MEHSANA DISTRICT COOPERATIVE Vs. C.C.E.

JUDGEMENT

(1.) THE issue, involved in this appeal, filed by M/s. Mehsana District Co -operative Milk Producers' Union Ltd., is whether skimmed milk powder produced by them is classifiable under Sub -heading 0401.19 of the Schedule to the Central Excise Tariff ct as claimed by them or under Sub -heading 0401.13 as confirmed by the Commissioner (Appeals) under the impugned order.

(2.) SH . P.M. Dave, learned Advocate, submitted that the appellants, a Co -operative Society, produced various diary products including skimmed milk powder; that a show cause notices was issued to them challenging the classification of their products, namely, Amul Spray (Partially skimmed milk powder for feeding infants), Amulya (sweetened partially skimmed milk powder) and Amul/Sagar (skimmed milk powder); that the Assistant Commissioner has allowed their claim for classification of partially skimmed milk powder and sweetened partially skimmed milk powder under Sub -heading 0401.19 of the Tariff; that the Assistant Commissioner, however, under the Order -in -Original No. 119/01 dated 19.11.01, has held that skimmed milk powder is classifiable under Sub -heading 0401.13 of the Tariff, which has been confirmed by the Commissioner (Appeals) under the impugned order on the ground that the milk powder covers whole milk powder, partially skimmed milk powder and skimmed milk powder. The learned Advocate, further, submitted that the issues, as regards the interpretation of Note 1 to Chapter 4 of the Tariff and whether expression "milk powder" covers all the three varieties of powder or not, have already been decided by the Hon'ble Punjab and Haryana High Court in the case of Food Specialties Ltd. Vs. Union of India, 1991 (51) ELT 310 (P&H) and the decision of the Hon'ble Supreme Court in the case Union of India as Food Specialties Ltd., 1998 (97) ELT 402 (SC); that Note 1 to Chapter 4 defines expression "milk" to mean full cream milk or partially of completely skimmed milk ; that, however, the Revenue's arguments that expression 'milk powder' the Revenue's arguments that expression 'milk powder' would also mean whole milk powder, partially skimmed milk powder or completely skimmed milk powder on the basis of Note 1 has been rejected by the Hon'ble Punjab and Haryana High Court and by the Hon'ble Supreme Court; that the Hon'ble Supreme Court has recorded submissions of the Revenue to the effect that expression "skimmed milk" also includes "partially skimmed milk"; that the supreme Court, however, did not accept the said contention holding, with reference to ISI Specifications as well as Prevention of Food Adulteration Rules, etc., that 'partially skimmed milk powder' is different from "skimmed milk powder"; that, similarly, the Hon'ble Punjab and Haryana High Court has held that milk powder, skimmed milk powder and partially skimmed milk powder are three different varieties of powder; that, accordingly, the Commissioner (Appeals) cannot hold that the expression 'milk', as defined in Note 1 to Chapter 4, had relevance to the expression 'milk powder' also; that, in fact, milk and powder are to different varieties of commodities; that Sub -heading 0401.13 of the Tariff covers only milk powder; that skimmed milk powder, which is a different variety of goods different from milk powder, is classifiable under Sub -heading 0401.19 of the Tariff. The learned Advocate also referred to the Indian Standard Specification for milk powder and the prevention of Food Adulteration Rules, according to which there are three different products, namely, milk powder, skimmed milk powder and partially skimmed milk powder, which are universally recognised as different products on the basis of their fat content. In this connection, he also referred to the decision of Hon'ble Punjab and Haryana High Court in Food Specialties Ltd. case (supra), wherein it has been held that only skimmed milk powder and not partially skimmed milk powder was covered under Sub -heading 0401.13 of the Tariff as it then existed. He also mentioned that the Hon'ble Supreme Court has rejected the appeal filed in the case of Union of India vs Food Specialties Ltd., 1998 (97) ELT 402 (SC) and confirmed the view of the Hon'ble Punjab and Haryana High Court that partially skimmed powder is a separate marketable commodity from skimmed milk powder and is classifiable under Heading 0401.19 and not under Heading 0401.13. Reliance has also been placed on the decision in Dalmia Industries Ltd. V. CCE, 1992 (61) ELT 295 (T).

(3.) COUNTERING the arguments, Sh. Kumar Santosh, learned SDR. submitted that the Hon'ble Punjab and Haryana High Court's decision, relied upon by the learned Advocate, relates to the period when Sub -heading 0401.13 of the Tariff applied only to "skimmed milk powder"; that at the relevant time of the present matter, sub -heading 0401.13 of Tariff has undergone a change and reads as "milk powder other than powder specially prepared for feeding infants put up in unit containers and ordinarily intended for sale." He emphasised that now Sub -heading NO. 0401.13 refers to milk powder and not to any specific category of milk powder, such as skimmed milk powder, as was the case earlier. The present heading now covers all milk powder whether whole milk powder, skimmed milk powder or partially skimmed milk powder, other than powder specifically prepared for feeding infants. He, Therefore, contended that skimmed milk powder is specifically covered under Heading 04.01.13 and the ratio of the decision in the case of Food Specialties Ltd. and Dalmia Industries Ltd., relied upon by the learned Advocate, does not apply to the facts of the present matter.