1994(11)LCX0053

IN THE CEGAT, SPECIAL BENCH `D’, NEW DELHI

S/Shri G.P. Agarwal, Member (J) and G.R. Sharma, Member (T)

MAIZE PRODUCTS

Versus

COLLECTOR OF CENTRAL EXCISE, AHMEDABAD

Order Nos. 428 to 430/94-D, dated 9-11-1994 in Appeal Nos. E/2625 & 2640/93-D

CASE CITED

Collector v. Sukhjit Starch and Chemicals Ltd. — 1994(06)LCX0048 Eq 1994 (072) ELT 0753 (Tribunal)           [Paras 6, 9, 10]

Advocated By : S/Shri P.M. Dave, T. Ramesh and Uday Joshi, Advocates, for the Appellants.

 Shri R.K. Kapoor, S.D.R., for the Respondents.

[Order per : G.R. Sharma, Member (T)]. - These are three appeals; the appeals filed by M/s. Maize Products, M/s. Anil Starch Products and M/s. Bharat Starch Products. As the three appeals pertained to classification of Liquid Glucose under Central Excise Tariff they were heard together and are being disposed of by this common order. The Collector (Appeals) in their orders had held that, “Glucose Syrup/Liquid Glucose and Malto dextrine Syrup shall be classifiable under Central Excise Tariff sub-heading No. 1702.19.”

2. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of Glucose (Liquid and Malto dextrine). M/s. Bharat Starch and Chemicals filed classification list effective from 1-3-1993 for Liquid Glucose and Malto Dextrine for classification under Chapter sub-heading No. 1702.30. The Asstt. Collector, Central Excise in his order dated 15-12-1993 held that Liquid Glucose and Malto Dextrine were classifiable under Chapter sub-heading No. 1702.19. Revised classification list filed on 7-9-1990 and 4-9-1990 by M/s. Anil Starch Products and M/s. Maize Products respectively seeking classification of Liquid Glucose (Glucose Syrup) under Chapter sub-heading 1702.30 were decided by the Asstt. Collector holding that the goods would be classified under Chapter sub-heading No. 1702.19. They started paying duty under protest. A show cause notice was issued to the appellants asking them to show cause as to why Liquid Glucose/Glucose Syrup/Malto Dextrine should not be classified under Chapter sub-heading No. 1702.19 and why their classification list seeking classification of Glucose Syrup/ Liquid Glucose/Malto Dextrine under Chapter sub-heading No. 1702.30 should not be rejected and why Glucose Syrup/Liquid Glucose/Malto Dextrine manufactured by them should not be classified under Chapter sub-heading No. 1702.19. A sample of Glucose Syrup/Liquid Glucose/Malto Dextrine was drawn and sent to the chemical examiner who opined that “the sample is in the form of odourless, colourless, viscous syrup. It is mainly composed of water and other sugars. The contents of reducing sugar expressed as Glucose is less than 80% by weight. It does not contain any added flavouring or colouring agent”.

3. Shri T. Ramesh and Shri T.M. Dave, the ld. Advocates appearing for the appellants submitted that the Collector (Appeals) did not take into consideration the test report given by the Chief Chemist under his letter dated 5-12-1991; that in that report it was opined that, “the sample is in the form of colourless thick viscous liquid. It is mainly composed of reducing sugar and water. The content of reducing sugar expressed as dextrose is 34% by weight. It is free from any added flavouring or colouring matter.” On the basis of this report the appellant submitted that the product in question is nothing but Syrup classifiable under sub-heading No. 1702.30.

4. The ld. Counsel submitted that ISI specification IS : 874-1974 in paragraph 4.1 reads :-

“the material shall be in the form of colourless and Viscous Syrup with characteristic sweet taste. It shall be clear from fermentation, mouldy growth, sediment, dirt and other suspended extraneous matters which are added sweetening or flavouring agents.”

that when this standard set out by the Indian Standard is read with the text report furnished by the Chief Chemist it becomes crystal clear that the product in question can only fall under Chapter Heading No. 1702 sub-heading No. 1702.30; that Syrup has not been defined in the Tariff, invariably reliance has to be placed on the dictionary, technical literature, common parlance and trade name.

5. It was argued for the appellants that Websters Dictionary defined Syrup as “Any of viscose sweet, usually viscose liquid, preparation of water or fruit juice boiled down with sugar etc.”; that from this meaning it would be clear that Syrup signifies that it is a liquid; that even in common parlance Syrup signifies and is understood as liquid or solid in dissolved form; that the Chemical Examiner opined that the product was in liquid form; that in this view of the matter their product was correctly classifiable under Tariff Heading No 1702 as Sugar Syrup.

6. Arguing further, the ld. Counsel submitted that it is well settled principle of interpretation that when a product is not defined under the Tariff, the same can be classified according to its popular meaning; that the product manufactured by them was known as Glucose Syrup conforming to ISI specification cited supra and was rightly classifiable under Chapter sub-heading 1702.30; that the Affidavits of two persons filed by them prove the fact that the product manufactured by them was known in the trade as Glucose Syrup; that the present Central Excise Tariff which is based on HSN should be interpreted in terms of the Explanatory Notes therein; that these Notes on pages No. 130 to 132 Vol. 1 make it abundantly clear that Part A covers other sugars in solid form whereas Part B covers Syrup of sugars including the one which is being manufactured by the appellant’s company; that their product in view of this note should be classified under the Head Syrup in which the right sub-heading 1702.30 and not 1702.19. A lot of case law was cited and relied upon by the appellant in support of their submissions. The appellant also cited and relied upon the decision of the Tribunal in the case of Collector of Central Excise, Chandigarh v. Sukhjit Starch and Chemicals Ltd. reported in 1994 (072) ELT 753 in which the Tribunal had held by the majority decision that, “the correct classification of Liquid Glucose and Malto Dextrine will fall under sub-heading No. 1702.29". Summing up his arguments the ld. Counsel submitted that the facts in their case are identical to the facts of the case cited supra and the issue is the same and therefore they are fully covered by this decision of the Tribunal and prayed that the impugned order may be set aside and consequential relief may be given to them.

