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2015 (10) TMI 156 - AT - Central ExciseClassification of goods - Classification under sub-heading 1704.90 or under sub-heading 1704.10 - Held that:- On the identical facts the Department had initiated proceedings against Chennai Unit and the Commissioner vide Order in original No.8/09 dated 31.03.2009 have confirmed duty demand of ₹ 5,47,94,432/-against Chennai Unit in respect of clearances of mentos mint, and six other products of similar nature during the period from March, 2003 to February, 2005. However, the Tribunal in respect of appeal filed against this order, has set aside the Commissioner's order vide final order dated 03.05.2013 on the grounds of limitation, Since the proceedings against the Gurgaon Unit are based on proceedings against the Chennai Unit, and since in this case also the show cause notice for demand of duty for the period from April 2003 to February, 2005 has been issued by 30th April 2008, primafacie the same would also be time barred. Goods covered under sub-heading 1704.10 would be those where it is the gum which gives them essential character and in-fact in terms of the Provisions of Food Adulteration Rules 1955 (para A/25.02.01) the bubblegums and chewing gums must contain not less than 12.5% to 14% of gums. The product, in question, contains contains 97% of sugar and glucose, about 2% fats and colours and flavours and about 1% or less of gum arabic which is used as stabilizer and emulsifier, and its function is to prevent the crystallization of sugar and maintain uniform distribution of the fat and this it is sugar which provides the essential character to the product not the gum arabic whose function is only as stabilizer and emulsifier. Thus, even on merit the appellants have strong primafacie case in their favour. - requirement of pre-deposit of the duty demand, interest and penalty for compliance with the provisions of section 35F would cause undue hardship to the appellant - Stay granted.
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