Customs, Excise and Gold Tribunal - Mumbai
Foods And Inns Ltd. vs Commissioner Of Central Excise on 10 February, 2000
Equivalent citations: 2000(71)ECC798, 2000(118)ELT486(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. The appellant manufactures powder of various fruits such as mango, banana, tomato and supplies them to its customers. The question for consideration in this appeal is whether these products were supplied in unit containers or not. The question is of significance because if they were supplied in unit containers the product would be classifiable under Heading 2001.10 of the tariff, if not at nil rate of duty applicable to residuary entry 2001.90 under which they fall. In the order impugned in this appeal, the Collector (Appeals) held that the goods had been supplied in unit container and confirmed the demand for duty issued to the appellant.
2. Heading 2001.10 is for preparation of vegetables, foods etc. specified in the main Heading 2001 put up in unit containers and ordinarily intended for sale." There is no dispute that the goods in this case are ordinarily sold. What is to be decided is whether the goods were put up in unit containers. The term "unit container" is defined in Section IV of the tariff as meaning "a container whether large or small (for examples, tin, can, box, jar, bottle, bag or carton, drum, barrel or canister) designed to hold a pre-determined quantity or number".
3. It is the first contention of the appellant that the pre-determined quantity or number referred to in this note applies to the determination to be made by the seller of the goods. In the case in question, the seller sold different quantities to different customers. He has not sold the pre-determined quantity and hence the goods are not sold in the unit container. We do not find it possible to accept this argument. When the seller sells the goods, he in fact determines the quantity of goods to be sold before they are actually sold. Every sale is therefore of a pre-determined quantity or number of goods. The only exception is where the quantity of the goods is not precisely known to the seller or buyer such as large quantity of scrap or goods which may be sold on what is called "as is where is basis." We are not concerned with such sales. Further, the note to the section refers to containers "designed to hold a pre-determined quantity or number." The container which is designed to hold such quantity therefore would be a unit except container in cases where the seller decides not to treat it as a unit container by packing in it the goods lesser than the quantity or number that the container is designed to hold. That is in fact the ratio of the Tribunal's decision in C.C.E. v. Himachal Pradesh Horticulture Produce Marketing & Processing Corporation Ltd., 1988 (34) E.L.T. 160. The Tribunal by a majority view held in that decision that apple juice concentrate which was sold by its manufacturer in carboys designed to hold particular quantity but contained a quantity less than that was not put up in unit containers. It specifically rejected the argument that it is sufficient to hold that the goods are sold in unit containers if they are sold in containers of uniform size designed to hold a particular quantity even such containers contained any quantity less than that.
4. Reliance is next placed upon the Tribunal's decision in Agro Foods Punjab Ltd. v. C.C.E., 1990 (49) E.L.T. 404 which, it is contended, has held that clearance of goods (fruit juice concentrate or tomato paste) in barrels or drums does not amount to sale of goods put up in a unit container. Agro Foods were clearing its goods in barrels and cans of 30 kgs, 56 kgs or 66 kgs capacity. The Tribunal appears to have gone by the reasoning that these goods packed in barrels are not put in unit container. It has also relied considerably on the decision in C.C.E. v. HPHPMPC. The packing in both cases is similar of not identical, carboys in HPHPMPC's case and barrels in Agro Foods Punjab Ltd. case; products are also very similar, fruit juice concentrate in both the cases, tomato paste also being a commodity in the later case. Quantities differed. The quantity sold by HPHPMPC is not clear. It could not have been in considerable, being sold in carboys.
5. We are not able to find from our understanding in C.C.E. v. HPHPMPC barrels are not unit containers. We have already indicated the reasoning which the Tribunal has to say that the goods were not sold in unit containers. There is certainly no reason that they were so because the goods were sold in carboys. On the other hand, the note to Section IV refers to "unit container" as meaning a container whether large or small specifically includes tin, can, box, jar, bottle, bag or carton, drum, barrel or canister. These terms are wide enough to enhance containers containing large quantities of goods. Nor is it possible for us to say as the Tribunal states the unit containers only is used to goods sold in retail. There is certainly some discussion of this aspect in the order of the third member which disolved the difference between the two other members in C.C.E. v. HPHPMPC. However, the conclusion is not based on that reasoning. If the intention were to consider unit container as being limited to container for goods sold in retail, the tariff would have said so. The fact that it refers to wholesale and not to retail sale is significant and cannot be overlooked. The other part discussed earlier that the note to Section IV includes containers such as drums and barrels which would hold quantities so large that they would not be ordinarily sold in retain is also of equal significance.
6. It is not contended before us that the goods which the container contained were lesser than those which the containers here and designed to hold unit containers. At the last hearing the details of containers in which the appellant sells his goods were not produced. We therefore directed the appellant to file an affidavit indicating this. The affidavit says that the goods were sold in bulk in quantity varying from 10 kg to 50 kg. Copies of the gate passes for the relevant period which were explained by the advocate as being representative gate passes are enclosed to the affidavit. These show the containers used were tins of 10 kg, 12.5 kg, 20 kg, 40 kg and 50 kg. We also find each of the gate pass shows the quantity of the contents is always the same as the quantity that the tin is designed to hold. The fact that there is more than one size of container does not mean that each of the container cannot be considered to be unit container. Each of them designed to hold a pre-determined quantity. The appellant has not shown that it sold these goods in such containers containing less than the pre-determined quantity that the container held. On the other hand, the gate passes produced before us confirm that they were such quantity. We therefore find no reason to interfere with the finding that the goods were sold in unit containers.
7. Appeal dismissed.