The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that “chocolate flavour” imported for use as a flavouring substance in the food industry cannot be classified as a cocoa-based food preparation under Chapter Heading 1806 of the Customs Tariff Act, 1975.
The bench of P.A. Augustian (Judicial Member) and Pullela Nageswara Rao (Technical Member) ruled that flavouring substances added to food and are not meant for direct consumption as food.
The appeal was filed by Prova Flavours India Pvt. Ltd. against an order of the Commissioner (Appeals), Bangalore, which had upheld reclassification of imported “Chocolate Flavour” under Customs Tariff Heading (CTH) 18069090 and confirmed differential customs duty along with interest and penalty.
The dispute arose after the assessee imported “Chocolate flavour” through a Bill of Entry dated June 2, 2019 by classifying the goods under CTH 33021010 as “mixtures of odoriferous substances.” The goods were cleared on June 3, 2019. Subsequently, based on an audit objection, the department issued a show cause notice on June 1, 2021 proposing reclassification of the goods under CTH 18069090 as “Chocolate and other food preparations containing cocoa” and sought recovery of differential duty, interest and penalty.
The appellant argued that the imported product was a flavouring substance used in the food industry and not a cocoa preparation intended for direct consumption. It relied on the Customs Tariff Heading 33021010 covering “mixtures of odoriferous substances” and submitted that the product was recognised by the Food Safety and Standards Authority of India (FSSAI) as a flavouring substance under Product Category 99 relating to “substances added to food.”
The company further contended that the imported goods were covered by FSSAI licences for “Natural Flavours and Natural Flavouring substances” and that the Codex-based Food Categorisation System clearly treated such products as substances added to food and not food products themselves.
The Tribunal noted that Chapter 18 of the Customs Tariff Act deals with “Cocoa and Cocoa Preparations” and Heading 1806 specifically covers “Chocolate and other food preparations containing cocoa.” It observed that for a product to fall under CTH 18069090, it must necessarily be a “food preparation containing cocoa.”
After examining the records, invoices and technical specifications, the Tribunal found that the imported product was described as “Chocolate Flavour” intended for flavouring foodstuffs. It also noted that the supplier had classified the product under nomenclature 3302 1040 as mixtures of odoriferous substances.
The Bench observed that the department had incorrectly equated “chocolate flavour” with “chocolate” or “cocoa preparations.” It held that flavouring substances meant to be added to food could not be treated as food preparations themselves.
The Tribunal relied on several Supreme Court judgments, including CCE v. Parle Export Pvt. Ltd., Swastik Udyog v. CCEand Parle Agro Pvt. Ltd. v. Commissioner of Commercial Taxes, to emphasise that classification disputes must consider the nature, purpose and commercial understanding of the product.
On limitation, the appellant argued that the extended period under Section 28(4) of the Customs Act, 1962 could not be invoked because all relevant details regarding the imported goods had been disclosed at the time of filing the Bill of Entry. The company submitted that the goods were cleared after “out of charge” was granted by customs authorities and there was no suppression or misdeclaration.
The Tribunal accepted this contention and held that merely because the goods were cleared under the Risk Management System (RMS), it could not be alleged that the importer suppressed facts relating to classification. It observed that the show cause notice was issued beyond the normal limitation period of two years from the date of clearance and therefore the demand was time-barred.
The CESTAT held that the imported chocolate flavour was correctly classifiable under CTH 33021010 and not under the residuary heading applicable to cocoa-based food preparations. The Tribunal accordingly set aside the impugned order and granted consequential relief to the appellant.
Case Details
Case Title: Prova Flavours India Pvt Ltd Versus Commissioner of Customs, Bangalore
Citation: JURISHOUR-1125-CES-2026(BAN)
Case No.: Customs Appeal No. 20143 of 2023
Date: 05.05.2026
Counsel For Appellant: M. S. Nagaraja, Advocate
Counsel For Respondent: M. Sreekanth, Authorized Representative
