ORDER
S.L. Peeran, Member (J)
1. The appellants are aggrieved with the Order-in-Appeal passed by Collector (Appeals), Bangalore upholding their claim for classification of the product Try Snack Foods called Fryums’ under Chapter Heading 21 of Central Excise Tariff Act, 1985 but has denied the benefit of the Notification No. 12/90-C.E., dated 20-3-1990. The learned Collector (Appeals) has negatived the contention of the appellants that the product in question is ‘Namkeens’. He has held that “the term Namkeen as used in the notification would denote only such of these items which are ready to eat. The examples cited, that is, Bhujiya and Chabena only clarify the situation that both these products are in a ready to eat condition and do not require any further processing except opening and eating. Fryums or narnkeens, manufactured by the appellants would not be covered by the notification. The appellants’ product requires to be fried before it can be eaten. They are, therefore, not eligible for the benefit of Notification No. 12/90. The appeal is accordingly disposed of.”
2. The appellant has given the various steps in the process of manufacture of the Fryums as follows :-
“Step 1 : Raw materials such as rice flour, wheat flour, edible tapioca starch, salt and spices are blended in mixture.
Step 2 : Water is added to the blended material to bring up the moisture content to form a dough.
Step 3 : This dough is thermally conditioned and then pressed through a die where the rotating knife cuts the product into uniform pieces.
Step 4 : The pieces are skin-dried so that they do not stick to each other and then further dried to remove residual moisture. This results in a hard dry product.
Step 5 : The dried product is packed in unit packs using printed wrapping material.
Step 6 : The unit packs are then repacked in a master carton.
It is contended by them that they had claimed classification under Heading 2107 of Central Excise Tariff and claiming benefit of Notification No. 19/89-C.E., dt. 1-3-1989 read with Notification No. 12/90-C.E., dt. 20-3-1990. It is contended by the appellant that the product is similar in all respects to papads, idli-mix, vada-mix, dosa-mix, jalebi-mix, Gulab Jamun-mix specified in the Notification No. 19/89-C.E., dt. 1-3-1989 were not ready to eat snacks and required frying before eating similar to Fryums. It is stated that Sl. No. 5 of the notification in question was merely illustrative and not exhaustive, and that fryums manufactured by them was “Namkeen” and fell within the exempted category specified in Notification No. 19/89-C.E., dated 1-3-1989. Alternatively, it is contended that Fryums would fall under Heading 2107.99 under the category “other” since they were not in “Unit containers” but were packed in flexible polyethylene covers. They have further contended that the assessments were made provisional and backed by a Bond and that there was no case for imposing penalty of Rs. 500/- and that the learned Collector should have instead approved their classification list filed by them by granting the benefit of Notification No. 19/89-C.E., dated 1-3-1989.
3. We have heard Shri A.S. Sundarajan, learned consultant for appellant and Smt. J.M.S. Sundaram, learned SDR for revenue. Shri Sundarajan submitted that it is admitted fact that the product is a ‘Namkeen’ as held by learned Asstt. Collector but the learned Asstt. Collector while classifying under Heading 19.01 of CET ’85 had held that the Notifications 19/89 and 12/90 had strictly referred to only ‘Namkeens’ such as Bhujiya and Chabena and not to all namkeens, as the examples of Namkeens in the notification is not illustrative but specific. Shri Sundarajan contended that these findings of the learned Asstt. Collector has resulted in a narrow interpretation of the notification and such strict interpretation to avoid granting benefit of the notification and to make the notification otiose is not permissible in law. He contended that the notification referred to namkeens and only two items like Bhujiya and Chabena had been shown as illustration by use of words ‘Such as’ and therefore it did not restrict to only these two items but all such items which were namkeens. The product have been understood and accepted by the learned Asstt. Collector as namkeens cannot be denied the benefit on the pretext that the notification referred to two items and not to all other types of namkeen. He relied on the interpretation of the term illustrative terms appearing in a notification examined in the case of Ellora Paper Mills v. CCE as reported in 1991 (56) E.L.T. 489 and also the term ‘such as’ interpreted as illustrative word as rendered in the case of Gramophone Co. India Ltd. v. CCE as reported in 1991 (52) E.L.T. 247 para 15.
