K.C. Mamgain, Member (T) - (1.)UNDER Civil Appeal No. 1329 of 2003 filed by M/s Amrit Foods and C.A. No. 7275 of 2003 filed by Revenue, this appeal was remanded by the Hon'ble Supreme Court for disposing of the classification of the products in dispute. Under the said Civil Appeal, The Hon'ble Supreme Court set aside the Final Order No. 262/02 -D dated 13.11.2002 of the Tribunal in so far as it pertains to determination of classification of appellant's products and upheld the order of the Tribunal setting aside the penalty imposed under Rule 173Q of the Central Excise Rules, 1944.
(2.)M /s. Amrit Foods (A division of M/s.Amrit Banaspati Company Limited) are manufacturers of various dairy products. A team of Central Excise Officers visited their factory premises on 3.11.1999 and conducted inquiry about the products manufactured by them. During the inquiry, it was found that the unit is engaged in the manufacture of milk based products, namely, milk shake mix, soft serve mix, skimmed milk, toned milk, double toned milk and cream. It was informed by M/s.Amrit Foods that on 7.2.1996, they had informed the Assistant Commissioner that they were manufacturer of UHT treated dairy milk falling under chapter 4 which is subject to nil rate of duty and that they intended to manufacture some more dairy products falling under the said chapter which are also subject to nil rate of duty. They accordingly took exemption from obtaining registration. During the inquiry, the statements of Shri Naveen Mittal, Additional General Manager of M/s.Amrit Foods and other concerned persons were recorded. After conducting investigation, prima facie, it appeared that the soft serve mix, skimmed milk, etc. which were being manufactured by the appellants since their inception are not classifiable under chapter 4 as dairy products because of addition of stabilizers. Similar dispute was also raised on the classification of the products coffee creamer and cream packed. After detailed investigation show cause notice was issued to the appellants M/s.Amrit Foods alleging that they knew that their products contained the basic ingredients necessary for manufacture ice cream and they had undertaken some processes required for preparation of ice cream mix. They also knew that the ratio between ingredients, chosen by them was keeping in view the para meters of ice cream. These facts were not declared by the appellants to prevent the department from classifying their products under chapter 21 or 19 where in ice -cream and preparation based on milk products are respectively classifiable. On the basis of information furnished by the appellants, it was found that they have evaded duty of Rs. 1,27,39,935/ - and have contravened the provisions of Rule 9(1) by removal of excisable goods without payment of duty, Rule 52A by removal of dutiable goods without cover of invoices, Rule 53 by not accounting production and clearances of the excisable goods in the statutory record i.e. RG -1 register, Rule 173B and 173C by not filing the declaration, Rule173F and 173G by not determining the correct Central Excise duty and payment thereof by following the prescribed procedures. Accordingly show cause notice was issued to them demanding of duty of Rs. 1,27,39,935/ - and proposing classification of milk shake, soft serve mix, coffee creamer and cream packed under sub heading 1901.19. Penalty was also proposed on the appellants under Rule 173Q of the Central Excise Rules, 1944.
(3.)THE show cause notice was adjudicated by the Commissioner under the impugned Order -in -Original No. 38/Comm./M -I/2001 dated 7.8.2001 in which he classified milk shake mix, soft serve mix, coffee creamer and cream packed manufactured by M/s.Amrit Foods under sub heading 1901.19 of the Central Excise Tariff and demanded duty of Rs. 32,81,260/ - for the period from November, 1999 to August, 2000. He also imposed a penalty of Rs. 15 lakhs under Rule 173Q of the Central Excise Rules, 1944 on the appellants. The appeal filed by M/s.Amrit Foods before the Tribunal was decided vide Final Order No. 262/02 -D dated 13.11.2002. By the said order, penalty of Rs. 15 lakhs imposed under Rule 173Q was set aside but the Tribunal did not find any infirmity in the order of the Commissioner with regard to classification and duty demand confirmed by the Commissioner. On appeal filed against the final order of this Tribunal, the Hon'ble Supreme Court upheld the order of the Tribunal setting aside the penalty but remanded back the matter of classification to be decided afresh as stated above. It was argued by the learned Counsel for the appellant that the 4 products for which classification has been filed by them under heading 04.04 but which has been held classifiable under sub heading 1901.19 by the Commissioner, are as under:
(1) Milk Shake Mix, (2) Soft Serve Mix, (3) Coffee Creamer (4) Cream Packed The Commissioner has not given any detailed finding on the classification of coffee creamer and cream packed in the adjudication order. It was argued by the learned Counsel for the appellant that these products are covered under sub heading 0404.90. This position has not been disputed by the Revenue during arguments before us. Thus, we are left with the classification of milk shake mix (MSM) and soft serve mix (SSM).