TMI Blog2023 (11) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Badam Milk Drink Ready to Drink is containing flavourings namely badam powder, cardamom, saffron, Maltodextrin and garnished with badam flakes. Further it is found that this item has also undergone the process of homogenization and pasteurization and UHT treatment to increase the shelf life of the product. Such items, which are having a longer shelf life because of the above processes are not akin to normal pasteurized, homogenized and toned milk. It is found that the Board, while issuing Section 11C Notification No. 17/2008-CE (NT) has classified flavoured milk of animal origin under chapter sub-heading 2202 9030. We find that the Notification is issued after the introduction of 8-digit classification code and after the full alignment of Central Excise Tariff with HSN. This buttresses the contention of the Department that the impugned item is classifiable under the chapter sub-heading 2202 9030. The Department contended that the product/item is classifiable under 2202 9030 and in support they cited the case-law of ERCMPU (MILMA) VERSUS COMMISSIONER OF CENTRAL EXCISE, COCHIN [ 2013 (5) TMI 1066 - CESTAT BANGALORE] . The case-law of NESTLE INDIA LIMITED VERSUS COMMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rages containing Milk and that as per the HSN notes to Chapter Heading 2202.90 under the heading other , at Sl. No. 4 reads as Certain other beverages ready for consumption, such as those with a basis of milk and cocoa and that Rule 3(a) of the General Rules for the Interpretation of Central Excise Tariff stipulates that the heading, which provides the most specific description shall be preferred to heading providing a more general description. Hence the Department has classified the item under Chapter Sub-heading 2202 9030. The adjudicating authority has confirmed the classification of Badam Milk Drink - Ready to Drink manufactured by the appellant under Chapter Sub- Heading 2202 9990 of the Central Excise Tariff Act, 1985 for the period October 2007, onwards. Aggrieved by the Order-in-Original, the appellant filed an appeal before the Commissioner (Appeals), who has rejected their appeal vide the impugned order. Hence, this appeal was filed before the Tribunal. 2. In the submissions the appellant contended that; from the process of making Badam Milk Drink Ready to Drink the product is nothing but milk in Badam Flavour; the learned Commissioner (Appeals) did not appre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th sweetening matter only and that Badam Milk manufactured by them has not been added with sweetening agents like sugar but on the other hand flavoured with badam powder, cardamom, saffron, Maltodextrin and garnished with badam flakes. Such flavoured products fall under the category of beverages and are rightly classifiable under Chapter 2202 9990. The item cannot be used as a milk perse in view of the addition of flavour added to it and it has to be considered as a beverage and the product is a beverage as there are number of essential flavouring agents added to the milk and it cannot be considered under chapter heading 04 for the purpose of classification. The learned Advocate submits that Badam Milk drink is a flavoured milk made from milk added with sugar and flavours of Badam, Cardamom, Saffron, etc., adding of which do not alter its essential character of milk. The natural constituents of the milk are water, fat, proteins, lactose, minerals and vitamins. If those constituents are replaced with any other substance, only then the flavoured milk could not fall under Chapter 04. However, the goods in question retained all the constituents since not replaced with any constituent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 04. Chapter 22 covers Beverages, Spirits and Vinegar. Note 3 of Chapter 22 reads that for the purpose of heading 2202, the term non-alcoholic beverages mean beverages of an alcoholic strength by volume not exceeding 0.5% volume. This chapter covers predominantly the water-based beverages and milk is not covered under the heading 2202. Sub-heading 2202 9930 covers beverages containing milk. There is a difference between beverages containing milk and the milk itself in some flavour. Since milk itself is a beverage, it cannot say milk containing milk. Therefore, flavoured milk or milk in Badam flavour is rightly classifiable under Chapter 04 as milk and not under Chapter 22 as a beverage, which is a very general entry. As per rule 3(a) of the General Rules for the interpretation to Central Excise Tariff, the heading which provides the most specific description shall be preferred to headings providing a more general description. In the instant case, heading for Chapter 22 is Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured and other non-alcoholic beverages, not including fruit or vegetable juices of heading 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing Section 11AC benefit for the period 25.02.2005 to 14.06.2007. Learned AR has also contended that as per the HSN, Chapter Heading 0402 excludes Beverages consisting of milk flavoured with cocoa or other substances . 5. Heard both parties and perused the records. 6. We find that in this case the issue is regarding classification of the product manufactured by the appellant i.e. Badam Milk Drink Ready to Drink . The appellant contends that they have been classifying this item under 0401 11 as flavoured milk is covered under this heading prior to the introduction of 8-digit classification code vide Central Excise Tariff (Amendment) Act, 2004 w.e.f. 28.02.2005. However, post introduction of 8-digit classification, the Department has classified this product/item under CETH 2202 9030 which reads as under: Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured and other non-alcoholic beverages, not including fruit or vegetable juices of heading 20.09 and sub-heading 2202 9030 as beverages containing milk. 7. The appellant contends that with the change in the Classification Code from 6 to 8 digit, the classi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned order classifying the flavoured milk of animal origin under tariff item 2202 9030 of Central Excise Tariff but the appellants are not required to pay duty in view of the said notification. Accordingly, we dispose of all the three appeals by giving the benefit of notification to the appellant. 8. We find that with the introduction of 8-digit Classification Code, there is a specific entry for beverages containing milk, which was not there in the earlier Central Excise Tariff. Further Tarriff item 0401.11 flavoured milk whether sweetened or not put up in unit containers ordinarily is not anymore present under Chapter 04 after the introduction of 8 digit classification code. With the introduction of the 8 digit, since there is a specific classification for the impugned item under Chapter sub-heading 2202 9030 the same has to be classified under this specific heading in view of Rule 3(a) of the General Rules for the Interpretation of Central Excise Tariff, which says that a specific heading should be preferred for a generic heading. In this case, we find that the impugned item i.e. Badam Milk Drink Ready to Drink is containing flavourings namely badam powder, cardam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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