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Heading No. Sub-heading No. Description of Goods Rate of Duty Basic Additional 17.04 Sugar confectionary (including white chocolate) not containing coca 1704.10
- Gums, whether or not sugar coated (including chewing gum, bubble gum and the like) 16% 1704.90
- Other 16%

2. The appellants contest that they used gaur gum only in very small quantities as a stabilizer and the products so manufactured cannot be considered as chewing gum and bubble gum and the like. They plead that only sugar confectionary similar to chewing gum and bubble gum will be classifiable under sub-heading 1704.10. They argue that the product is not known in the market as gums nor are they similar to chewing gum or bubble gum. They pointed out that gaur gum is used in the food industry as stabilizer and thickener to retard crystal formation as in ice cream (ice crystal) as thickener in sauces etc. They further argue that these confectionary items do not have chewable characteristics like chewing gum. They submit that in chewing gums the gum base is about 12% to 14% and the gum is not gum Arabic. (They submit that in their case the percentage of gum Arabic is only 1%.) The gum base in bubble gums cannot be swallowed and digested. After chewing, the gum portion of such items has to be thrown out whereas in the case of sugar confectionary manufactured using gaur gum there is no gum left in mouth after it is slowly dissolved in saliva. The full quantity is dissolved in mouth and enters the digestive system. They rely on the decision of the Tribunal in the case of Hari Chand Shri Gopal Vs. CCE, Meerut - 1996 (83) ELT 281 and emphasize that the expression and the like used in sub-heading 1704.10 restrict the coverage of the entry and the products which cannot be chewed resulting in residue of gum, will not be classifiable under 1704.10. They submit that in their case the percentage of gum Arabic was only 1%. They also argue that the demand issued on 13.2.2008 demanding duty for the period 1.3.2003 to 28.2.2005 is barred by limitation. The appellant submits that they have been filing declaration under Rule 173B regularly every year and the products manufactured by the appellant have been regularly mentioned in the market. The commodity manuals which was published by CBEC during the time when old Tariff was in force treated only chewing gums and bubble gums in the category of gums. Therefore, they were classifying the products based on established products and mentioning declaration based on bonafide belief before the Central Excise authorities.

4. The counsel points out that after the period to which this case relates the issue has lost relevance because the rates of duty for both types of product have become the same.

5. The learned AR points out that use of gum in the product stands admitted by Shr. J. Sankaran, Quality Manager and by Shri.K. Subramanian ManagerFactory Accounts. He argues that sub-heading 1704.01 does not specify the percentage of gum that should be present in the product to merit classification in the heading. The description of the goods covered by this heading is amplified by the expression including chewing gum, bubble gum and the like. This cannot mean that the heading is restricted to goods like chewing gum and bubble gum only. He argues that the heading will cover all sugar confectionary containing gum like the impugned goods.