2026-VIL-1102-CESTAT-BLR-CU
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CUSTOMS CESTAT Cases

Customs - Classification of chocolate flavour - Appellant, engaged in manufacture and trading of flavours for the food industry, imported chocolate flavour and classified it under Customs Tariff Heading 3302 10 10. The goods were cleared on 03.06.2019. Subsequently, based on audit observation, SCN was issued on 01.06.2021 proposing reclassification under Customs Tariff Heading 1806 9090 with differential duty demand, interest and penalty - Whether the imported chocolate flavour is classifiable under Customs Tariff Heading 1806 9090 (chocolate and other food preparations containing cocoa) or under Customs Tariff Heading 3302 10 10 (mixtures of odoriferous substances), and whether the demand is barred by limitation – HELD - A harmonious reading of the description under Customs Tariff Heading 1806 9090 and the relevant Chapter Notes reveals that for classification under this heading, the imported product must necessarily be a food preparation containing cocoa. The natural flavours and natural flavouring substances imported by the appellant are substances meant to be added to food and not substances for direct consumption as food. Therefore, they cannot be classified under the residuary heading 1806 9090 as chocolate and other preparations containing cocoa - The appellant produced entire details related to the imported goods while filing the B/E, and even though the goods were cleared under RMS, no allegation of suppression regarding classification could be made to invoke the extended period of limitation. Since the bill of entry was filed on 02.06.2019 and out of charge was issued on 03.06.2019, but the SCN was received on 07.06.2021 after expiry of two years from the out of charge order, the show cause notice is barred by limitation - The impugned order is set aside and the appeal is allowed
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