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1. The dispute involved in this appeal is of classification of two products, namely "maltodextrin" and "maltodex". Both these substances were forming part of the instant food preparations made by the appellants. Both products were made on hydrolysis of starch. Maltodex had Vitamin D-3 as one of the constituents. Maltodextrin was manufactured without such addition.

2. The appeal papers do not show when the product maltodextrin was first manufactured. It appears that in April, 1975 the department was advised of such manufacture. The jurisdictional Superintendent directed classification under tariff Item 15-C of the old tariff which was adopted under protest. In April, 1976 the sample of the product was drawn. In December, 1976 the Superintendent conveyed the opinion of the Dy. Chief Chemist that the product consisted of reducing sugars. It would appear that the goods in terms of this advice were classifiable under tariff item 1 of the then tariff. However, the Assistant Collector classified the product under Tariff Item No. 68 and even refunded duty earlier paid under Tariff Item 15C. This was because under Tariff Item 68 the benefit of Notification No. 118/75 was available on account of captive consumption of the goods. Up to the time of introduction of the new tariff this classification continued to prevail. After the introduction of the new tariff the assessee adopted classification under Chapter 19 but soon changed it to Chapter 29 (March, 1976). In August, 1986 the assessee claimed classification under Chapter 19 referring to a certificate given by the Drug Controller to the effect that maltodextrin was a bulk drug. Benefit of Notification 234/82 was claimed. Classification list was filed afresh. The sub-heading was changed from 29.42 to heading 29.13 in terms of budgetary changes in 1987. This was approved on 12-8-1987.

3. In April, 1988 the assessee stopped manufacture of maltodextrin and commenced manufacture of maltodex. In April, 1988 they claimed classification of maltodex under 19.01 holding that it was an end product covered under Notification 30/87. This classification was approved on 24-6-1988. In July, 1988 the officers visited the factory, recorded the statements of the technical employees of the assessee, seized stocks of maltodex and also infant food containing maltodex but latter released the same provisionally. The show cause notice was issued on 29-8-1988 alleging that both maltodextrin and maltodex were actually commercial glucose classifiable under subheading 1705.19. It was claimed that there was no difference between the two products. It was claimed that maltodextrin should have been classified under tariff item No. 1E of the old tariff and under sub-heading 1702.90 under the new tariff. It was claimed that by suppressing the fact that the goods were actually commercial glucose the assessee had taken unwarranted benefit of Notification 118/75 as also 234/86, It was pointed out that in certifying maltodextrin as bulk drug the PDA had deleted the words "BPC-49" from the certificate which fact was also suppressed from the department. It was alleged that the latter product maltodex was also similarly mis-classified. It was claimed that this enabled the assessee to take a wrong benefit of Notification 37/88. The assessee filed reply and also challenged the issue of the show cause notice in the High Court. Initially the proceedings were stayed. The petition was, however, dismissed by the High Court. The assessee's restoration application is pending but inspite of the pendency this appeal was pressed by the assessee.

4. The Commissioner heard the assessees. Subsequent to the hearing also the appellant continued to write to the Commissioner. In May, 1999 a test report dated 30-11-1992 was supplied to the present appellant which classified maltodex as other sugar. The appellant contested and requested for fresh drawal of samples. While this correspondence was on, the Commissioner passed the impugned order. He held that maltodextrin could not be classified as commercial glucose or liquid glucose inasmuch as the reducing sugar content expressed as dextrose therein was less than 20% and therefore would not merit classification under tariff item No. 1E of the old tariff. He classified it under tariff item No. 68 for the period September, 1983 to February, 1986 and dropped demand of Rs. 39,74,583/-. He then discussed the question of rnaltodextrin under the new tariff. He referred to the sub-notes given in the HSN which classified substances containing less then 10% of reducing sugar content under heading 35.05 and products containing more than 10% but less than 20% of such sugar under heading 17.02. He finalised classification under sub-heading 1702.29. He rejected the claim under Chapter 29 saying that maltodextrin was not a separate chemically defined organic compound. As regards maltodex he accepted the contention that maltodex and maltodextrin were different products. He referred to the test report of maltodex communicated to the assessee in January, 1993 and relying thereupon classified maltodex also under sub-heading 1702.29.

10. The Commissioner in his order in paragraph 63 has mentioned that although the assessee had applied for classification as bulk drug of "Maltodextrin-BPC", the authorities had issued the certificate for the bulk drug "Maltodextrin" and not "Maltodextrin BPC", He has referred to the same letter dated 29-10-1986. The show cause notice did not show the date of the certificate. The assessees have placed on record a certificate dated 29-7-1986. On perusal of this letter, we find that this belief of the learned Commissioner was not well founded inasmuch as the phrase BPC did appear in the certificate as also in the subsequent classification list. Therefore the belief of the Commissioner expressed in paragraph 64 that this amounted to mis-declaration and the benefit of Notification 234/86 was wrongly claimed cannot be sustained. In terms of the certificate the goods would merit classification under Chapter 29 as claimed by the assessee up to the time it was covered under the certificate and therefore the demand of differential duty from March, 1986 to March, 1988 does not survive both on limitation and on merits.