C. Satapathy, Member (T)

1. Heard both sides. The respondents have imported Supro Plus LF IP Non GM (Nutritious Beverage Powder) claiming classification under CTH 1901.90 and CETH 1901.99 attracting basic Customs duty at the rate of 30% and nil additional duty of customs. The original Authority has classified the impugned goods under CTH 2106.90 and CETH 2108.99 charging basic customs duty at the rate of 30% and additional duty of customs at the rate of 16% On appeal, the Lower Appellate authority has allowed the appeal of the respondents accepting classification under Heading 1901.90. Hence this appeal by Revenue.

2. It is the claim of Revenue that the impugned goods are a combination of Supro, a branded Soy protein isolate, with carbohydrates, vitamins and minerals and that the protein in the impugned goods is Soy protein isolate based and the same being highly refined soy protein, it cannot be compared to the flour, meal or grout based preparation covered under CTH 1901 which covers only very basic preparations. It is also claimed by Revenue that the HSN Explanatory Notes at Sr. No. 7 under Heading 21.06 does not exclude coverage of the impugned goods as has been wrongly held by the Lower Appellate Authority.

3. On a query from the bench, the respondents have provided the following details regarding the process of manufacturing of the impugned goods:-

Defatted Soybean Flakes (Soy Meal) are dissolved in basic aqueous solution. The insolubles are separated and dissolved proteins are precipitated by neutralization. Nutrients such as Vitamins, Minerals.com syrup, vegetable fats etc. are added to the protein slurry so obtained.

Supro Plus LF Nutritious Beverage Powder is obtained on spray Drying of the Protein Slurry

DEFATTED SOYBEAN FLAKES (SOY MEAL)

AQUEOUS EXTRACTION DILUTE ALKALI SEPARATION

SEPARATION OF INSOLUBLES

PRESCIPITATION OF DISSOLVED PROTEINS

ADDITION OF NUTRIENTS

<------------- VEGETABLE FAT MIXTURES <------------- CALCIUM PHOSPHATE/MINERAL SALTS <------------- CORN SYRUP SOLIDS, LECITHIN, VITAMINS <------------- POTASSIUM CITRATE, PHOSPHATE & SUGAR SPRAY DRYING PACKING

4. The Heading 19.01 under the Customs Tariff reads as under:-

19.01 - MALT EXTRACT; FOOD PREPARATIONS OF FLOUR, MEAL, STARCH OR MALT EXTRACT, NOT CONTAINING COCOA OR CONTAINING LESS THAN 40% WEIGHT OF COCOA CALCULATED ON A TOTALLY DEFATTED BASIS, NOT ELSEWHERE SPECIFIED OR INCLUDED; FOOD PREPARATIONS OF GOODS OF HEADINGS NOS. 04.01 TO 04.04, NOT CONTAINING COCOA OR CONTAINING LESS THAN 5% BY WEIGHT OF COCOA CALCULATED ON A TOTALLY DEFATTED BASIS, NOT ELSEWHERE SPECIFIED OR INCLUDED.

1901.10 - Preparation for infant use, put up for retail sale

1901.20 - Mixes and doughs for the preparation of bakers wares of heading No.19.05

1901.90 - Other

The competing entry under Customs Tariff Heading 21.06 reads as under:-

21.06 - FOOD PREPARATIONS NOT ELSEWHERE SPECIFIED OR INCLUDED

2106.10 - Protein concentrates and textured protein substances

2106.90 - Other

5. The dispute is whether the product should be considered as food preparation of flour, meals etc. under CTH 19.01 or it should be considered as a food preparation not elsewhere specified and hence under CTH 21.06. We have examined the arguments advanced from both sides and we have also perused the reasons given by the Original authority and the Lower appellate authority and the ratio of the following decisions cited by both sides:-

1) Collector of Central Excise V/s Frozen Foods Pvt. Ltd - 1992 (59) ELT 279 (Tribunal)

2) Frozen Foods Pvt. Ltd V/s Collector of Central Excise, Pune-

3) Wander Limited V/s Collector of Central Excise, Bombay - 1999 (110) ELT 735 (Tribunal)

6. We find that the Customs Tariff based on the Harmonized Systems Nomenclature is arranged according to complexity of materials in the ascending chapters. The entry under heading 19.01 covers food preparations of flour, meal etc. The respondents have pleaded that he impugned goods have been made from Soy meal in the form of defatted soybean flakes. However, we find that the soybean flakes have been put through a process of extraction and separation resulting in soy protein in the intermediate stage and thereafter other nutrients have been added to manufacture the impugned goods. As such, it is not possible to accept the contention of the respondents in regard to classification under CTH Heading 19.01. On the other hand, we find protein concentrates and textured protein substances are covered under CTSH 2106.10 and other food preparations are covered under CTSH 2106.90. The Explanatory Note under Heading 21.06, at Sr. No.6, only excludes non textured defatted soybean flour (CTH 23.04) and protein isolates (CTH 35.04) On the other hand, paragraph (A) of Explanatory Notes under heading 21.06 includes preparation for use either directly or after processing for human consumption. We find that the impugned goods are also used for making beverages or food preparation for human consumption as indicated in the test report which reads as follows:-

"The sample is in the form of pale yellow powder. It is a preparation containing proteinous matter, carbohydrates, fatty Protein content 27.8%

Such preparations may find use in making beverage or food preparations for human consumption."

7. The respondents have also. ... subsequently submitted copies of export documents from the EU and import documents from Jamaica sowing the classification of the impugned goods under Heading 1901.10. However, there is no indication about the reasoning which might have led the authorities abroad to classify the product referred to in these documents under heading 19.01. As such, we cannot place reliance merely on the export and import documents of other countries produced before us.

8. as regards the classification for additional duty, ..., we find that the corresponding classification under Chapter 21 of the C.E.T. is 21.08, which reads as under:-

21.08 - Edible preparations, not elsewhere specified or included 2108.10 - Preparations for Lemonades or other Beverages intended for use in the manufacture of Aerated Water : 16% 2108.20 - Sharbat : 16% 2108.30 - Prasad or Prasadam : Nil 2108.40 - Sterilised or Pasteurised Miltone : Nil ---------- Other : 2108.91 - Not bearing a brand name : Nil 2108.99 - Other : 16%

9. As such, the corresponding sub-heading for CTSH 2106.90 is evidently Central Excise Tariff sub-heading 2108.99. Such classification also supported by Chapter Note 9 (b) to Chapter 21 of CET which reads as under:-

(a) xx x xx x x x x

(b) preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human

(c) to (j) x x x x x x x x

10. In view of our finding as above, we are of the view that the impugned goods merit classification under CTH 2106.90 and CET 2108.99 Accordingly, we set aside the impugned order in appeal and restore the order in original.