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M/s Abbott Healthcare Pvt Ltd, S.K. Enterprises Versus Commissioner of Customs (General & CFS, Mulund) , Mumbai

2015 (10) TMI 1021 - CESTAT MUMBAI

Classification of Goods – Goods under issue are nutritional powder which is a proprietary food - Appellant contends the classification of goods imported under Customs Tariff Heading 1901 and the classification claimed by the appellant is 19019090 - Revenue contends that the said product shall be classified under Customs Tariff Heading 2106 and seeks to classify the same under Chapter Heading 21069099.

Held That:- Products having preparations predominantly of milk powder would merit cl .....

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set aside and appeal allowed – Decided in favour of the Appellant. - Appeal No. C/89394/2013, C/89395/2013 & C/85233/2014 - Final Order Nos. A/1137-1139/2015/CB - Dated:- 8-4-2015 - M V Ravindran, Member (J) And P S Pruthi, Member (T) For the Appellant : Shri T. Vishwanathan, Adv For the Respondent : Shri Ahibaran, Addl. Commissioner ( A. R. ) ORDER Per M V Ravindran This appeal is directed against Order-in-Original No. 114/2013/CAC/CC(G)/PKA/CFS/MI dt. 31.8.2013. Connected Appeal No. C/89394/ .....

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are classifiable under CTH/CETH 19019090 claiming the concessional BCD as being supplies from AIFTA Country of Origin under Notification No. 46/2011 (Sr. No. 158) as the goods were covered by the country of Origin Certificate issued by Director General of Customs, Singapore. The goods covered under the Bill of Entry was cleared in RMS; after the out of charge was given, the Customs authorities noticed that the actual trade name of the goods on the container was Mama's Best Premium Chocolate .....

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contested the issue on merits and limitation before the adjudicating authority. The adjudicating authority after following the due process of law did not agree with the contentions raised by the appellant, accordingly confirmed the demands raised with interest and imposed various penalties. 3. The Ld. Counsel would take us through the entire records and also the CETH 19019090 and 21069099. He would submit that the present proceedings are in correctly held against the appellant as the Chapter Hea .....

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included. He would produce before us the sample pack of the goods imported and take us through the labels on the container and submitted that it contains non-fat dry milk, lactose and various other ingredients like cocoa powder, minerals etc., he would also submit that the appellant had informed the Assistant Commissioner of Customs CFS Mulund, Mumbai by a letter dt. 6.6.2012 that the main ingredients of the product are Skim Milk Powder (64.7%), Lactose (15.2%), Sucrose (12%), Cocoa Powder (2.5 .....

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product being imported is used for dietetic purpose and hence correctly classifiable under Chapter 19. He would submit that similar issue involving classification of a product SIMILAC -2 was before the Bench in Appeal No. C/87691/13-MUM on the very same appellant. He would submit that the Bench vide Final Order No. A/1711/14/CSTB/C-I dt. 10.10.2014 disposed of the appeal in favour of the appellant. He would submit that in that case, the issue was whether the product imported would fall under the .....

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vs. Collector of C. Ex. 1989 E.L.T. 164 (Tribunal) for the proposition that when the ingredients of goods include mainly skimmed milk, the product merits classification under Chapter 0401 to 0404 and would get classified under Chapter 19.01 if it has got any other additional ingredients. He would submit that the said case of the Dalmia Dairy Industries Ltrd. Was taken in appeal by the Revenue to Apex Court and Apex Court has upheld the order of the Tribunal. It is also his submission that in vie .....

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t Indian Chocolate 400 grams while the products labels specifically state that it is Mama's Best Premium Chocolate a Nutritional Powder. He would submit that appellant being an ACP client was required to give proper declarations and description of the product and claim eligible benefit of the notification, as their products are not subject to any examination and are cleared through RMS procedure. He would submit that the Chapter Heading No. 2106 would appropriately apply in the case in hand. .....

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lour etc. It is his further submission that Chapter Heading 19019090 only covers product made out of Malt extract or food preparations of flour, groats, meal and starch in the absence of any substantiation by the appellant the product have been correctly classifiable under Chapter heading 2106. The impugned order is to be upheld and the demand of the differential duty needs to be confirmed along with interest and penalties. 5. We have considered the submissions made at length by both sides and p .....

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l of Customs, Singapore. It is also undisputed that appellant is a ACP client and the goods are cleared under RMS Procedure. 7. The dispute in this case is regarding the classification of the goods imported by the appellant. The assessee is claiming classification of the goods under Customs Tariff Heading 1901 while the Revenue is trying to classified the said product under Customs Tariff 2106. The classification claimed by the appellant is 19019090 while Revenue seeks to classify the same under .....

