Judgment:
1. The appellants manufactured P or P Foods and filed the Classification List claiming classification of PP Foods packed in tins and bottles under TI 1B and of similar goods sold in bulk under TI-68.
The Assistant Collector classified all those products claimed to be by the assessee under TI-68, under Item 1B of Central Excise Tariff. The Collector upheld his order. Hence this appeal.
2. The appellants have requested for disposal of the appeal on merits.
In the Appeal Memorandum and in the written submissions later made, it was claimed that where the goods were sold in bulk containers or where those were sold in the appellants' own containers but were not in pre-determined quantities, they had sought classification under TI-68, on the basis of the Trade Notice No. 35/84, dated 15-6-1984 issued by the Jurisdictional Collector. The Assistant Collector had gone against the contents of the Trade Notice. The Assistant Collector had erred in giving a limited interpretation to the word "fruit juice" in holding that 'fruit juice concentrate' could not be covered under the description. Their Classification was in terms of paragraph "c" & "d" of the said Trade Notice and, therefore, the change in classification was not warranted. Shri J.M. Sharma, Ld. JDR, arguing for Revenue placed reliance upon the judgment of the Tribunal in the case of Collector of Central Excise v. Modern Foods Industries India Ltd. - 1988 (37) E.L.T. 294 (Tribunal). He claimed that as per this judgment, unit container does not mean a container marked, numbered or relabelled with description weight etc. of the containers. He referred to that vide Circular No. B-5/1/69-CX. I, dated 21-3-1969. He also referred to the judgment of the Tribunal in the case of Collector of Central Excise, Calcutta v. H.M.M. Ltd., 1985 (22) E.L.T. 810 (Tribunal) where the definition of unit containers have been discussed. He submitted that vide these pronouncements containers whether small or large and those sold in retail as well as in wholesale were covered under the definition. Therefore, there was nothing wrong in the carboys from being termed as "containers". On these counts he justified the lower orders. He further submitted that undue reliance has been placed on the impugned Trade Notice on both the sides, at the cost of tariff entry itself. Referring to the judgment of the Karnataka High Court in the case of West Coast Paper Mills, Dandeli v. Superintendent of Central Excise, Dandeli and Ors., 1984 (16) E.L.T. 91 (Cal); he stated that the Trade Notice itself cannot justify a classification other than that can be arrived at by reading the tariff item.
3. We have carefully considered the various submissions made before us by the Revenue and those made in the written submissions by the Appellants.
4. The Tariff entry of Item No. 1B read as "Prepared or preserved foods put up in unit containers and ordinarily intended for sale...." The issue here is of the interpretation of the term "unit containers." The definition of the word "unit" as given in the Webster New Dictionary is "a known determinate quantity by which other quantities of the same kind are measured". The same definition is referred in the letter from the Ministry, dated 23-1-1969 cited by the Ld. DR. The wording there is "in short, "unit container" mean a container, whether large or small, designed to hold a pre-determine quantity or number which the manufacturer wishes to sell, whether it be to a wholesaler or retail dealer, or to another manufacturer." 5. In the judgment in the case of HMM HA., (supra) also the definition given is "unit containers are those containing basic standard quantity into which an item of supply is divided, issued or used for ease of sale, transport, etc." The same interpretation occurs in the majority judgment in the case of Collector of Central Excise, Chandigarh v.H.P.M.P. Corporation Ltd., 1988 (34) E.L.T. 160 (Tribunal). In this case the argument that for the purpose of Item 1-B it was sufficient that the containers should be uniform even if the contents varied, was rejected by the Tribunal on the observation that such an interpretation would render the word "unit" in 'unit containers' superfluous. Even in the case of Modern Foods Industries, (supra) cited by the Revenue the weight of the containers was uniform at 3 kgs but that the packages were not marked with details such as weight of the material. The ratio of this judgment, therefore, cannot be said to go against those others referred to above.
6. Thus, we find that in order to pass the test of "Unit containers", it is necessary that the containers must contain pre-determined uniform quantities of contents. In the present case the classification list has to [two] annexures. Annexure I where classification under Tariff Item 1B is claimed, the products are shown to be packed in tins or bottles of pre-determined standard weight. Thus, one description says - "orange marmalade 1.05 kg tin, 4 kg tin and 500 gms bottle. The details as to the containers are not shown in the case of Annexure-II to the classification list which contains the disputed products. The claim made before both the lower authorities was that the containers was supplied by the buyers and the contents were not in pre-determined quantity. It was further claimed that in the case of one product, namely, orange juice concentrate, 4.1 preserved; the containers were supplied by them but that the contents were not uniform. The Assistant Collector held that the contents should be deemed to be of pre-determined quantity since the capacity of the container is known.
He conceded that where the buyer was to send his containers perhaps the dealer would not know the capacity of such containers but held that in this case the containers belonged to the assessee themselves. In this case before him the plea was made that only in one case the containers belonged to them and in all other cases they belonged to buyers. As per his own logic he should have accepted the contentions of the assessee in the case of remaining 6 items. The ld. Collector did not notice this anomoly in disposing of the appeal.
7. Trade Notice No. 35/84 figures prominently in these proceedings.
This Trade Notice refers to fruit juices packed in retail or bulk packs of predetermined quantity and advises that these would fall under TI-1B. It refers to fruit juice sold in bulk packs in buyers' containers and sold in containers not of pre-determined quantity and advises that these would fall under TI-68. The Assistant Collector followed the letter of the Trade Notice to such an extent as to deny the coverage of the Trade Notice to orange juice concentrate. The ld.JDR referring to the Karnataka High Court judgment claimed that the Trade Notice could not change or suggest the classification of the product and therefore, the reliance placed on this Trade Notice by the lower authorities was wrong.
8. We have carefully seen the judgment. In this case by virtue of a Trade Notice the classification of certain types of paper were suggested under a particular tariff item. The Hon'ble Court found that the classification suggested by the trade notice was not in consonance with the headings of the various tariff entries and held that the attempt to classify something which does not fall under the classification was not open to the Central Excise Authorities. The Trade Notice before us in this case does not suffer from such a defect.
The prime requirement of pre-determine quantity which is the soul of a unit container has been well brought out in the Trade Notice. The assessee was perfectly justified in relying upon the Trade Notice to seek guidance for classifying these products. Both the lower authorities have erred in not interpreting the Trade Notice in the manner it required to be interpreted. The claim of the assessee is that the bulk packing of the disputed products is not always of uniform weight has not been seriously examined by either of the lower authorities. The Ld. Collector's orders referred to contracts entered into by the appellants with M/s. Herbetsons Ltd. as also with M/s.
Forum House Confectionary Pvt Ltd. which contained specifications of ownership of the container and would also contain the provision whether each container would contain PP Foods of pre-determined weight or not.
In the absence of these details it would not be possible for us to hold that the claims made by the appellants in respect of the disputed products are correct. We, therefore, remand the case back to the Assistant Collector who would examine the contracts and any other documents available to determine whether the bulk packing were of uniform standard weights or not and proceed to determine the classification of the goods in de novo proceedings. This appeal is disposed of in those terms.