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TMI Blog2008 (7) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... Confectionery, Chocolates, Food Preparations containing Cocoa/Wafers Waffles falling under Chapter 17, 18 19 of the Central Excise Tariff Act, 1985. One of the products manufactured by it is called "MILKYBAR CHOO". The ingredients used in the manufacture of this product as shown in the wrapper are sugar, liquid glucose, milk solids, golden syrup, partially hydrogenated vegetable oils, cocoa butter, emulsifier (soya lecithin), colour, wheat protein, synthetic food colour and added artificial flavouring substances. The wrapper describes it Nestle Milky bar Choo-soft chewing fudge with white chocolayer. It is seen that the chocolayer is nothing but white chocolate. It is also seen that the fudge in the subject goods as well as white chocolayer are made up of the same ingredients. The appellant was clearing this product as sugar confectionery, not containing cocoa at a concessional rate of duty of 8% ad valorem vide Sl. No. 247 of Notification No. 6/2002-C.E., dated 1-3-2002, as amended and Sl. No. 16 of Notification No. 3/2006-C.E., dated 1-3-2006. 3. It appeared that the composition of the impugned goods conforms to the definition of 'White Chocolate' as per HSN Notes to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 257 (T) (iv) Food Specialities Ltd. v. Union of India - 1991 (51) E.L.T. 310 (P H) which has been upheld by the Hon'ble Apex Court as reported in1998 (97) E.L.T. 402 (S.C.) 7. Countering the arguments of the ld. Counsel for the appellant, Shri K.M. Mondal, the ld. authorized representative of the revenue submitted that the disputed product i.e. Milkybar Choo is a White Chocolate notwithstanding the fact that it contains partially hydrogenated vegetable oils. Referring to the HSN Chapter Note to Chapter Heading 18.06, he submitted that Chocolate may contain vegetable oils. He also submitted that any dispute with respect to classification of any product has to be resolved on the basis of its description under the relevant chapter heading/sub-heading read with relevant Chapter Notes, if any, of the Central Excise Tariff which is based on the internationally accepted Harmonised System of Nomenclature (HSN). In support of this submission, he relied upon the Apex Court's decision in CC, Bombay v. Business Forms Ltd. - 2002 (142) E.L.T. 18 (S.C.). Shri Mondal also submitted that definition of 'Chocolate' in the Prevention of Food Adulteration Rules, 1955 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 16 1704.90 Sugar confectionery (excluding white chocolate), not containing cocoa 8% - 10. From the above, we find that White Chocolate has been excluded from the purview of the notification. We have, therefore, to see whether the impugned goods, namely, Milkybar Choo are White Chocolate or sugar confectionery. The main thrust of the arguments on behalf of the appellant was that the impugned goods, namely, Milkybar Choo is not White Chocolate as it contains partially hydrogenated vegetable oils as one of its ingredients. As 'per definition of Chocolate in the Prevention of Food Adulteration Rules, 1955, Chocolate shall not contain any vegetable fat other than cocoa butter. Since White Chocolate is one of the varieties of Chocolate and it contains partially hydrogenated vegetable oil, it cannot be marketed as White Chocolate. Hence the impugned goods cannot be treated as White Chocolate for the purpose of the Central Excise Tariff and SI. No. 16 of Notification No. 3/2006-C.E. Ld. Counsel heavily relied upon the Tribunal's decision in Little Star Foods Pot. Ltd. v. CCE - 2006 (199) E.L.T. 451 (T) which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he disputed product in this case was called Kit-Kat. The revenue sought to classify this product under heading 18.03 as chocolates in any form, while the appellant claimed its classification under heading 19.05 of the Central Excise Tariff. 14. After detailed examination of the relevant Tariff entries under Chapter 18 19 of the Central Excise Tariff vis-a-vis the HSN Explanatory Notes, the Tribunal held that by applying these notes, these goods will be classifiable under heading 19.05 irrespective of the proportion of the chocolates by weight or value. For the sake of convenience and proper appreciation, we reproduce herein below paras 10 11 of the Tribunal's order in Nestle ( India ) Ltd. "10. In the light of this correspondence reference to the explanatory note in deciding the scope of the tariff is justified. The Supreme Court stated in paragraph 18 of its judgment CCE v. Wood Craft Industries Ltd. (1995 (77) E.L.T. 23) that the structure of the Central Excise Tariff is based on the internationally accepted nomenclature in the HSN and therefore dispute relating to tariff classification must, as far as possible, be resolved with reference to the nomenclatu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same