TMI Blog2006 (9) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... these products under a single heading, i.e. 2108.99 of CETA, 1985 which would correspond to Heading (2106.90 of HSN). 1.2To determine the classification under the Central Excise Schedule, it is first necessary to decide what are the entities are marketable new commodity understood commercially by the persons who deal in them to have emerged i.e. the manufacture/production and their levy under the Central Excise Act is attracted, then it is required to find a suitable heading/sub-heading, and application of the Statutory Rules for classification including relevant Section Note, Chapter Notes and Heading Notes under HSN considered and if found necessary the non statutory provisions and legislations thereafter applied, if called for. One cannot first find a heading and then apply the same. 1.3For the purpose of arriving at the classification of the entities herein, the nature of the products, the rival claims of Revenue and the assessee are by broadly splitting the list item different groups as : (a) Hirise 5, Hirise 6 (Repacked Full Fat Soya Flour) (b) Cake Improvers Saf Gel, Quick Rise Gel, Lite N Soft Gel, Helios Special Baker (Green), Fresh N Soft, Pakk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... burden of proving classification is upon the department. Appellant also submits that merely because the product label states that the Soya flour is minerally fortified and that the product can be used as a bakery improver, this cannot be determinative of the classification of the product. In any case, Chapter 21 applies to miscellaneous edible preparations and Heading 2108 applies to different edible preparations not elsewhere specified or included, i.e. it is a residuary of residuary. (iv) Relying on the submission, which cannot be contradicted, on facts, that no process has been carried out on the Full Fat Soya flour purchased in bulk and repacked by them and absence of data/test report, as to how the entity is fortified by minerals and what is the percentage and content increase or change in minerals over the naturally occurring minerals in the Soya flour procured and repacked. The fact of desired mineral fortification cannot be established. The label is only relied by Revenue in this respect, in absence of data, the label would have to be considered as Advertising Puffery or /and Gimmick. Therefore, there is no change in original Soya flour and repacked Soya flour and thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mprovers. (ii)The composition of these cake improvers is Hydrogenated Vegetable Fat (vanaspati), Vegetable fat based emulsifier, water, processing aids such as propylene glycol, glycerin and potassium hydroxide. 'Helios liquid emulsifier' consists of vegetable oils, glycerin and potassium hydroxide (different brand names under which these products were being marketed not reproduced. These products, are similar to what is stated in Heading Note 15.17 of HSN in that, the products contain hydrogenerated vegetable oil worked, by emulsification, using a Veg. Fat based emulsifier and small quantities of propylene glycol, glycerin and potassium hydroxide which are used to derive texturation in the form of crystalline structure gel. In order to get an emulsion of water-in-oil type, water is used. 'Margarine' another such entity would also contains colouring matter, vitamins, water and lecithin which a binding agent. The ld Jt. C.D.R states that Margarine is a pure oil. This is not borne out by any report and is not correct. It is a known water-in-oil emulsion with other ingredients. The main contention of the department that the assessee's products are not classifiable under He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son to classify the products under Heading 2108.88 or 2106.90 HSN. Department's reasoning that the second part of CSH 1508 corresponds to Chapter 1518 of HSN is incorrect. There are only two sub-headings. Heading 1508.10 deals with linoxyn and 1508.90 deals with others. It is, therefore, clear that all products, which would be covered under 1518, whether edible or not, fall under Chapter 1508.90 except linoxyn which would only fall under Chapter 1508.10. (v)Considering the stipulation in HSN Notes under Heading 2106 to be specifically covering. Preparations based on butter or other fats or oils derived from milk are used e.g., in Baker's wares to be applicable in this case, we find no substance in the ld. Commissioner's finding and applicability of this Note, as the products manufactured by the assessee, in this case, are based on vegetable oils and their derivatives and not on butter or fat/oils derived from milk. The milk based oils, including butter, would be classifiable under Chapter 4, and not under Chapter 15, covering animal as well as vegetable fats and oils. There is a clear distinction between animal and vegetable oils, on the one hand, and milk based fats an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of products are Bread Improver and Cake Lite, which the Appellant had classified under Heading 1905.90. Alternative classification under Heading 1101.00 of CET akin to 1102.90 of HSN is being pressed. Department seeks classification under Heading 2108.99 akin to 2106.90 of HSN. (ii)These products manufactured by the appellant are basically 'flours' that are improved by addition of very small quantities of emulsifier, Vitamin C, yeast, food and enzyme. Appellant's product Cake Lite consists of 95% rice flour bought in bulk and repacked along with 5% maize starch also bought in bulk and added to the rice flour. Appellant has met the starch and ash requirements. There is no evidence produced by the department to show that the appellant did not meet ash content and starch content as specified in Chapter Notes to Chapter 11 of CETA. The actual starch content of the Appellant product Cake Lite is 65% (minimum required is 45%) and the actual ash content is 1.2% (maximum provided is 1.6%). Chapter note 1102 to HSN states that the flours of that heading may be improved by the addition of very small quantities of mineral phosphates, antioxidants, emulsifier, vitamins or prepare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is used in the bakery for any purpose would have to be classified under Heading 2108.99, for e.g. Garlic used for making garlic bread, multi-grains used for making multi-grain bread, sesame seeds/pumpkin seeds used in bread, sugar used for sweetening bread, salt which makes the bread palatable. This result clearly cannot be accepted. (vi)The basis for classification is to prefer, when there are specific headings covering the product, in question, the specific over residuary heading. It is only in a case where there is no specific heading which covers a product, then it can be consigned to the residuary entry. Board's circular No. 10/18/86-CX1 dated 14-8-1986 which states that flours of date, banana, coconut, tamarind, tamarind kernel powder would be classifiable under the broad heading of Ch. 1101. [See Hindustan Gum Kernel Ltd. v. CCE, 2004 (163) E.L.T. 196 and Kolety Gum v. CCE, 2005 (183) E.L.T. 440], would lead us to incline to hold classification under Chapter Heading 1101. (vii)Insofar as the decision of the Bombay High Court in the case of Corn Products, relied upon by the department, is concerned the Court therein was concerned with interpretat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplied with any evidence nor has it specified what are the ingredients that the appellant is alleged to be adding to its repacked maize starch. The classification of corn flour has already been settled in appellant's favour as held in case of CCE, Mumbai-III v. Corn Products Company (India) reported in 1999 (108) E.L.T. 673. This case was maintained in Supreme Court as Commissioner v. Corn Products Co. (India) Ltd. reported in 2000 (121) E.L.T. 223. Also the case of Weikfield Products Co. Pvt. Ltd. v. CCE, Pune reported in 1999 (106) E.L.T. 69 also supports the appellant for classification of corn flour under Chapter 1103 of the tariff. Furthermore, repacking/relabelling of maize starch amounts to manufacture w.e.f. 2003-04 tariff onwards, however, it has been exempted from payment of duty vide general exemption no. 66/2003 and 62/2004 dated 1-3-03 and 1-3-04 respectively. 2.2 (a) (i)It was contended by the ld. A.R for Revenue that the illustration given in the HSN under Heading 2108 show that many of these products are neither consumable directly, nor are they of such type that they need to be dissolved in water or milk before being consumed. An illustrative list of such items ..... X X X X Extracts X X X X X X X X Extracts X X X X
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