TMI Blog2016 (9) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... JC (AR) For the Respondent ORDER All these batch of appeals filed by two appellants M/s. Aachi Masala Foods P. Ltd. and M/s. Nazareth Foods P. Ltd. arise out of common Order-in-Original No. 4 to 11/2015 dt. 31.3.2015 passed by Commissioner of Central Excise, Chennai-II. Since the issue is common in these appeals and lies in a narrow compass, with the consent of both sides, after dispensing with requirement of predeposit, the appeals are taken up for hearing and disposal. Stay applications are disposed. 2. The issue involved is classification dispute of mixed spices (masala powder) manufactured by appellants whether under Chapter 9 or under Chapter 2103 of CETA'1985. 3. Shri N.Viswanathan, Ld. Advocate submits that the issue is already decided in appellants' own case vide Final order No.41820 to 41839/2015 dt. 11.06.2015 wherein appeals of assessee's including the present appellants were allowed. He placed a copy of said final order dt. 11.6.2015. He submits that the present dispute is for the subsequent period i.e. 1.4.2010 to 30.9.2014. 4. Ld. A.R reiterates the impugned order. 5. We have carefully considered the submissions of both sid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period involved is April 2004 to March 2009. (ii) The second appellant M/s. Aachi Masala Foods (P) Ltd. in appeal E/226/2008, E/337/2008 and E/40288/2014, disputed only four items viz., Rice bath powder, Leman bath powder,tomato bath powder and sukkumalli powder and the period involved is 2002 to march 2010. (iii) In the case of M/s. Maami Foods Pvt. Ltd. in appeal E/353 354/2010 and E/40380 E/40381/2014, they are manufacturers of 22 itemsthe items under dispute are viz., Meat masala, sambar masala, Biriyani masala, rasam powder, pickle masala, vegetable masalaetc, and the period involved is January 2004 to July 2008. They are not contestingthe classification of Bajjibondaand payasam mix (at sl.No. 24 27). (iv) The appellant M/s. Avitaa Food Products in appeals E/638, E/299 300/2011 are the manufacturers of 36 items by and large same as the above appellants. M/s. Arumuga Consumer Care are manufacturer of 14 items (same as above) 18. On perusal of records, we find that There is no dispute on the classification of pure powdered spices ie. Turmeric powder, chilli powder etc., and the dispute is only on the mixtures of one or more spices with or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pter; those constituting mixed condiments of mixed seasonings are classified in heading No. 21.03. Supplementary Note (3) reads as under. 3. The addition of other substances to spices shall not affect their inclusion in spices provided the resulting mixtures retain the essential character of spices and spices also include products commonly known as masalas . HSN Explanatory note for chapter 9 which is reproduced as under:- 1. Mixtures of the products of headings Nos. 09.04 to 09.10 are to be classified as follows : (a) Mixtures of two or more of the products of the same heading are to be classified in that headings; (b) Mixtures of two or more of the products of different headings are to be classified in heading No. 09.10. The addition of other substances to the products of headings Nos. 09.04 to 09.10 (or to the mixtures referred to in paragraphs (a) or (b) above) shall not affect their classification provided the resulting mixtures retain the essential character of the goods of those headings. Otherwise such mixtures are not classified in this Chapter; those constituting mixed condiments of mixed seasonings are classified in heading No. 21.03. These pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t spices means the spices specified in the schedule. In the schedule to Section 2(n), 52 items are listed eg. as chilly, ginger, turmeric, coriander etc. and the note to the schedule it is clarified that spices in any form are covered under spices including curry powders, spice oil, oleoresins and other mixtures where spice content is predominant. A combined reading of chapter note one and supplementary note 3 read with HSN explanatory note it is evident that mixtures of various spices with or without addition of other items are classifiable under chapter 0904 to 0910 as it retains its essential character. On perusal of the ingredients and the test reports of various masalas, we find that the percentage of spices content is 95% to 96%and the remaining are other materials. Further, we find that Board s Circular dated 15.04.1996 and 30.04.96 also clarified on the issue of classification of spices of various food mixture known as masalas and condiments falling under chapter 9 and chapter 2103. In this regard the Tribunal s Mumbai Co-ordinate Bench in the case of CCE Vs. Narendra Kumar CO. - 2008 (232) ELT 866 (Tri.-Mum.) on identical issue of classification of masala pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also as it is undisputed that 95% to 96% of the ingredients of the products in question are spices. Learned Jt. CDR placed heavy reliance on the decision of the Honble Supreme Court in the case of A.P. Products (supra) to submit that grinding and mixing of various spices and condiments in certain proportion, the ingredients lose their identity/character and a new product separately known in the market emerges i.e. the products in question are mixed seasonings. We find that in the case A.P. Products (supra) the Apex court was seized with a fact, which was totally different than the facts in this case. In that case the question before the Apex court was whether the resultant product would get covered under a specific entry of the schedule to the AP Sales Tax Act. It is also seen that Apex court was deciding the issue specifically as regards the inclusion in the schedule to the AP sales tax act. In our considered view the ratio laid down by the Honble Supreme Court was in respect of the facts and circumstances, of the case before them and may not be applicable in this case. 10. It is a settled law that in cases of classification chapter notes of HSN can be considered as guide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Heading 21.03 of CET, in others the same products are being classified under Heading 2108.90 as edible preparations not elsewhere specified or included . In the latter case, Chapter Notes 9(b) 9(c) of Chapter 21 are being relied upon for classifying these products under the subheading 2108.90. Trade interests have, however, argued that these products are merely additives for different food items and not readily consumable products through the simple processes of cooking, frying, boiling or adding with water, oil or milk. Hence it is claimed that the products in question cannot be classified under sub-heading 2108.90 of CET. 3. The