2004 (5) TMI 99 - AT - Central Excise

Summary

Issues:
Classification of "Nescafe 3-in-1" and "Nescafe Pre-mix" under Central Excise Tariff - Heading 2101.10 or Heading 21.08.

Analysis:
The main issue in the appeals before the Appellate Tribunal CESTAT, New Delhi was the classification of "Nescafe 3-in-1" and "Nescafe Pre-mix" under the Central Excise Tariff. The appellant claimed classification under sub-heading 21.08, while the impugned order classified them under Heading 2101.10. The Commissioner noted that the items were coffee preparations with coffee extract as the main ingredient, leading to their classification under Heading 2101.10, which specifically covers preparations with a basis of coffee extract. The appellant argued that the items fell under Heading 21.08 based on Note 9(b)(g) of Chapter 21, but the Commissioner clarified that the note referred to preparations consisting of coffee, not coffee extract or essence.

In a previous case involving a similar product, the Tribunal had classified instant coffee chicory blend under sub-heading 2101.10, a decision upheld by the Apex Court. The appellant contended that Heading 21.08 should not be considered a mere residuary heading, citing the interpretation rules of the tariff. However, the Tribunal found that the items in question fell under Heading 2101.10 as coffee preparations made from coffee extract, in line with the tariff scheme and previous decisions.

Regarding the duty calculation, the Tribunal agreed with the appellant that the duty amount should be determined correctly, allowing Modvat credit and calculating duty on a cum-duty basis or as per Section 4A. The Tribunal set aside any penalty or interest claims, considering the dispute purely legal in nature. The appeals were disposed of confirming the classification under Heading 2101.10 but ordering a recomputation of duty and adjustments for credit on inputs.

In conclusion, the Tribunal upheld the classification of "Nescafe 3-in-1" and "Nescafe Pre-mix" under Heading 2101.10, rejecting the appellant's arguments for classification under Heading 21.08. The duty amount was to be recomputed, allowing adjustments for credit on inputs, with no penalties or interest imposed due to the legal nature of the dispute.