ORDER
Jyoti Balasundaram, Vice President
1. The issue in this appeal against the order of the Commissioner of Central Excise, Pune who has confirmed duty demand of Rs. 11,28,46,060/- and imposed a penalty of Rs. 50 lakhs relates to classification of 2 products viz. ‘Cheetos Masala Balls’ and ‘ Cheetos X & O’ manufactured and cleared by the appellants herein during the period December, 2003 to August, 2005 – whether under CET sub-heading 1904.10 covering “prepared foods obtained by the swelling or roasting of cereals or cereal products and put up in a container, as held by the Commissioner or under CET sub-heading 2108.99 covering “edible preparations, not elsewhere specified or included bearing a brand name” as contended by the appellants.
2. We have heard both sides. The ingredients of Cheetos Masala Ball are corn meal, rice meal, gram flour, wheat fibre, water and seasoning, while, the ingredients of the second product are corn meal, edible oil, seasoning and water As seen from the adjudication order, the manufacturing process is as under:
i) Blending:- Blending is done to equilibrate flour contents in Corn meal. Corn meal is charged in a machine called blender and it is thoroughly blended there. From there it is conveyed to the extruder hopper by conveyor.
(ii) Extrusion:- Extruder has nine zones, temperature of which is maintained by separate heaters provided with temperature controllers. The screw of the extruder pushes the material forward up to discharge point. At the end of the extruder, the die block is placed. The die block has a provision for the placement of die sets through which meal blend is extruded in a hot atmosphere. Cutter blade assembly cuts the collates off allowing production of the desired length. As the meal blend is forced out, water vaporizes causing popping or expansion of the meal. Conveyor carries the expanded collates away to the drying chamber.
(iii) Drying:- In the drying chamber moisture content of the collate is reduced to 1-2%.
(iv) Seasoning Application:- The dried collates are applied with slurry of seasoning powder and vegetable oil in this operation.
(v) Packaging:- Seasoned collates are packed after weighing.
3. The assessees’ contention that the products in dispute are commonly known as ‘Namkeens’ and therefore by virtue of Note 10 to Chapter 21 which provides that “sub-heading Nos. 2108.91 and 2109.99 include Sweetmeats commonly known as ‘Misthan’ or ‘Mithai’ or by any other names, and they also include products commonly known as ‘ Namkeens’, ‘bhujia’, ‘mixture’, ‘chabena’ or by any other name,” and such products “remain classified in these subheadings irrespective of the nature of their ingredients”, the correct classification would be as claimed by them under CET sub-heading 2108.99 merits acceptance in the light of the Tribunal’s order in the case of Globe Confectionery v. CCE, Allahabad , wherein the Tribunal has held that Note 10 to Chapter 21 has over-riding effect and has ruled out classification of Rasgulla or Peda as sugar confectionery under Chapter 17.04 (which covers sugar confectionary) and to classify them as misthans or mithai under Heading 21.08 of the Schedule to the CETA 1985.
4. We also see force in the appellants’ submission that since both products contain not only cereals like corn meal or rice meal but also gram flour, wheat fibre etc. their classification under heading 19.04 is ruled out in the light of the Tribunal’s order in CCE, Lucknow v. Tiemack Snack Food Pvt. Ltd. , wherein, the Tribunal has held that Piknik fried namkeen snack food containing potato flour in addition to refined vegetable oil, rice flour etc. was not classifiable under Heading 19.04 as it was not made from cereal or cereal products alone, and upheld the Commissioner’s order classifying the product under Heading 21.08. It is also pertinent to note that the earlier stand of the department was that the process of manufacture undertaken by Tiemac Snack Food Pvt. Ltd. was the same as that undertaken by the appellants herein. The comparison of the manufacturing process would also confirm the same. There is yet another reason why the disputed products cannot be classified under Heading 19.04 and that is for the reason that meal blend is cooked by heating and since cooking takes place, the goods are not covered under heading 19.04 which covers only prepared goods obtained by swelling or roasting of cereals or cereal products, as held by the Tribunal in the case of Collector, Coimbatore v. Nektar Food Products .
4. In the light of the above discussion, we hold that the products in dispute fall for classification under CET sub-heading 2108.99 and hence set aside the impugned order and allow the appeal.