4. Smt. Sundaram, learned SDR referring to the arguments of Shri Sundarajan, learned consultant contended that the party had called fry snack food ‘namkeens’ only at a later date with a view to sack the reclassification to take the benefit of notification in question. She contended that the item could be considered as a Snack food and that all Snack foods cannot be treated as ‘namkeens’ for the purpose of the notification. Only namkeens of the type of Bhujiya and Chabena, which are in the nature of ready to eat condition can be considered as ‘namkeens’. The product in question required frying and it was not a ready to eat condition like Bhujiya or Chabena. Although the product is a ‘namkeen’ and not a ‘Sweetmeat’ preparation but it does not satisfy the illustration given in the notifications. She contended that both the authorities were right in rejecting the benefit of the notification in question.
5. We have carefully considered the submissions made by both the sides and have perused the records. The learned Collector in his order has upheld the appellants’ contention for classification of the product under Heading 2107 but, however, he has not decided the sub-heading in this Heading 2107 and he has denied the benefit of Notification No. 12/90. The learned Collector is of the view that the notification exempts namkeens like Bhujiya and Chabena and he has rejected the contention of the appellants that their product Fryums is nothing but namkeen. The learned Collector has held that the term Namkeen as used in the notification would denote such of those items which are ready to be eaten. In other words, these are fully prepared food stuff which do not require any further processing. The examples cited, that is Bhujiya and Chabena only clarify the situation that both these products are in a ready to eat condition and do not require any further processing except opening and eating. The learned Collector has contended that Fryums or Namkeens manufactured by the appellants could not be covered by this notification as the product required to be fried before it can be eaten. Therefore, on this ground, he has rejected the benefit of Notification No. 12/90 dated 20-3-1990 Before we could advert to examine the grant of benefit of the notification in question, we are required to fix the classification of this product. There is no doubt that this product falls under Heading 2107 which describes “Edible preparations not elsewhere specified or included”. The sub-headings are noted below :-
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Heading No. Sub-heading Description of goods Rate of duty
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21.07 Edible preparations not else-
where specified or included
21.07 2107.10 -Prasad or Prasadam Nil
2107.20 -Sterilised or pasteurised mil- Nil
tone
-Other
2107.91 -Put up in unit containers 15%
and ordinarily intended for
sale
2107.99 -Other Nil
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6. A reading of these sub-headings makes it clear that the product is not a Prasad or Prasadam, Sterilised or pasteurised miltone. Therefore, it will not come within the sub-headings 2107.10 or 2107.20. As the item is not put in a unit container and ordinarily intended for sale, it will not come within the Heading 2107.91. Therefore, the product has to be brought under the residuary sub-heading 2107.99 as ‘Other’ carrying nil rate of duty. As we have classified the product under the residuary product under the heading “Edible preparations not elsewhere specified or included which carries nil rate of duty, the question of raising any demand or of Excise duty may not arise. However, as arguments have been adduced with regard to the Notification No. 12/90 dated 20-3-1990, it would be proper for us to give finding in regard to the same.
7. The appellants before the lower authorities have stated that the items could be put in unit containers and if that be so, then their classification would merit under sub-heading 2107.91 which reads “Put up in unit containers and ordinarily intended for sale”. Therefore, it becomes necessary that the Notification No. 12/90-C.E. dated 20-3-1990 pertaining to Sl. No. 8 of the Table of the notification requires to be interpreted.