7. Shri  R.K.  Kapoor,  the  ld.  S.D.R.  appearing  for  the  respondents submitted that the test report referred to by the appellants was examined by the Collector (Appeals) in detail; that the test report only says that the Glucose Syrup (Liquid and Malto Dextrine) manufactured by the appellants was in liquid form; that the scheme of Central Excise Tariff is very clear; that Heading 1702 includes other sugars including Chemical Pure Lactose, Maltose, Glucose and Fructose in any form. The ld S.D.R. submitted that this heading includes the items in any form and, therefore other sugars in liquid form will fall under Chapter Heading 1702.19; on the question that as Sugar Syrup was not defined in the Tariff and, therefore, reliance must be placed on the common parlance/trade parlance use of the word, the ld,. S.D.R. submitted that goods are in the trade parlance known only as Liquid Glucose and not as Sugar Syrup and, therefore the test of common parlance/trade parlance is not satisfied by the goods to claim classification under Chapter Heading 1702.30.

8. On the question of taking aid from HSN Explanatory Note, the ld. SDR submitted that Chapter 1702 Central Excise Tariff is not pari materia to Chapter 17.02 of the HSN. Explanatory Note therefore can at best be used as assistance in understanding the product. The ld. SDR also referred to and relied upon the Central Board of Excise and Customs Section 37B/Order No. 1/93 contained in F. No. 14/1/1991-CX. 1, dated 11-3-1993, wherein the CBEC after taking all the facts into consideration had held, “keeping in view the precess of manufacture, composition and analysis of Liquid Glucose manufactured by few manufacturers, Board is of the view that this product is classifiable under sub-heading No. 1702.19 of the Tariff. The ld. SDR therefore submitted that having regard to all the facts and circumstances of the case Liquid Glucose shall be classifiable only under Chapter sub-heading No. 1702.19 of the Central Excise Tariff.

9. Heard the submissions of both sides and considered them. A number of arguments were adduced by both sides on various contentious issues citing case law in support of their contentions. In view of the majority decision of the Tribunal in the matter of Collector of Central Excise, Chandigarh reported in 1994 (072) ELT 753 cited supra and relied upon by the appellant in this case, we find that classification of Liquid Glucose was the issue before the Tribunal and the Tribunal after examining all the facts and pleas of the appellant and the Department had observed :-

“The adjudicating authority as well as the appellate authority in the order have referred to the tariff as well as relevant portion of HSN. From a perusal of the Heading 1702 and sub-heading 1702.19 it is clear that Heading 1702.19 covers other sugars, including chemically pure lactose, maltose, glucose and fructose in any form except Palmyra sugar as Palmyra sugar is covered under Heading 1702.29 covers preparation of other sugar other than preparation in which reducing sugars expressed as anhydrous dextrose amount to more than 80% by weight - sub-heading 1702.21. The products in question before us are not 100% chemically pure glucose. The products are in liquid form whereas sugars are in solid (crystalline or amorphous) forms. Therefore, the products cannot be treated as other sugars, including chemically pure lactose, maltose, glucose and fructose in any form. The heading is in two divisions, other sugars, including chemically pure lactose, maltose, glucose and fructose in any form. 1702.19-other preparations of other sugars :

In the matter before us, the percentage of reduced sugar expressed as anhydrous dextrose is 38.8% and 28.5%. Accordingly, we are of the view that the correct classification of the Liquid Glucose and malto dextrin will fall under sub-heading 1702.29. We do not find any infirmity in the order passed by the lower authorities. Accordingly, we do not find any merit in the revenue’s appeal. The same is dismissed."

This finding of the Hon’ble President was further agreed with by the third Member to whom the case was referred on account of the difference of opinion. The third Member in para 30 of his order came to the conclusion holding that, “in view of the foregoing discussion, I agree with the Hon’ble President that the classification of the products under consideration would be under sub-heading 1702.29 as other preparations of other sugars.

10. We observe that the product for classification before us is Liquid Glucose/Malto Dextrine. We also observe that Liquid Glucose/Malto Dextrine was one of the products for classification before the Tribunal in the above case. Similar pleas on various issues were raised by both sides which were considered and examined in detail by the Tribunal, we, therefore, agree with the ratio of the decision of the Tribunal in the above case and hold that Liquid Glucose and Malto Dextrine will be classifiable under Chapter sub-heading No. 1702.29 of the Central Excise Tariff.

11. One interesting question arises out of the above finding and that is this that neither the appellants nor the respondents have claimed classification of the disputed products under Chapter sub-heading 1702.29 and whether the Tribunal could do that. In this regard we can only say that the Tribunal had to decide the issues perfectly and if the evidence on record shows that the product shall be classifiable under Chapter sub-heading 1702.29 though neither party had claimed it, we do not have any hesitation in deciding the thing correctly.

12. In view of the above findings the [appeal is] allowed and the impugned orders are set aside.

Equivalent 1995 (75) ELT 329 (Tribunal)