2006 (3) TMI 446 - AT - Central Excise

Summary

Issues:
Classification of 'Honey' under Central Excise Tariff.

Analysis:
The judgment involves a dispute regarding the classification of 'Honey' under the Central Excise Tariff. The appellants, M/s Charak Pharmaceuticals India Pvt. Ltd., filed appeals challenging the classification of honey. Both parties agree that the dispute revolves around the classification of honey. It is acknowledged that honey undergoes minimal processing like heating, cooling, staining, and filtration before being packed for marketing. The Explanatory Note to the HSN clarifies that natural honey, produced by bees or other insects without the addition of sugar or any other substance, falls under heading 0409. This heading specifically excludes artificial honey and mixtures of natural and artificial honey. The judgment notes the deliberate omission of natural honey from Chapter 4 of the Central Excise Tariff, indicating a legislative decision not to levy excise duty on natural honey as it is not a manufactured product.

The lower appellate authority had classified honey packed by the appellants as edible products of animal origin for a certain period. However, the Tribunal finds no support for this conclusion in the Explanatory Notes to the HSN. Natural honey is simply designated by floral source, origin, or color and does not qualify as a manufactured product subject to excise duty. A comparison between the Customs Tariff and Central Excise Tariff reveals that while the former includes natural honey under Chapter 4, the latter omits it and only lists edible products of animal origin. The Explanatory Note to the HSN includes examples like turtles' eggs and birds' nests under edible products of animal origin, but natural honey, even after minimal processing, does not meet the criteria of a manufactured product.

Consequently, the Tribunal holds that natural honey is non-excisable, leading to the dismissal of the Department's appeal and the allowance of the appeals filed by M/s Charak Pharmaceuticals India Pvt. Ltd. The demands raised against the appellants are deemed invalid due to the classification of natural honey as a non-excisable product.