under sub-heading 1905.31 as wafer coated with chocolate or containing chocolate as against the assessee's claim for classification under sub heading 1905.90 as it contains vegetable oil. The Commissioner (Appeals) accepted the assessee's claim. Against this order of the Commissioner (Appeals), the revenue preferred an appeal to the Tribunal. The Tribunal upheld the order of the Commissioner (Appeals) rejecting the revenue's contention that the classification of the product should be based on HSN Explanatory Notes and that the PFA Rules are not relevant for that purpose. We observe that this decision is per incuriam inasmuch as the Tribunal has not noticed the judgment of the Hon'ble Bombay High Court in the case of Kaira Dist. Co-op. Milk Producer's Union Ltd. v. Union of India - 1989 (41) E.L.T. 186 (Bom) holding that for purposes of classification of food, resort to the definition of food contained in the Prevention of Food Adulteration Act is wholly unjustified. That Act deals with entirely a different subject. It is not a part of the family of the same laws, i.e. Indian Tariff Act, 1934. In view of this, the Tribunal's decision in Britannia Industries Ltd. will hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Industrial Disputes Act, 1947. In para 4 of the judgment, the Hon'ble Supreme Court held as follows: "4. The expression 'industry' has many meanings. It means 'skill', 'ingenuity' 'dexterity', 'diligence', 'systematic work or labour', 'habitual employment in the productive arts', 'manufacturing establishment' etc. But while construing a word which occurs in a statute or a statutory instrument in the absence of any definition in that very document it must be given the same meaning which it receives in ordinary parlance or understood in the sense in which people conversant with the subject matter of the statute or statutory instrument understand it. It is hazardous to interpret a word in accordance with its definition in another statute or statutory instrument and more so when such statute or statutory instrument is not dealing with any cognate subject. Craies on Statute Law (6th Edn.) says thus at page 164: "in construing a word in an Act caution is necessary in adopting the meaning ascribed to the word in other Acts." it would be a new terror in the construction of Acts of Parliament if we were required to limit a word to an unnatural sense because in some Act which is not i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of that statute. Even where the definition on per se may be in pari inateria with a definition given in another statute, the interpretation given in the context of one statute can have only persuasive value in interpretating the definition in another statute for the obvious reason that each definition has to be seen and interpreted in the context of the legislation in which it occurs and each definition has to be read as part of the main legislation where it occurs and not in relation to another piece of legislation." 22. Having regard to the foregoing rulings, we are unable to accept the appellant's contention that since 'Milkybar Choo' does not conform to the definition of 'Chocolate' in the P.F.A. Rules, 1955, it cannot be considered to be 'White Chocolate' for the purposes of classification under the Central Excise Tariff Act and Sr. No. 16 of the Notification No. 3/2006-C.E., dated 1-3-2006. 23. We find that HSN Note to Chapter heading 18.06 gives composition of chocolate as follows: "Chocolate is composed essentially of cocoa paste and sugar or other sweetening matter, usually with the addition of flavouring and cocoa butter; in some cases, cocoa powde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Brock. Advantages : Delicious blend of white chocolate and fudge. Disadvantages: They do' not last very long." 27. From the above web materials, it is clearly established that the appellant not only recognizes 'Milkybar Choo' as 'white chocolate' but also sells it in the market as 'white chocolate'. 28. The contention of the appellant that 'Milkybar Choo' cannot be called 'white chocolate' because it contains partially hydrogenated oils is already disproved by the HSN notes to Chapter heading 18.06. The fact that 'white chocolate' may contain hydrogenated fats is also established from the independent web material, Wikipedia, the free encyclopedia (page 95 of the Paper Book). This web material, inter alia, says as follows "Some "white chocolate" is made from inexpensive solid or hydrogenated vegetable fats, and as such, is not at all derived from cacao. These preparations may actually be white in color (in contrast to white chocolate's ivory shade) and will lack cocoa butter's flavor". 29. Ld. Counsel for the appellant made a submission that earlier the appellant was not using partially hydrogenated vegetable oil in 'Nestle Milkybar', another product manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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