Customs, Excise and Gold Tribunal - Delhi
Reckitt And Colman Of India Ltd. vs Collector Of C. Ex. on 27 March, 1998
Equivalent citations: 1998(103)ELT138(TRI-DEL)
ORDER Lajja Ram, Member (T)
1. These are two appeals filed by M/s. Reckitt & Colman of India Ltd. ('RCI for short), being aggrieved with the common order-in-appeal dated 24-8-1989 passed by the Collector of Central Excise (Appeals), Calcutta. The matter relates to the eligibility of the product Robinson's Nutran Nutritional Food Supplement ('NUTRAN' for short), to the benefit of exemption Notification No. 17/70-C.E., dated 1-3-1970. The Assistant Collector of Central Excise had by his order dated 5-11-1986 held that the nutran was a food product prepared with the basis of flour and was classifiable under Item No. 1B of the erstwhile Central Excise Tariff, and was covered by serial No. 14 of the Schedule to the Notification No. 17/70-C.E. In another appeal the classification of the product of Fodder Husk was determined by the Assistant Collector of Central Excise under his Order-in-Original dated 2-2-1987 as under sub-heading No. 2301.00 of the Central Excise Tariff. The classification of nutran was settled under sub-heading No. 1901-19 of the new Central Excise Tariff. The Collector of Central Excise (Appeals) observed that the nutran was based on starch (barley powder) and that the same was not eligible for exemption under Notification No. 17/70-C.E. Under the new Central Excise Tariff, he confirmed the classification under sub-heading No. 1901.19 in so far as nutran was concerned, and under sub-heading No. 2301.00 for Fodder Husk.
2. The matter was posted for hearing on 5-2-1998. The appellants have prayed for decision on merits on the basis of their written submissions. In their written submissions they had admitted that the nutran was predominently a preparation of barley powder. Reference had been made to the classification of their another product Robinsons' Patent Barely whch was considered by the-Tribunal as a preparation with a basis of flour and not a preparation based on starch. The Hon'ble Supreme Court had allowed the appeal filed by RCI against the Tribunal's findings that the product Robinsons' Patent Barley fell outside the ambit of the exemption Notification No. 17/70-C.E. No mention had been made of the product Fodder Husk in these written submissions.
3. Shri Satnam Singh, SDR, submitted that Nutran was a especially prepared food preparation and it was covered by the dutiable items under Notification No. 17/70-C.E. He referred to the observations and findings of the adjudicating and the appellate authorities and pleaded that a correct view has been taken by the appellate authorities.
4. We have carefully considered the matter. The product Nutran had been described by the appellants as a Nutritional Food Supplement as under:
"Easy to digest nutritional food supplement."
Its use was recommended as under :
"Nutran is recommended as a nutritional supplement during convalscence; prolonged debilitating conditions and fever; digestive disorder and where bland diet may be required; special conditions, such as, child growth, old age, pregnancy, lactation etc."
According to the analysis made by the Chemical Examiner, Customs House Laboratory, Calcutta, the product 'Nutran' is described as under :
"...soft white fine powder and is based on starch (barley powder). It contains carbohydrate, protein, fat together with salt calcium, iron and other ingredients. It is a food preparation."
Before the adjudicating authority, the appellants had contended that the nutran contained starch as a natural ingredient and could not considered as a preparation with a basis of starch. Reference was made to the classification dispute with regard to their another product Robinson's Patent Barley. The Assistant Collector of Central Excise, Calcutta, who adjudicated the matter held that nutran was covered under serial No. 14 of the Schedule under Notification No. 17/70-C.E., dated 1-3-1970 and was chargeable to duty under Item No. IB of the erstwhile Central Excise Tariff.
