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TMI Blog2011 (5) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... t there is an agreement between M/s. Waves Foods Pvt. Limited and M/s. Sabar Foods for manufacture of goods for M/s. Waves Foods Pvt. Limited. In fact, it is also does not denied that the printing on the pouches reads as manufactured at M/s. Waves Foods Pvt. Limited by M/s. Sabar Foods, Village : Salal, Distt : Sabarkantha - Thus it also show that the goods were being manufactured by M/s. Sabar Foods in the premises of M/s. Waves Foods Pvt. Limited - It is settled legal position that the one who actually manufactures is to be considered as manufacturer and supplier of the raw material cannot be treated as manufacturer - From this angle also, confirmation of demand of duty against M/s. Waves Foods Pvt. Limited was not called for. Demand beyond the normal period of limitation - Held that:- Non filing of declarations by the appellants was for the reasons that as the aggregate clearances value by M/s. Sabar Foods was below the small scale exemption limits, and as such no declarations was required to be filed - Further the identical products to be falling under Chapter 20, there could be bonafide belief on the part of the appellants that no duty is required to be paid by them - As su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Representative samples were drawn for determination of composition of the said product. The said samples were sent to the chemical examiner, who vide his report dated 20.05.2003 reported that though the said product contain a quantity of fruit powder, the same was not predominant. He further opined that according to Prevention of Food and Adulteration Act, the definition of fruit drinks prescribes the minimum percentage of fruit juice in the final product should not be less than 5% and he observed in his report that after analysis of drink mix, the percentage of mother mix came to 3.9%. Accordingly, he expressed his opinion that the product Rasana Rozana Amrit drink mix is appropriately classifiable under the Chapter No. 2808.99. 3. On the above basis, proceedings were initiated against the appellants by way of issuance of show cause notice dated 30.04.2003 alleging that the product being manufactured by them correctly falls under residuary heading 2808.99 and as such, clearances effected by them during the period 2002-03 without payment of duty by classifying the product under heading 2001.10 were required to discharge duty. Accordingly, notice proposed confirmation of dema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elsewhere specified or included Preparations for Lemonades or other Beverages intended for use in the manufacture of Aerated Water 16% 2108.20 Sharbat 16% 2108.30 Prasad or Prasadam Nil 2108.40 Sterilised or Pasteurised Miltone Nil Other: 2108.91 Not bearing a brand name Nil 2108.99 Other 16% As is seen from the above heading 20.01 covers the preparation of vegetables, fruits, nuts or other parts plants, fruit juices and vegetable juices, whether or not containing added sugar or sweetening matters. The major ingredients of the product is mother mix. The said mother mix contains fruit powder, vegetable extracts and fruit extracts, emulsifying and stabilizing agents, calcium salts, sodium citrate. In fact, it would be relevant to list the ingredients of the product as detailed in the impugned order of Commissioner (Appeals) for ready reference :- The said product contains following items:- (i) Mother-mix (containing fruit powder, vegetable extracts, emulsifying and stabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) permitted preservative and colours The total soluble solids w/w in the final product shall be not less than 10 per cent. The minimum percentage of fruit juice in the final product shall not less than 5.0 per cent w/w. 8. As is seen from the above Para A.61.01 defines the fruit juice which going by the dictionary meaning and the common parlance test conveyed that the same is liquid extract from fruit juice. The appellants have not claimed their product as fruit juice. In fact, fruit juice is supposed to be in liquid form whereas, appellant s product is in powder form. Further Para A.16.04 defines fruit squash, which means expressed juice of the sound ripe fruits. The appellants are not claiming their product as fruit squash. Para A.1605 defines the terms fruit drink, which has to be prepared from the fruit juice and water. The minimum percentage of fruit in the fruit drinks should not be less than 5%. The product in question cannot again called as fruit drink inasmuch as the same refers to a drink prepared from fruit juice and water. As such, we fully agree with the appellants that the above definitions relied upon by the lower authorities do not advance the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and various precedent decisions. 12. In addition, the appellants placed on record the following evidences, during the course of adjudication, before the Commissioner :- (a) A certificate dated 29.03.2003 from the ministry of Agriculture, Government of India, was placed on record wherein it has been categorically stated that the dry fruit content is equivalent to that found in a fruit squash. The product in diluted form conformed to all specifications of fruit squash, which was fit for human consumption. (b) An expert opinion dated 31.05.2003 of Prof. J.S. Pai from UDCT, Mumbai was placed on record, wherein it was opined that the product contains dry fruit powder and vegetable extract. The product is an instant squashy and drink can be prepared by adding water as in fruit squash drink. The only difference is that squash is in liquid form and Rasna Rozana Amrit is in powder form. (c) A test report dated 02.6.2003 issued by Public Health Laboratory, Ahmedabad Municipal Corporation, Ahmedabad was also placed on record, which opined that Rasna Rozana Amrit conformed to PFA specification with respect to the tests undertaken. (d) Labels of squash manufactured by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.01, the same would not fall under the heading 21.08, inasmuch as the same