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M/s Remedy Health Products Pvt. Ltd. Versus The Commissioner C&C. E, Hyderabad: IV

2016 (8) TMI 32 - CESTAT HYDERABAD

Classification - Effect of conversion from 6 digit classification to 8 digit classification w.e.f. 1.3.2015 - continuity of exemption for fruit preparations put up in unit containers and bearing a brand name - Held that:- the appellant claimed that the notification of 2005 was not a substitute for earlier notification but was necessitated to give effect to nil rate of duty in the erstwhile tariff as notification No. 6/2002-CE was related to goods packed and presented in the manner described in t .....

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duty structure in any manner. Implementation of this intent was possible only by harmonious reading of the two notifications. - From the factual matrix, it would therefore, appear that notification 3/2005-CE excludes goods of upto 20 put up in a unit container and bearing a brand name because that being already covered by the existing notification 6/2002-CE did not require reiteration. - That the two were intended to operate as mutually exclusive exemptions is also amply clear from the .....

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r, & Shri G.Prahalad Advocates for the Appellant Ms. Sudha Koka. AR for the Respondent ORDER [Order per: C J Mathew] 1. The limited issue in this appeal is the dispute on eligibility for exemption in notification no.6/2002-CE dated 01-03-2002 in relation to clearance effected by the appellant between March 2005 and December 2005. 2. The appellant, M/s Remedy Health Products Pvt Ltd, manufactures Yumsticks for M/s Dabur India Ltd claimed to be classifiable under CETH 2000-10 till 28th Februar .....

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With effect from 1st March 2005, the entire chapter was recast as part of the exercise of conversion from the six digit code to eight digit code. Thereafter, the said entry moved to 2007 of CETH: 2007 JAMS, FRUIT JELLIES, MARMALADES, FRUIT OR NUT PUREE AND FRUIT OR NUT PASTES, OBTAINED BY COOKING, WHETHER OR NOT CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER 2007 10 00 - Homogenised preparations kg. - Other: 2007 91 00 - Citrus fruit kg. 2007 99 - Other: 2007 99 10 - Mango kg. 2007 99 20 - Gu .....

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) dated 3rd April 2006 was issued as to deny them the benefit of exemption being availed by appellant. The original authority vide order-in-original no.30/2006 dated 26th October 2006 confirmed duty liability of ₹ 8,61,936/- on clearances valued at ₹ 52,81,469/- between March 2005 and December 2005 besides interest and further imposing penalty of ₹ 50,000/- under rule 25 of Central Excise Rules,2002. The first appellate authority, Commissioner of Customs and Central Excise (App .....

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was restricted to food preparation put up in a unit container and bearing a brand name with tariff rate of 16% while all other preparation of vegetables, fruits, or nuts, or other part/plant which were not so packed and presented were subject to nil rate of duty or tariff . 6. The conversion to eight digit classification, being a revenue neutral exercise, intended to continue the exemption available till issue of notification no. 1/2005-CE dated 24th February 2005 by which the reference in any e .....

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-CE dated 24th February 2005, the notification 6/2002-CE ceased to exist. 7. Learned Authorized Representative submitted that exclusion of all goods of chapter 20 put up in a unit container and bearing a brand name from the scope of exemption under Notification 3/2005-CE dated 24th February 2005, was deliberately intended to levy duty on such goods so presented for retail sale. 8. Learned Counsel for the appellant claimed that the notification of 2005 was not a substitute for earlier notificatio .....

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oubtlessly, nil rate of duty for the preparation of other than those put up in a unit container and bearing a brand name could not be subject to levy merely because of a reordering of codes of the chapters in the tariff. A uniform tariff rate had been applied to all goods with the change and a specific exemption notification that gave effect to nil rate of duty was required to ensure a revenue-neutral transition. Therefore, there is no merit in the contention of Revenue that the exclusion of ite .....

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notification were enabled through notification 1/2005 CE dated 24th February 2005. 10. From a reading of the circular dated 25th February 2005, supra, it appears that the exercise of transiting to eight digit code in the tariff was not intended to alter the effective duty structure in any manner. Implementation of this intent was possible only by harmonious reading of the two notifications. 11. From the factual matrix, it would therefore, appear that notification 3/2005-CE excludes goods of upt .....

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