8. The parts of the notification. and SI. No. 8 in the Table is reproduced below :-
“In exercise of the powers conferred by Sub-section (1) of section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in column (3) of the Table hereto annexed and falling under the sub-heading No. of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), specified in the corresponding entry in column (2) of the said Table from so much of the duty of excise leviable thereon which is specified in the said Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) thereof –
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S. Sub- Goods Rate
No. heading
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8 2107.91 Papad, Idli-mix, Vada-mix, Dosa-mix, Nil
Jalebi-mix, Gulabjamun mix or nam-
keens such as Bhujiya, Chabena
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The Sl. No. 8 reproduced above mentions about various goods coming within sub-heading 2107.91. It has given illustration to the items Namkeens such as Bhujiya, Chabena. Now the question is as to whether these namkeens given in the notification is a general one including all types of namkeens or only to the type given therein like Bhujiya, Chabena by illustration. The learned Collector has interpreted the word ‘such as’ to mean namkeen should be of a kind of Bhujiya and Chabena. Although it is not in dispute that the item in question is a namkeen. As can be seen from the various items given in Sl. No. 8 namely Papad, Idli-mix, Vada-mix, Dosa-mix, Jalebi-mix, Gulabjamun-mix are all of a type which cannot be eaten straightaway but it requires to be fried. Chabena also comes in a type of item which requires to be chewed like Potato chips or fried Channa Masala or various types of fried masala dals. There can be any number of examples of namkeens in the form of Chabena which are mostly taken as a side dish. It can also be preferred to be eaten after sweetmeat. The item in question being like a Chabena is also a namkeen. The learned Collector’s placing restriction that it is to be eaten only after frying and therefore, is not covered under the notification is a very strict way of reading a notification. The notification cannot be read in a way as to whittle down its expression or to make the notification otios. The words ‘such as’ is only illustrative and not exhaustive. So long as the item satisfies the term Namkeen, the benefit of notification cannot be denied on the ground that it requires to be fried before use. There is no such understanding placed in the notification with regard to the frying of the item. Even if that be so, then the same would apply to all other items which are namkeens like Papad, Idli-mix, Dosa-mix, Jalebi-mix etc. which are required to be fried before they can be eaten.
8A. The learned advocate has brought to our notice the manner in which the illustrative words ‘such as’ have been understood. We take strength from the rulings produced before us.
9. In the case of Gramophone Co. India Ltd., the Tribunal has referred to the ruling of Jalal Plastic Industries while examining the expression ‘such as’ in para 15, which is reproduced below –
“The expression service industry is not defined but the language used is services of any description such as hotels etc. The expression ‘such as’ used is illustrative and the enumeration following the expression ‘such as’ is not exhaustive. (Jalal Plastic Inds. Co. v. U.O.I. 1981 (8) E.L.T. 653. The industry in dispute namely duplicating music system is similar to photo processing industry. Photo processing industry is excluded from the purview of Project Import Regulations. It follows from the above that duplicating music system is also a service industry therefore, it also gets excluded from the purview of Project Import Regulations. Therefore, the appellants are not entitled for registration of their contract under the relevant regulations.”
10. In the case of Ellora Paper Mills Ltd. (supra), the Bench has examined the Notification No. 142/81-C.E. which gave exemption to unbleached variety of paper (Kraft paper). The question was whether the notification restricted only to kraft paper or illustrative one of several kinds of unbleached varieties of paper. The Bench has observed as follows –
“The main emphasis of the notification in reference is for “exemption to unbleached varieties of paper (Kraft paper). The word ‘Varieties’ in plural does not restrict to one type of paper namely kraft paper alone. The definition of ‘Kraft paper’ as extracted from ISI : IS : 4661 – 1986 read with ‘mill wrapper’ although dictionary meaning of both the words as occurring in ‘Dictionary and Encyclopaedia of paper and paper making’ referred to above indicates the uses of both the paper as same. Kraft paper is a paper of high mechanical strength, while mill wrapper is a general term for course grades of wrapping paper. So long as the mill wrapper satisfying the condition of being unbleached variety of paper with not less than 75% of bagasse content, the paper is said to have satisfied the condition of the notification. The mention of kraft paper in parenthesis in the notification is an illustrative one. If the notification was to restrict only to paper of high mechanical strength then the wording should have been ‘unbleached’ variety of kraft paper’. Moreover, kraft paper in bleached quality is also available. The uses of unbleached variety of kraft paper with other unbleached variety of paper being common; therefore, the reading of the notification in question cannot be done in the strict sense, so as to give a narrow and restricted meaning, as given by lower authorities. It is well settled that the interpretation of the notification should not be done in such a way as to make the notification otiose or nugatory. So long as the plain meaning of the words could lead to interpretation to include varieties of unbleached paper and mill wrapper being one such, the benefit cannot be denied to the appellant. The appellants have submitted that the department has not disputed the bagasse content being not less than 75%. In that event the benefit of the notification in question cannot be denied to the appellants. However, there is no evidence placed before us to give our findings thereto. Therefore, the matter is remanded for determining the bagasse content and to grant the relief as per the terms of the notification.”
A reading of the above rulings confirms our findings and taking into consideration all the facts and circumstances, we are inclined to allow the appeal with consequential relief, if any.