Customs, Excise and Gold Tribunal - Mumbai
Kellogs India Ltd. vs Commissioner Of Central Excise Mumbai ... on 19 March, 2001
Equivalent citations: 2001(78)ECC209, 2001(132)ELT325(TRI-MUMBAI)
ORDER
Gowri Shankar, Member (Technical)
1. The appeal is taken up for disposal, after waiving deposit of the duty demanded with the consent of both sides.
2. The question for consideration in this appeal is the classification of a product manufactured by Kellogs (India) Ltd., the appellant before us described as Chocos. The product, we are told, is essentially wheat flakes coated with cocoa and sugar. The manufacturer had claimed classification of this product under heading 19.04 of the tariff. This heading read thus:
"Prepared foods obtained by the swelling or roasting of cereals or cereal products (for example, corn flakes); cereals (other than maize (corn), in grain form or int he form of flakes or other worked grains (except flour and meal), precooked, or otherwise prepared, not elsewhere specified or included".
3. Note 2 to Chapter 19 proves that heading 19.04 does not cover preparations containing more than 6% by weight of cocoa calculated on a totally defatted basis or coated with chocolate or other food preparations containing cocoa of Chapter 18.04. This heading is for "Other food preparations containing cocoa".
4. The chemical test by the department of the product showed that it contained more than 6% by weight of cocoa calculated on a totally defatted basis. The notice dated 14.12.1999 issued to the appellant which has resulted in this appeal, relied upon this test report for its proposal to classify this product under heading 18.04. It also suggested, although not very clearly, that the product was covered with chocolate and hence classifiable under heading 18.04. The appellant had been communicated by letter dated 31.3.1999 of the Superintendent the conclusion of the Deputy Chief Chemist to the effect that the percentage of cocoa was in excess of 6. In its letters to him, the appellant had asked for a copy o the test report of the Deputy Chief Chemist, pointing out that only an extract had been furnished to it. The department replied saying that the complete report had been communicated to the appellant. In the reply filed to the show cause notice, the appellant had again questioned the correctness of the Deputy Chief Chemist's report. It referred to letters form the Central Food Technological Research Institute of Mysore (CFTR for short) and SGS India Ltd., a testing an inspection company. The CFTR informs the appellants that there is no standard method available to determine the cocoa content in cocoa based products, and that a conclusion only be drawn by determining the theobromine content in the cocoa powder that is used. SGS (India) Ltd informed the appellant that due to non-availability of a proper method, so far, it was unable to carry out the test required by the appellant. Although the letters written by the appellant to these two organisations are not produced before us and not available in the file, it appears reasonable to conclude from the tenor of the reply that what was asked for was availability and efficacy of methods for determination of the cocoa content in foods.
5. Where the classification of a commodity depends upon its corresponding to a specified chemical composition, the manufacturer is entitled to be told the methodology of analysis by which the department concludes that the product conform to the composition on the basis of which the classification is proposed. We agree that the reply to the show cause notice does not specifically say this, but the intention in that reply, referring to "cross objection and cross verification" of the test report and the repeated insistence upon the copy of the test report, make clear the manufacturer's desire to be informed the methodology of the test and parameters adopted by the department to come to the conclusion that the product contain a particular percentage of cocoa. In any event, a specific request was made to the Commissioner (Appeals) for cross-examination of the Deputy Chief Chemist. The fact that CFTR, the premier food research institution of the Government suggest that it was unable to directly determine the cocoa content emphasises the need that the appellant was asking for this information.
6. We are therefore of the view that the appellant should be indicated the methodology by which the Deputy Chief Chemist concluded the cocoa content to be ins excess of 6%. After this communicated to the appellant, if it desires to cross-examine the Deputy Chief Chemist, that should also be permitted. After doing so and giving the appellant and the department an opportunity to produce evidence, the classification should be decided afresh.
7. Accordingly, we allow the appel, set aside the impugned order and remand the matter to the Deputy Commissioner for passing appropriate orders in accordance with law.