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04, not containing cocoa or containing less than 5% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included 1901 10 Preparations for infant use, put up for retail sale: 1901 10 10 Malted milk (including powder) kg. 50% - 1901 10 90 Other kg. 50% - 1901 20 00 Mixes and doughs for the preparation of bakers' wares kg. 30% - of heading 1905 1901 90 Other: 1901 90 10 Malt extract kg. 30% - 1901 90 90 Other kg. 30% 2106 Food preparations not elsewhere specifi .....

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d preparations for making kg. 150% - non-alcoholic beverages 2106 90 60 - Food flavouring material kg. 150% - 2106 90 70 - Churna for pan kg. 150% - 2106 90 80 - Custard powder kg. 150% - Other : 2106 90 91 - Diabetic foods kg. 150% - 2106 90 92 - Sterilized or pasteurized millstone kg. 150% - 2106 90 99 - Other kg. 150% It may be also necessary to reproduce the Customs Chapter Heading No. 0401 to 0404 of Customs Tariff which is as under: 8. In the backdrop of the rival contending entries and th .....

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ed by the revenue. The main ingredients as indicated hereinabove in the letter by the appellant would indicate that the product predominantly contains milk and milk derivative. The said product would have got ordinarily classified under Chapter Heading 0404 as product containing natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included (as per the CTH reproduced hereinabove), but since the product imported by the appellant co .....

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as to the claim of the appellant that the imported goods contain cocoa of 2.5%, and hence Chapter Note of Chapter Heading 1901 clearly applies to the goods imported and the product merits to be classified under 1901 as being specific entry. As against this, the Revenue's claim that the product fall under Chapter 2106 is misplaced as we agree with the contentions raised by the Ld. Counsel that the said heading 2106 would cover the residual products which are not classified elsewhere. 8.2 Seco .....

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in the products of those earlier headings. Thus heading 19.01 includes, for example: (1) Preparations in powder or liquid form used as infant food or for dietetic purposes and consisting of milk to which secondary ingredients (e.g. cereal groats, yeast) have been added. (2) Milk preparations obtained by replacing one or more constituents of milk (e.g., butyric fats) by another substance (e.g. Oleic fats) The products of this heading may be sweetened and may contain cocoa. However, the heading e .....

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that the products as is imported by the appellant would get covered under Chapter 1901. It is settled law that HSN Explanatory Notes can be considered for the correct classification of the products. We find that the HSN Explanatory Notes for Chapter Heading N0. 2106 may not apply to the products imported in as much as, the said note also clearly indicates that the products in question would merit classification under Chapter Heading No. 1901. We reproduce the relevant portion of HSN Explanatory .....

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or food preparations for human consumption. The heading includes preparations consisting of mixtures of chemicals (organic acids, calcium salts, etc) with foodstuffs (Flour, sugar, milk powder, etc) for incorporation in food preparations either as ingredients or to improve some of their characteristics (appearance, keeping qualities, etc.) (see the General Explanatory Note to Chapter 38) However, the heading does not cover enzymatic preparations containing foodstuffs (e.g., Meat tenderisers con .....

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o their cocoa content (see the General Explanatory Note to Chapter 19). The other powders are classified in heading 18.06, if they contain cocoa. Powders which have the character of flavoured or coloured sugars used for the preparation of lemonade and the like fall in heading 17.01 or 17.02 as the case may be. (2) Flavouring powders for making beverages, whether or not sweetened, with a basis of sodium bicarbonate and glycyrrhizin or liquorice extract (sold as cocoa powder ) (3) Preparations bas .....

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eparations (e.g., for flavouring); protein concentrates obtained by the elimination of certain constituents of defatted soya-bean flavour, used for protein-enrichment of food preparations; soya-bean flour and other protein substances, textured. However, the heading excludes non-textured defatted soya-bean flour, whether or not fit for human consumption ( heading 23.04) and protein isolates (heading 35.04). It can be clearly held after reading the HSN Explanatory Notes of Chapter 1901 and Chapter .....

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isputed the same and held a view that the product merits classification under Chapter 2106. In the said order, Bench after reproducing the rival contending entries held as under: From the reading of the above tariff entry of 1901 it is clear that Food preparations of goods of heading 0401 to 0404 is classifiable under 1901 and in particular preparations for infant use' falls under 1901.10. From the heading 2106 it can be seen that it covers Food preparations not elsewhere specified or includ .....

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