“Badam Milk Drink-Ready To Drink” Classifiable Under CTH 2202 9030: CESTAT

The Bangalore Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that “badam milk drink-ready to drink” is classifiable under CTH 2202 9030.The bench of D.M. Misra (Judicial Member) and Pullela Nageswara Rao (Technical Member) observed that Badam Milk Drink—Ready to Drink contains flavourings, namely badam powder, cardamom, saffron, and maltodextrin, and is garnished with badam flakes. It cannot be a substitute for milk in the preparation of beverages made with milk, viz., tea and coffee.The appellant, M/s. MTR Foods, is a manufacturer of masala instant food mixes, ready-to-eat packaged food, and frozen food falling under Chapters 9, 21, etc., of the Central Excise Tariff Act, 1985. The appellant had manufactured and cleared “Badam Milk Drink-Ready to Drink” at the “Nil" rate of duty from October 2007 onwards by classifying this final product under Chapter Heading 0402 9990 of the Central Excise Tariff Act, 1985.Prior to the amendment to the Central Excise Tariff Act, 1985, in 2004, wherein an 8-digit classification code was introduced in place of a 6-digit classification code, the appellant was classifying the product “Badam Milk Drink-Ready to Drink” as flavoured milk, which was specifically mentioned in Chapter Sub-heading 0401.11 in the erstwhile Central Excise Tariff Act, 1985.After the introduction of the 8-digit classification code, the appellant has classified its product under Chapter 04 of the Central Excise Tariff Act, 1985, on the ground that the change from 6 to 8 digits will not change the classification.Hence, the appellant was clearing Badam Milk as flavoured milk under Chapter subheading 0402 9990 of the Central Excise Tariff Act, 1985. The appellant was issued a show-cause notice alleging that they had manufactured and cleared “Badam Milk Drink—Ready to Drink” at the “Nil rate of duty from October 2007 onwards, classifying under Chapter Sub-Heading 0402 9990. In the show-cause notice, the Department alleged that the final product is rightly classifiable under Chapter sub-heading 2202 9030 as “Beverages containing Milk. As per the HSN notes to Chapter Heading 2202.90 under the heading “other, at Sl. No. 4 reads, “Certain other beverages ready for consumption, such as those with a basis of milk and cocoa. Rule 3(a) of the General Rules for the Interpretation of the Central Excise Tariff stipulates that the heading that provides the most specific description shall be preferred to the heading that provides a more general description.The appellant submitted that from the process of making “Badam Milk Drink—Ready to Drink,” the product is nothing but milk in Badam Flavour. The Commissioner (Appeals) did not appreciate the difference between “beverages containing milk” and “milk itself in some flavour." Therefore, the product is nothing but milk in badam flavor and is rightly classifiable under Chapter 04 as milk and not under Chapter 22 as beverages, which is a general entry. They have never contended that Badam Milk is not a beverage, but it is classifiable under Chapter 4 and not under Chapter 22.The department contended that the product or item “Badam Milk Drink—Ready to Drink is rightly classifiable under CTH 2202 9030.The tribunal held that the Board while issuing Section 11C Notification No. 17/2008-CE (NT), has classified flavored milk of animal origin under chapter sub-heading 2202 9030.Counsel For Appellant: H.R. VishwanathanCounsel For Respondent: Dyamappa AiraniCase Title: MTR Foods Pvt. Ltd. Versus C.C.E, Bangalore - ICase No.: Excise Appeal No. 2660 of 2010Click Here To Read The Order

“Badam Milk Drink-Ready To Drink” Classifiable Under CTH 2202 9030: CESTAT

Mariya Paliwala

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