matter has been examined. Spices are specifically covered under Chapter 9 of Central Excise Tariff and mixed condiments and mixed seasonings under Heading 21.03 of Central Excise Tariff. Heading 21.08 of CET on the other hand is a residuary entry which refers to edible preparations not elsewhere specified or included . While there are no definitions available for spices and mixed condiments and mixed seasonings in the Central Excise Tariff, the Explanatory Notes to the HSN give the following description of these products. Spices Spices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ood preparations for human consumption in their own right will go out of Chapter 9 or Heading 21.03 of CET and merit classification in the residuary Heading 21.08 provided they are not covered or included in any other heading of CET. 4.2 Viewed in the context, products like sambar powder, rasam powder, puliyogare mix or powder, vanghibhath mix or powder consisting or mainly spices and required to be added to cooked dal or cooked rice mainly for spicing, flavouring or seasoning would appear to merit classification as spices or mixed condiments and seasonings. On the other hand, products like instant sambar mix, instant rasam mix, instant spiced bhath mix (Bisibelebath) or instant Kharabhath mix consisting of dal or rice flakes or sooji along with spices and other substances and which can be made up into food preparations by simply mixing and boiling/cooking in water would merit classification as miscellaneous edible preparations of Heading 2108 of Central Excise Tariff. 5. In view of the above, Board desires that classification of each product be decided on merit having regard to discussions hereinabove. It can be noticed from the above reproduced Circular of CBEC and more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held by the noted Board s Circular referred to by the Commissioner. 13 . It is settled law that the classification of a product is decided on the question of market understanding of the product. The respondents herein had lead evidences before the lower authorities as regards the market understanding of the product. The respondent had produced before the lower authority, certificates given by reputed consumers of that products and of Institute of Hotel Management, Catering Technology Applied Nutrition, so as to indicate that the masalas manufactured by the respondents, are of best quality spices and given the flavor of the spices it gives a perfect fragrant and taste to the food. This evidences are not rebutted by the Revenue even today. We find that this provisions of law is now squarely covered by the decision of the Hon ble Supreme Court in the case of Union of India v. Garware Nylons Ltd. (S.C.) [1996 (87) E.L.T. 12 (S.C.)] wherein their Lordships were concerned with the classification of goods. Their Lordships held as under :- In our view, the conclusion reached by the High Court is fully in accord with the decisions of this Court and the same is justified in law. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the identical products, as is manufactured by them, from various Commissionerates. We find that the various Commissionerates spread all over India, had clearly spelt out, that the products in question are classified under Chapter 09 and in some of the Commissionerates, the assesses had not taken out the Central Excise registration certificate also. We find from the chart produced by the ld. Counsel, the ingredients of the products in question are identical to the products which are manufactured by other assessee situated in different Commissionerates. The question of uniformity taxation is of prime importance. We find that the Hon ble Supreme Court in the case of Damodar J. Malpani v. Collector of Central Excise as reported at [2002 (146) E.L.T. 483 (S.C.)] 16. As regards the other products like Rasam Powder, Chaat Masala, Tea Masala, we find that the reasoning given by us in respect of all other products in question as indicated in the above paragraphs would apply squarely. Ld. Jt. CDR submitted that classification of Rasam Powder would be covered by the decision of Tribunal in the case of MTR Food Products - 2000 (118) E.L.T. 392 (Tri.). We find that the products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts like instant Sambar Mix, Instant Rasam Mix, Instant spiced bhath Mix, (Bisibelebath) or Instant Kharabhath Mix consisting of Dal or Rice flakes or Sooji along with spices and other substances and which can be made up into preparations by simply mixing and boiling/cooking in water would merit classification as miscellaneous edible preparations under sub-heading No. 2108.90 of Central Excise Tariff attracting 20% duty. I submit that regarding Paras 5 and 6 it is submitted that as per the instructions given in the Ministry s letter F. No. 16/4/95-CX, dated 30-4-1996 (Circular No. 205/39/96-CX) all the goods manufactured by the petitioner except branded soap-nut powder, branded sundavathal, branded appalam and unbranded Turmeric are classified under sub-heading No. 0903.10 as spices and the same has since been approved. 6 . In the course of hearing of the writ petition the learned Counsels appearing for the respondents vehemently contended that the writ petition is pre-mature and should be dismissed. It is further contended that the petitioner instead of availing alternative remedies should not have approach this court. 7 . It is true that where alternative remedies ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the parties, the present petitioner - appellant not being a different entity, the present show- cause notices issued in respect of the first three items above, which were the subject matter in the earlier round of litigation, are nothing but illegal Though, normally, Courts will not interfere at the stage of show - cause notice, as has been held by this Court in the earlier round of litigation itself, when the very issuance of show- cause notice is illegal, the question of subjecting the appellant - petitioner to reply to the same does not at all arise. When the products have undergone only a change in the English name , the Revenue, only to give a different interpretation to the order of this court in W. P. No. 7029 of 1996, wherein the Revenue has been given liberty to proceed against the appellant - petitioner it there is any other item manufactured by the petitioner, not coming within the aforesaid entry . 20 . With regard to the other three products namely (1) Garlic Rice Powder, (2 ) Lemon Rice powder and (3) BajjiBonda powder, we are able to see that they did not figure in the above said writ petition, but the petitioner - appellant was issued with Registrati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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