the finding that "the lower appellate authority has forgotten to appreciate the fact that, 'ready-to-serve beverage' is implied under the description of Tariff Heading 22.02. Foods preparations of milk and cream as mentioned under 19.01 would not cover preparations of the nature of ready-to-serve beverages. Preparations of milk covered under Tariff Heading 19.01 would cover milk preparations which can be served after mixing with water or boiled water or milk to make it a beverage. There being no doubt that the product softy (Shake) Mix is ready-to-serve beverage. Therefore, it is proper to classify it, under Tariff Heading 2202.90." (2) Kwallity Ice Cream Co. v. CCE, New Delhi-1999 (114) E.L. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from milk. The case of the appellant is that the product manufactured by them contains only natural milk constituents except stabilizers added by them within prescribed quantity as permitted under the Prevention of Food Adulteration Rules in accordance with HSN Explanatory Notes to Chapter 4. It is stated by them that for the product to be classified under sub-heading 1901.19, HSN Explanatory Notes had given examples on page 147 of Harmonized Commodity Description and Coding System Second Edition Volume 1 Section III "Food preparations of goods of headings 04.01 to 04.04, not containing cocoa or containing less than 5% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included. The preparation of this heading may be distinguished from the products of Headings 04.01 to 04.04 in that they contain, in addition to natural milk constituents other ingredients not permitted in the products of those earlier headings. These products will go to the sub-heading 1901.19 only if it contains in addition to natural milk constituents other ingredients which are not the products of Chapter 4. In the present case except the stabilizers which are added in the mi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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