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2009 (12) TMI 786 - CESTAT BANGALOREClassification of imported flavour compounds - classified under CTH 33.02 or 33.01 - benefit of N/N. Sl. No. 119 of Notification No. 21/02-Cus., dated 1-3-02 - Held that: - On a careful reading of the exclusion clause of the notification, it would be clear to qualify for exemption three conditions are to be satisfied i.e., (i) it should be a compound, (ii) it should also be of a kind used for the manufacture of beverages and (iii) the same should have an alcoholic strength by volume exceeding 0.5 percent determined at 20 degrees centigrade. Thus, even though there is no specific mention or explanation either in the chapter heading 33.02 or Section Notes/Chapter Notes in the Customs Tariff from the exclusion clause in Notification No. 21/2002-Cus., dated 1-3-2002, it could be made out as to what the item ‘compound alcoholic preparation’ is - In the instant case M/s GIPL fairly admit in their reply dated 28-2-2007 that the alcoholic strength by volume in the imported flavours in question is exceeding 0.5% and such flavours are used for the manufacture of beverages. However they claim that the Customs exemption Notification No. 76/86-Cus., dated 17-2-1986 explains about “the compound alcoholic preparations”. There is no doubt that the flavours in dispute comprise of two or more elements, to call them “a compound”. Further, M/s. GIPL have admitted that such flavours are used in beverage industry and the alcoholic strength therein by volume exceeds 0.5%. Accordingly the imported flavours in this case satisfy all the criteria to call them compound alcoholic preparations. M/s GIPL have not advanced any other argument to substantiate their claim that the imported flavours are not compound alcoholic preparations. The imported flavours impugned in the show cause notice are compound alcoholic preparations and the same are not entitled to concessional rate of duty as provided in Notification No. 21/2002-Cus., dated 1-3-2002 and accordingly, M/s GIPL are liable to pay the differential duty in respect of those flavours. Commissioner may examine if the appellant was aware of the misdeclaration involved and yet did not bring the same to the notice of the authorities and facilitated misdeclaration of the description of the goods - appeal allowed by way of remand.
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