Indian Kanoon - Search engine for Indian Law

5. Common parlance also recognizes, in view of the affidavits of Mrs. Malti Jagasia, housewife, Mr. Ashok Patel, partner of Alka Stores (Trader) and Mr. Dilip Jain, partner of Mahavir Trading that the product in question is a preparation in the nature of instant food mix similar to other food mixes like Rasam mix, Vada mix, idli mix etc. It is also noted that under the provisions of Gujarat Sales Act, 1969, the product is classified as article of good and tax being paid accordingly.

6. The Revenue relies upon the judgment of the Apex Court in CCE v. Parle Exports(P)Ltd. 1988(38)ELT 741(SC) to contend that the product in dispute is not in the nature of food mix. The first thing to be noted is that the product in that case was non alcoholic beverage bases and the question before the Supreme Court was whether non alcoholic beverage is a food product or food preparation covered in terms of Notification No. 55/75-CE dated 1.3.75. The product under consideration was for use in Industry and was for an industrial purpose for manufacturing aerated waters and could not be consumed directly by consumers and only aerated waters manufactured out of beverage base could be consumed. However, as far as the product in the present case is concerned, it is used by consumers directly and is not sold to industry for the purpose of manufacturing goods which in turn is sold to consumers. It is pertinent to note that the product under consideration in the Parle Exports(P)Ltd. supra contained no fruit or ingredients having nutritive value and is mostly made of chemicals, whereas, in the present case, the product in question contains oils extracted from fruits, vegetables, plants as well as lactose, dextrose etc.

8. During the period covered in the present appeal, the Central Excise Tariff was aligned with HSN whereas this was not the position during the period covered in the Parle Exports(P)Ltd.

9. We also note that during the relevant period, the product in dispute was being classified under ITC (HS) classification under Exim Code 21.06 covering food preparations not elsewhere specified or included. The Exim Code No. 210690 01 specifically covered soft drink concentrates as food preparation not elsewhere specified. It is also brought to our notice that with effect from 2005-06, a specific tariff item covering food preparations not elsewhere specified or included has been incorporated and soft drink concentrates are covered under that heading. In fact, at present, the assessee is clearing the goods classifying the same under CET sub-heading 2106 90 11.

10. For the above reasons, we agree with the respondents herein that Rasna Soft Drink Concentrates can be considered as being in the nature of food preparation and in the nature of instant food mix eligible to the benefit of exemption as per Sr. No. 7 of the Table to Notification No. 5/98-CE.

11. We, therefore, see no reason to interfere with the impugned order and accordingly uphold the same and reject the appeal.

12. I have carefully perused the order recorded above but I am unable to persuade myself that the arguments relied upon are sound enough to deviate from the Honourable Supreme Court's decision in the case of Parle Exports (cited supra) holding that non-alcoholic beverages are not food products or food preparations. Non-alcoholic beverages can be either aerated (such as Limca) or non-aerated. Rasna is nothing but a non-alcoholic beverage and hence cannot be treated as a food product or food preparation following the aforecited decision of the Honourable Supreme Court. Consequently, Rasna soft drink concentrate cannot be treated as instant food mixes. In my view, the ratio of the Honourable Supreme Court's decision does not become inapplicable merely because it dealt with a concentrate which is used industrially and Rasna concentrate can be used in the household. What is important is the end product which is a non-alcoholic beverage and that has been held by the Honourable Supreme Court to be not a food product or a food preparation. Hence, the concentrate cannot be considered to be an instant food mix. Similarly, presence of a small amount of dextrose/lactose as a sweetener does not change the character of the beverage. After all, it is not anything like glucose powder, which is used in the case of depletion of energy due to intense sporting activity/exhaustion. I am also of the view that a few stray favourable affidavits collected and filed by an interested party is not a sure way of meeting the common parlance test and overcoming the ratio of a carefully considered decision of the Honourable Supreme Court, which has held that an average Indian will not treat non-alcoholic beverage bases as food products/preparations. I am also of the view that ratio of such a decision rendered in the context of one exemption is equally applicable in the context of another.

13. I also find that the lower appellate authority has not taken into account the observations of the Honourable Supreme Court in the case of Parle Exports (cited supra) to the effect that expressions in the exemption notifications should be understood by the language employed therein bearing in mind the context in which the expressions occur, that the words used in the provision imposing taxes or granting exemption should be understood in the same way in which these are understood in ordinary parlance, that an exception to the general rule of taxation is to be construed strictly against those who invoke the benefit and that absurd results of construction should be avoided.