is a residuary entry. Chapter heading 20.01 covers the preparation of various products including preparation of fruit juices. As such, any preparation of fruit juice would fall under the said heading. The Assistant Commissioner has observed in Para 56.2 of his order and in fact, there is no dispute that the product is a combination of fruit powder, fruit extracts and vegetable extracts as principle ingredient and contains sugar, malic acid, dextrose, minerals and vitamins. The same has to be further dissolved in the water before it can be consumed. The product is also a preparation, which after dissolving in water is ready to be used. There is no percentage of fruit or fruit juice or vegetables required to be contained in the said product in terms of either the notes of Chapter 20 or any requisite requirement of heading 20.01. As such, according to us, the said heading appropriately covers the product in question. 15. The appellants have also submitted the evidences in the shape of certificates and expert opinion, which are to the effect that the product is an instant squash and drinks can be prepared b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uice never cease to be a fruit juice beverage and would, for all practical purposes, continue to remain as preparation of fruit. 18. While arriving at this conclusion, we gain support from? this Tribunal s decision in Northland Indus. v. CCE (supra) in which it was held that squash and cordials which are preparation of fruit juice are correctly classifiable under sub-Heading 2001.10. Further, in this context, we may also refer to the conclusion reached by the Hon ble Supreme Court in Hamdard (WAKF) Laboratories v. CCE, Meerut (supra) to the effect that only beverages that contained fruit or vegetable juices that fall under Heading 20.01 are excluded from Heading 22.02. 19. We, therefore hold that the product in question manufactured by the appellants are fruit preparations within the meaning of the tariff Heading 20.01 and are classifiable as such. We, therefore, set aside the impugned order of the Commissioner (Appeals) dated 22-6-94. The appeal is, accordingly, allowed. Similarly, in the case of Northland Industries vs. CCE 1988 (37) ELT 229 (Tribunal), while dealing with an identical issue observed that bare reading of heading 2001 it will be clear that preparations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preparations of fruit juices are not included. Since squash is a beverage and can be consumed after simple dilution with water, squashes and cordials are covered more specifically by the term beverages. As noted earlier, we are of the view that, in the light of Note 5(j) to Chapter 21, Heading No. 21.07 covers preparations for beverages and not beverages themselves. On the other hand, preparations of fruit juices are specifically covered by Heading No. 20.01. The appellants contention is that squashes are not syrups flavoured with fruit juices for all fruit squashes must contain, in accordance with law, a minimum of 25% fruit juice which is a substantial quantity and hence squashes cannot be treated as having fruit juices as flavouring agent. Nor are they manufactured out of concentrated fruit juices. 19. The Assistant Collector, in our view, is not right when he says that the word preparations in the entry in Heading No. 20.01 does not qualify the words fruit juices and vegetable juices, whether or not containing added sugar or other sweetening matter . This result flows from the arrangement of the words and punctuation s employed. Given this position, and having regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the manufacturer of the product in question, inasmuch as they have already entered into an agreement with M/s. Sabar Foods to manufacture the goods. Merely because they have supplied the raw material and machinery to M/s. Sabar Foods, will not make them the manufacturer when the goods are admittedly being manufactured by M/s. Sabar Foods. As such, confirmation of demand of duty against M/s. Waves Foods Pvt. Limited was not justified. While dealing with the above contention of the appellant, Commissioner (Appeals) has held as under :- 11.2. As regards the above I find that the factory for various Foods Beverage Products and its allied products where the disputed product Drink Mix is manufactured was set up by the Appellant No.1 (M/s. Wave), the raw materials and packing materials were procured by the Appellant No.1, the manufacturing activity was controlled and supervised by the persons of the Appellants No.1, the payment of electricity charges was the responsibility of the Appellants No.1. Further, the registration with the sales tax department was in the name of the Appellant No.1 (M/s. Wave) only. The selling of the entire production was made by the Appellant No.1. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellants was for the reasons that as the aggregate clearances value by M/s. Sabar Foods was below the small scale exemption limits, and as such no declarations was required to be filed. Further in the light of various decisions of Tribunal, referred supra, holding identical products to be falling under Chapter 20, there could be bonafide belief on the part of the appellants that no duty is required to be paid by them. As such, we are of the view that non filing of declaration etc. was on account of bonafide belief and there is no positive evidence reflecting on any malafide intention to evade payment of duty. In the absence of any positive evidence to that effect invocation of longer period was not justified. As such, we also hold that the demand to be barred by limitation. 22. Whether the appellants are entitled to the benefit of notification 08/2002 on account of their factory being located in rural area, as the facts in respect of the above submissions are not clear, we refrain from giving any decision on the above issue, as we have already extended the benefit to the appellants on the merits as also on limitation. 23. In view of the above, the confirmation of deman ..... X X X X Extracts X X X X X X X X Extracts X X X X
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