TMI Blog2024 (3) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 20 00 as determined by the authorities below. The impugned order is set aside. The appeal is allowed. - MS. SULEKHA BEEVI. C.S., MEMBER (JUDICIAL) AND MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL) Mr. G. Krishnamoorthy, Advocate - For the Appellant Mr. Anoop Singh, Joint Commissioner (A.R) - For the Respondent ORDER Brief facts are that the appellant is engaged in the manufacture and clearance of excisable goods viz. Masala Coriander Oats and Curry Pepper Oats (Savoury Oats), Silk Oats (Sweet Oats) and Museli. On intelligence gathered that appellant though engaged in the manufacture of the above goods was clearing them without payment of duty, investigation was initiated. Show cause notice was issued for different periods. The show cause notice in the present case is for the period February 2015 to January 2016. The department was of the view that the process undertaken by the appellant for producing Masala Oats amounts to manufacture and that appellant is liable to pay Excise Duty. The show cause notice was issued proposing to demand Excise duty along with interest and also for imposing penalties. After due process of law, the original authority confirmed the classification of Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant, involves mixing of plain oats and dehydrated vegetables in a mixer, which is operated for 60 seconds, and thereafter the entire quantity of mixture is unloaded in a hopper through a conveyor belt and then fed into the packing machine, where the mixture is packed along with seasoning. The final product so manufactured is marketed as Savoury Oats or Masala Oats which is then cleared to their principal manufacturer (Marico Ltd.). According to the appellant, this product viz. Savoury Oats is nothing but a premix comprising of Oat Flakes (68%-76%), dehydrated vegetables (1.5%-3.5%) and seasoning products (23%-25%). Plain Oats is the main input for this final product and is imported by Marico Ltd. by classifying under tariff heading 1104 12 00 as Rolled or Flakes Grains of Oats attracting Nil rate of duty. It is asserted by the Ld. Counsel that the Plain Oats are obtained by flattening oats which have been steamed and rolled. They are also called as quick oats. The process done by the appellant is of mixing of various ingredients in the specified proportion and packing these premix into plastic pouch and cardboard boxes. There is no process of pre-heating or pre-cooking involv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flakes or other worked grains (except flour, groats and meal), pre-cooked or otherwise prepared, not elsewhere specified or included. 1904 10 - Prepared foods obtained by the swelling or roasting of cereals or cereal products: 1904 10 10 ---Corn flakes Kg. 12.5% 1904 10 20 ---Paws, Mudi and the like Kg. 12.5% 1904 10 30 --- Bulgur wheat Kg. 12.5% 1904 10 90 --- Other Kg. 12.5% 1904 20 00 -Prepared foods obtained from unroasted cereal flakes or from mixtures of unroasted cereal flakes and roasted cereal flakes or swelled cereals Kg. 12.5% 1904 30 00 -Bulgur wheat Kg. 12.5% 1903 30 90 -Other Kg. 12.5% .. 14. Ld. Counsel has adverted to the packets of the Masala Oats and pointed out that the contents of the packet has to be cooked at least for 3 minutes so as to make it ready for eating. Savoury Oats thus cannot be directly consumed by opening the packet and has to be cooked. In other words, Savoury oats / Silk Oats are not cooked preparations but are to be cooked by the consumer. The cooking instructions are given on the packet. It says that the content of the packet along with 1 cups of water has to be cooked for 3 minutes over medium flame or microwaved for 3 minutes on full power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the facts of the present case. Before we embark on the discussion on this issue and answer the same, it would be advisable to take note of few judgments wherein legal position that prevails on this subject is stated with elaboration. 11. The first judgment which we want to mention, which was cited by Ms. Charanya, is Crane Betel Nut Powder Works v. Commissioner of Customs, Central Excise, Tirupathi - 2007 (210) E.L.T. 171 (S.C.). In the said case the assessee was engaged in the business of marketing betel nuts in different sizes after processing them by adding essential/non-essential oils, menthol, sweetening agent, etc. Initially, the assessee cleared the goods under Chapter sub-heading 2107 of the Central Excise Tariff and was paying duty accordingly. However, the assessee filed a revised classification declaration under Rule 173B of the Central Excise Rules, 1944, with effect from 17th July, 1997, claiming classification of its product under Chapter sub-heading 0801.00 of the Central Excise Tariff. It was contended by the assessee that the crushing of betel nuts into smaller pieces with the help of machines and passing them through different sizes of sieves to obtain goods of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and is allowed. The order of the CEGAT as well as demand of Excise duty by the Revenue are hereby set aside. 16. Again, in the case of Mahavir Food Products Vs CCE Vadadora (supra), the Larger Bench of the Tribunal had occasion to consider the classification of Makai Poha which was corn grains boiled and flattened between rollers, but not roasted. The assessee was of the view that as the product cannot be eaten as prepared food by itself or after soaking cannot be classified under 1904 and has to be classified under 1104. The Larger Bench held that the Heading 1904 covers prepared food obtained by swelling or roasting of cereals. If the flakes are processed beyond the extent covered under Heading 1104 so as to be ready for consumption it would fall under 1904. The relevant part of the order read as under : 5.2 It will be seen from the provisions of Chapter 11, sub-heading 11.04 and the corresponding Explanatory Notes that, flaked corn, which is steam-heated or rolled between heated rollers, but which has not reached the stage of a cooked preparation ready for consumption would be covered under sub-heading 11.04. 6. Chapter 19 of Schedule I to the Tariff Act deals with preparation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planatory Note to this Chapter) etc. may have been added during or after their manufacture. This group also includes similar foodstuffs obtained, by swelling or roasting, from flour or bran. Corn flakes are made from grains of maize by removing the pericarp and the germ, adding sugar, salt and malt extract, softening with steam and then rolling into flakes and roasting in a rotary oven. The same process may be applied to wheat or other cereal grains. Puffed rice and wheat also fall in this group. These products are prepared by subjecting the grains to pressure in a moist, heated chamber. Sudden removal of the pressure and ejection into a cold atmosphere causes the grain to expand to several times its original volume. This group further includes crisp savoury food products obtained by submitting moistened cereal grains (whole or in pieces) to a heating process which makes the grains swell, these being subsequently sprayed with a flavouring consisting of a mixture of vegetable oil, cheese, yeast extract, salt and monosodium glutamate. Similar products made from a dough and fried in vegetable oil are excluded (heading 19.05). 6.2 It will be noticed that under Heading 19.04 of the Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een stated that the Customs are accepting this as a particular form of rice only. In view of all these factors, we do not find any merit in the impugned orders. Moreover, the longer period has been invoked. In our view, the whole thing is the question of classification and matter of interpretation of the entries in the Customs Tariff. In such a case, there cannot be any allegation of suppression of facts or misrepresentation with an intend to evade duty. All the case laws cited by the learned advocates are applicable to the facts of the present case. The Favourite Food Products case has been distinguished. Moreover, the case on which the Adjudicating Authority and lower authorities have relied on has been overruled in the Larger Bench decision. In view of all the above observations, we do not find any merit in the impugned orders. Therefore, we set aside the impugned orders and allow the appeals with consequential relief. 18. In the case of Amar Food Products Vs CCE Ahmedabad (supra) the issue under consideration was the classification of the product Makai Poha and after relying upon the decision of the Larger Bench in Mahavir Food Products, the Tribunal held that the product Makai ..... 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