Custom, Excise & Service Tax Tribunal
Parsi Dairy Farm vs Commissioner Of Central Excise on 1 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT No. I Appeal No. E/3206/05 (Arising out of Order-in-Appeal No. BR(2859)241/MI/2005 dated 05.08.2005 passed by Commissioner of Central Excise (Appeals) Mumbai I) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) ================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
Parsi Dairy Farm Appellant Vs. Commissioner of Central Excise Mumbai I Respondent Appearance:
Ms. Asha Bambani, Advocate for appellant Shri A.B. Kulgod, Asst. Commr (AR) for respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) Date of Hearing: 01.09.2016 Date of Decision: 01.09.2016 ORDER NO Per: M.V. Ravindran This appeal is directed against order-in-appeal No. BR(2859)241/MI/2005 dated 05.08.2005.
2. Heard both sides and perused the records.
3. On perusal of the records, it transpires that the issue involved in this case is regarding the classification of Kulfi manufactured by appellant. Appellants case is that the said product falls under Chapter Heading 0404.00 while the case of Revenue is that the said product merits classification under Chapter Heading No. 2105.00 of Central Excise Tariff Act, 1985 during the period 2003 04. Both the lower authorities have held that the product merits classification under C.H 2105 as ice cream and hence not eligible for small scale industries exemption Notification.
4. After considering the submissions made by both sides, we find that in order to appreciate the claim of both sides the relevant Tariff Heads 0404 and 2105 needs to be looked into. If the claim of the department that Kulfi is classifiable as ice cream then Kulfi will merit classification under ice cream on the reasoning that ice cream is also product of milk and under Prevention of Food Adulteration Rules and Act, ice cream is obtained from cow/buffalo milk and combination thereof with or without addition of other various ingredients sugar, crushed almonds, pistachio etc. It is the case of the appellant that Kulfi is nothing but a product of milk which is heated till it reduces to a volume of 50%, flavor and sugar and various other ingredients are added to it and the same is frozen. It is also the submission that once the classification of the product kulfi falls under 0404.00, the rate of duty is nil hence there is no classification of exemption of small scale industries. On perusal of the records we note that the CH 0404 of the Central Excise Act is applicable in the case in hand as it is undisputed that the Kulfi is milk product and the manufacturing process of kulfi are explained by the appellant before the lower authorities is also not disputed. It is to be noted that the Tribunal was considering similar issue in the case of Nestle (I) Ltd - 2001 (132) ELT 134 (Tri.) wherein the Tribunal was considering the classification of Nestle Milkmaid Kesar Kulfi Mix, Nestle Milkmaid whether falls under Chapter Heading 0404 or Chapter sub-heading 2108.90 after considering the entire gamut and also the ingredients in the product Nestle Milkmaid and Kulfi mix, Bench after considering the Explanatory note to HSN held that Nestle Milkmaid and Kulfi would fall under Ch. 04.04. In our considered view if the kulfimix which is a dry powder merits classification under CTH 0404, then Kulfi manufactured by appellant which is ready to consume would definitely merit classification under 0404.
4.1 The findings of the Tribunal in the case of Nestle India Ltd. (supra) are very relevant which we reproduce:-
9. As per HSN, Chapter 4 therein will cover dairy products like milk cream,? butter milk, curdled milk and cream, yogurt, kephir and other fermented or acidified milk and cream, whey, products consisting of natural milk constituents, not elsewhere specified or included, butter and other fats and oils derived from milk, cheese and curd. HSN further goes on to state that the dairy products may contain small quantities of stabilising agents, small quantities of anti-oxidants, small quantities of chemicals necessary for their processing or anticaking agents. Heading 04.01 may contain additives. Heading 04.02 may contain small quantities of starch not exceeding 5% by weight. Heading 04.03 can have added sugar or other sweetening matter, flavourings, nuts, fruit or cocoa. Heading 04.04 states that the milk product may also contain added sugar or other sweetening matter.
10. Ingredients of the three products with which we? are concerned do not contain any material, which will take the said product out of goods falling under Heading 04. 04. The dried corn starch in two products constitutes 3.7% by volume. Starch contents up to 5% will not take out the product from Heading 04.04. In other words, the presence of starch below 5% sugar, almond bits, pistachio bits or saffron bits cannot take the subject goods outside the purview of Heading 04.04. 4.2 In view of the foregoing, we find that the impugned order is unsustainable and liable to be set aside. We hold that the classification of the product Kulfi manufactured by appellant is under Chapter Heading 0404.00. The impugned order is set aside and the appeal is allowed with consequential relief, if any.
(Order pronounced in Court) (C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial) nsk 1 5 Appeal No. E/3205/05