5. Under the new tariff effective from 1-3-1986 also, the Assistant Collector of Central Excise, Calcutta, observed that the assessee did not put any argument against the classification of nutran under sub-heading No. 1901.19 of the Central Excise Tariff as proposed in the show cause notice. As regards fodder husk, it was found mat this product was obtained from milling of cereals and was correctly classifiable under sub-heading No. 2301.00 of the Central Excise Tariff. Before the Collector of Central Excise (Appeals), the issue of classification of nutran was not pressed but exemption under Notification No. 17/70-C.E. was claimed. The appellate authority referred to the submissions of the appellants before the adjudicating authority that the nutrain contained starch as a natural ingredient and confirmed the view taken in the order-in-original passed by the Assistant Collector of Central Excise, Calcutta. With regard to the fodder husk also, he referred to Chapter Note 2 of Chapter 11 and confirmed the classification under sub-heading No. 2301.00 as settled by the Assistant Collector of Central Excise, Calcutta.
6. The main contention of the appellants is that, the nutran was a product prepared with a basis of barley powder and was not a preparation on tha basis of flour. As regards fodder husk, it had been pleaded that it was not a product of the milling industry, but a waste of the milling industry and hence will not come within the purview of Chapter 23 of the Central Excise Tariff.
7. Notification No. 17/70-C.E., dated 1-3-1970 had a list of dutiable goods falling under the then Item No. IB of the erstwhile Central Excise Tariff, broadly described as prepared or preserved foods. Entry No. 14 of the Schedule in the notification reads as under:
" Preparations with a basis of flour, of starch, of malt extract, or of malted barley and milk foods, which, by simply mixing with, or boiling in milk or water, can be used for making beverages invalid foods and gruels, whether or not containing cocoa, but excluding baby foods, that is to say, foods specially prepared for feeding of infant".
8. Flour for common man in our country is known as 'Atta'. The flour mill is the atta chakki. The flour could be of wheat or of other cereals like maize (makka), barley, etc. The typical percentage composition of barley vis-a-vis other cereal grains as given in the publication "Food Science", Second Edition by Norman N. Potter, Ph.D., The AVI Publishing Company incorporated, at page 463 is as under :
TYPICAL PERCENTAGE COMPOSITIONS OF CEREAL GRAINS ____________________________________________________________________________ Grain Moisture Carbohydrate Protein Fat Indigestible Calories Fiber (Per 100 Gm) _____________________________________________________________________________ Corn 11 72 10 4 2 352 Wheat 11. 69 13 2 3 340 Oats 13 58 10 5 10 317 Sorghum 11 70 12 4 2 348 Barley 14 63 12 2 6 320 Rye 11 71 12 2 2 321 Rice 11 65 8 2 9 310 Buckwheat 10 64 1 2 11 318 _______________________________________________________________________________ Barley, among others, is also used to produce barley malt. For this purpose, the whole barely seed is steeped in water to allow the live germ to sprout. The sprouted barley having initiated growth now becomes much increased in exzymatic activity, especially starch-digesting amylase activity. The sprouted barley is next dried under mild heat so as not to inactivate its enzymes. The sprouted dried barley known as malt adds flavour to breakfast cereals. (refer pages 476-477 of the publication "Food Science", referred to above).
9. The preparation which the appellants had referred to as barley powder is nothing but barley flour. There is no qualification in the Notification No. 17/70-C.E. that the flour could not be of barley.
10. As regards the product Fodder Husk, Chapter 23 of the tariff covers residues and wastes from the food industries; prepared animal fodder. Subheading No. 2301.00 covers the following:
"Residues and waste from the food industries, including bagasse, other waste of sugar manufacture and oil cakes."
Chapter 11 covers products of the milling industry; malt; starches; inulin; wheat gluten. Products from the milling of barley were classifiable under Chapter 11 only when they have by weight on the dry product, with a starch content exceeding 45% and an ash content (after deduction of any added minerals) not exceeding 3%. If not covered by this description, then the product were classifiable under Chapter 23 of the Tariff. The product is not a product of milling industry but fodder husk which is clearly covered by Chapter 23 of the Tariff.
11. The products before the Hon'ble Supreme Court in the appellants' case were pearl barley, purity barley and Robinson's Patent Barley. The products before us are Robinson's Nutran Nutritional Food Supplement and Fodder Husk. These products are in no way akin to pearl barley, purity barley and Robinson's Patent Barley.
12. Taking all the relevant facts and considerations into account, we do not find any material to interfere with the view taken by the Collector of Central Excise (Appeals), Calcutta, in these matters. There is no merit in both these appeals and the same are rejected.