Case Law Details
M/s Marko Foods & Shri Naman Mandhyan, Partner Vs Commissioner of Central Excise (CESTAT Allahabad)
The facts of the case are that in the case of Marko Foods appellant is manufacturing “Chocolate” namely “Parle 2-in-1 Eclairs “and in case of Pahladrai Confectionaries Pvt. , the appellant is manufacturing chocolate namely “Kismi Toffee “and “Kismi Toffee Bar. “The ingredients of the said manufactured goods are liquid glucose, sugar, milk solids, edible vegetable oil, lecithin, salt and flavor, emulsifier (322). The appellants are classifying the said goods under Tariff Item No.17049020 as “Boiled Sweets “ whereas Revenue wanted to be classified all the said items under Tariff Items No.17049030 as “White Chocolate “. Therefore, the disputes arose and the show cause notices were issued to the appellants and it was held that said goods merit classification under Tariff Items No.17049030, consequently the appellant is not entitled to get the benefit of Notification No.03/2006-CE dated 01/03/2006 (Sr.No. 16) and Notification No.12/2012-CE dated 17/03/2012 (Sr.No. 19). Accordingly, the duty was demanded from the appellants along with interest and penalties were also imposed on the appellants, thus the appellants are before us.
Held by CESTAT
On the basis of the arguments advanced by both sides before us, we find that the test report has been obtained. As the per the test report, the ingredients of the said goods namely sugar, edible oil and emulsifier etc. concerning of full white colour several matters mainly presence of fat and protein emulsifier etc., each white chocolate preparation which does not necessary positive test of Theobromina (does not confirmed presence of cocoa) having following characters Fat content 8%). On the basis of test report, it was held that the goods in question do qualify as white chocolate by the authorities below, but as per the chapter 17-HSN explanatory note “white chocolate “which means white chocolate composed of Sugar, Cocoa butter, Milk powder and Flavouring agents, but not containing more than mere traces of cocoa (cocoa butter is not regarded as cocoa). From the said definition, it is clear that white chocolate should contain “cocoa butter “. As per the test report, it is clear that the sample does not contain any cocoa butter and white chocolate requires fat content of 25% as per the Food Safety & Standards (Food Products Standard & Food Additives) Regulations, 2011 whereas the fat content in the goods in question is 8% only. Therefore, from the test report it can be said that the goods in question are not white chocolate. Therefore, the said item do qualify for exemption as per the Notification No.03/2006-CE dated 01/03/2006 (Sr.No.16), also Notification No.12/2012-CE dated 17/03/2012 (Sr.No.19), which explains that items falling under Chapter 170490 are entitled for exemption under Sugar Confectionary (excluding white chocolate and bubble gum). Admittedly, the goods manufactured by the appellants are Sugar Confectionary is neither chocolate nor bubble gum. Therefore, the appellants are entitled to pay concessional rate of duty as allowed by the above cited Notifications.
