Commnr.Of Central Excise,New Delhi vs M/S.Connaught Plaza Rest.(P)Ltd.N.D

2. During the relevant period, the respondent-assessee was engaged in the business of selling burgers, nuggets, shakes, soft-serve etc. through its fast food chain of restaurants, named above. In so far as the manufacture and service of ‘soft serve’ is concerned, the assessee used to procure soft serve mix in liquid form from one M/s Amrit Foods, Ghaziabad; at Amrit Foods, raw milk was pasteurised, skimmed milk powder was added (the milk fat content in the said mixture is stated to be 4.9%, not exceeding 6% at any stage); sweetening agent in the form of sugar or glucose syrup and permitted stabilizers were added; the mixture, in liquid form, was then homogenized, packed in polyethylene pouches and stored at 0 to 40C. This material was then transported to the outlets under the same temperature control, where the liquid mix was pumped into a ‘Taylor-make’ vending machine; further cooled along with the infusion of air, and finally, the end product, ‘soft serve’, was drawn through the nozzle into a wafer cone or in a plastic cup and served to the customers at the outlet.

4. While adjudicating on the first show cause notice, vide order dated 31st May, 2000, the adjudicating authority held that : ‘soft serve’ was classifiable under heading 04.04. Describing the goods as “other dairy produce; edible products of animal origin, not elsewhere specified or included”, it held that the process undertaken by the assessee amounted to manufacture and the extended period of limitation was not applicable. However, while adjudicating on the second show cause notice, vide order dated 28th September, 2001, the adjudicating authority concluded that:

5. Being aggrieved, cross appeals were filed, both by the revenue as also the assessee, before the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi, as it then existed, (for short “the Tribunal”). The appeals arising from the first two show cause notices were disposed of by the main order, dated 29th January, 2003. The appeal arising from the third show cause notice was disposed of by the Tribunal vide order dated 3rd August, 2004, following its earlier decision in order dated 29th January, 2003. The Tribunal came to the conclusion that the process undertaken by the assessee, namely, conversion of soft serve mix to ‘soft serve’ amounted to manufacture and that ‘soft serve’ was classifiable under sub-heading 2108.91, describing the goods as “Edible preparations, not elsewhere specified or included” – “not bearing a brand name”, attracting nil rate of duty. The Tribunal held thus :-

11. In short, the case of the assessee is that “soft serve” is a product distinct and separate from “ice-cream” since the world over “ice-cream” is commonly understood to have milk fat content above 8% whereas ‘soft serve’ does not contain more than 5% of milk fat; it cannot be considered as “ice-cream” by common parlance understanding since it is marketed by the assessee the world over as ‘soft serve’; “ice-cream” should be understood in its scientific and technical sense; and hence, for these reasons, ‘soft serve’ is to be classified under heading 04.04 as “other dairy produce” and not under heading 21.05. On the other hand, Revenue claims that “ice-cream” has not been defined under heading 21.05 or in any of the chapter notes of Chapter 21; upon conducting enquiries it was found that ‘soft serve’ is known as “ice-cream” in common parlance; and hence, it must be classified in the category of “ice-cream” under heading 21.05 of the Tariff Act.

46. In view of the aforegoing discussion, we are of the opinion that the Tribunal erred in law in classifying ‘soft-serve’ under tariff sub- heading 2108.91, as “Edible preparations not elsewhere specified or included”, “not bearing a brand name”. We hold that ‘soft serve’ marketed by the assessee, during the relevant period, is to be classified under tariff sub-heading 2105.00 as “ice-cream”.

49. For the view we have taken, it is unnecessary to examine the issue whether the product in question bears a brand name.

50. Resultantly, the appeals are allowed and the impugned orders of the Tribunal are set aside, leaving the parties to bear their own costs.

Date: 27/11/2012 These Appeals were called on for pronouncement of Judgment today.

Hon'ble Mr. Justice D.K. Jain pronounced the judgment of the Bench comprising His Lordship and Hon'ble Mr. Justice Jagdish Singh Khehar.

The appeals are allowed and the impugned orders of the Tribunal are set aside, leaving the parties to bear their own costs.

[ Signed reportable judgment is placed on the file ] ITEM NO. IN Chambers SECTION III S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS CIVIL APPEAL NO. 5307-5308 OF 2003 COMMNR.OF CENTRAL EXCISE,NEW DELHI Appellant (s) VERSUS M/S.CONNAUGHT PLAZA REST.(P)LTD.N.D. Respondent(s) Date: 27/11/2012 These Appeals were taken up in chambers.

In the first page of judgment dated 27th November, 2012 pronounced in C.A. Nos. 5307-5308 of 2003, cause title shall be read as follows :

[ Signed reportable order is placed on the file ] REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION |"CIVIL APPEAL NOS. 5307-5308 0F 2003 | |COMMISSIONER OF CENTRAL EXCISE, | | APPELLANT | |NEW DELHI | | | |VERSUS | |M/S CONNAUGHT PLAZA RESTAURANT | |RESPONDENT | |(P) LTD., NEW DELHI | | | O R D E R In the first page of judgment dated 27th November, 2012 pronounced in C.A. Nos. 5307-5308 of 2003, cause title shall be read as follows :