TMI Blog2008 (6) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... ala, 6)Meat Masala, 7)Chicken Masala, 8) Tandoori Chicken Masala, 9) Special Garam Masala, 10) Tea Masala/Super Masala, 11)Pav Bhaji Masala, 12)Sambhar Masala, 13)Chaat Masala, 14)Jiraloo, 15)Rasam Powder, 16)Pani Puri Masala, [hereinafter referred as products in question). It appeared that the assessee wrongly classified the said products under Ch.0903.10 instead of Ch. S.H. 21.03 Schedule of Central Excise Tariff Act, 1985 and clearing the same at nil rate of Central Excise Duty in as much as :- Rasam Powder : - The assessee classified the product under Ch.Sh.0903.10 and claiming nil rate of C.Ex. duty. Thus the notice claimed the product as spices but it was found out that the product was marketed as Rasam Powder and not as the spices. Moreover it is described as the product as perfect blend as mentioned on the packing of the product which aptly indicates that the product is simply not a mixture . It was a known fact that Rasam Powder was a particular recipe or particular food preparation/dish. The ingredients mentioned on packaging of the product indicated that it contained Pigeon Pea [Toover Dal/Arhar Dal] which was definitely not the spices . The resultant product di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are not simply spices as generally known but these were identified along with particular recipe e.g. pani puri , pav-bhaji , Chhole , biryani , pulav , Tandoori chicken etc. Furthermore the directions for use printed on the packaging of these products [e.g. Punjabi Garam Masala, Chat Masala, Sabji Masala etc.] indicated that initially the preparation was to be done by user as they i.e. user normally did and thereafter the product in question were to be added for additional/particular flavour to the dishes. These directions for use distinctly bring out that these products were different from spices as commonly known/perceived and being used. These products were not substitute to the masala/spices but an addition as mentioned above to give specific flavor/taste as known for particular recipe. Even the product Garam masala of the noticee was to be used in addition to the spices being normally used by customers as indicated on the packaging of the product. Thus all above products were used in particular recipe and were not simply spices as claimed by the noticee for Central Excise classification. In other words with addition of these products a specific recipe with specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not possible to separate the various ingredients. It was further submitted that due to this it is not possible to ascertain what is the essential character of the products in question. It is his submission that respondents have not given the percentage of ingredients in each of the products in question. It was submitted that even today the respondent has not given the same, despite specifically requesting for the same. He draws our attention to the cartons of the various products in question, and submits that they are mixture of various spices and other ingredients and submits that the ingredients include items, which cannot be classified as spices under chapter No.9 of the schedule to the Central Excise Tariff Act, 1985. He draws our attention to the Chapter note no.3 of Chapter 9 and submits that plain reading of note no.3 would indicate that any addition of other substances to spices is allowed and will be covered under chapter 9, provided the resulting mixture retain the essential character of spices included in the said chapter heading i.e.0903. It is his submission that in the absence of the percentage of the ingredients it is not possible to come to a conclusion that product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apter heading no.0903 as they are not spices per se and hence there has to be determination of the entity. For this proposition he relies upon the decision of the Tribunal in the case of Denso Kirloskar Industries Pvt. Ltd., Vs Commr. Of Cust. (Appeals), Chennai - 2003 (158)ELT 187 . It is submitted that adjudicating authority has erred in not noting the relevant chapter notes and section notes while passing the impugned orders. It is submitted that the chapter notes and section notes have over-riding force on the respective headings. For this proposition he relies upon the order of the tribunal in the case of Tractor and Farm Equipments Ltd., and others Vs Collector of Customs, Madras and others - 1986 (25) ELT 235 . It was submitted that the past practices followed by the department should not a hurdle to take a different view as is held in the case of Eastern Pigments (P) Ltd., - 1999 (107) ELT 510. For the proposition that in that case it may be that the products in question were earlier classified under chapter 9 but the revenue is not precluded in taking a different view now on the very same products. It was submitted that the tribunal in the case of Hindustan Lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in case of taxation there has to be uniformity. For this proposition he relies upon the decision of the Apex court in the case of Damodar Malpani Vs CCE - 2002 (146) ELT 483 (SC) and also decision of Tribunal in the case of R.K. Chemicals Vs. Commr of Customs - 2007 (220) ELT 160 and in the case of Thermosystems Vs CCE, Hyderabad - 2004 (178) ELT 402. It was further submitted that the revenue was given liberty by the Tribunal to rebut the evidence submitted by the respondent and draws our attention to the rebuttal letter to point out that there is no rebuttal of the information obtained under RTI act. He draws our attention to chapter note no 3 of chapter 9 and submits that that said note has three parts viz vegetable products and mainly used as condiments, other added ingredients can be present provided the essential character is maintained and they are commonly known as Masalas . It is his submission that in reply to the show cause notice the respondent had taken a specific ground that the products in question contain only 4% to 5% of other ingredients and it is his submission that the revenue accepts this, as there is no rebuttal in the grounds of appeal. He re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are nothing but mixtures of spices and are marketed as such. 6. In rejoinder learned Jt. CDR would submit to be classified under chapter the ingredients should be only spices and the respondent did not adduce evidence that products in question do not include other ingredients. 7. We considered the submissions made by both sides at length and perused the records. The issue in this case is regarding the correct classification of the products in question. The adjudicating authority has come to the conclusion that the products in question merit classification under chapter heading no. 0903 while the revenue is disputing the same. In order to appreciate the rival claims it is necessary to reproduce the competing tariff entries, those are as under: 09.03 Spices 0903.10 - Put up in unit containers and Bearing a brand name Nil 0903.90 - Others unit containers and bearing 16% Sauces, ketchup and the like and Preparations therefore; mixed Condiments and mixed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the spices is not retained. We find that this proposition of the learned Jt. CDR is without any evidence. It is not brought on records that by addition of these ingredients the essential character of spices is not retained. It is seen that that the revenue has relied upon the report of the Dy. chief chemist, which is in itself not very clear. We find that the respondent during the hearing and the proceedings before the adjudicating authority, has always mentioned that the products in question had various different spices in powder form up to 96% of the total ingredients and other ingredients formed only 4% to 5% of the total ingredients. We find that the revenue has not disputed these contentions with any contrary evidence and hence the submissions of the learned Jt. CDR that the respondent has not submitted the percentages of the ingredients to arrive at the essential character of the products in question seems to be totally mis-placed. If the 96% of the total ingredients are spices then by mere addition of some quantity of other ingredients may not be sufficient to arrive at the conclusion, that by addition of these other ingredients the mixture of spices has not retained t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 2. This Chapter does not cover Cubed pepper (Piper cubeba) or other products of heading no. 12.11 . It can be noticed that chapter note no. 3 of chapter 9 of CETA is almost same but for the inclusion of masala in the chapter heading no. 0903. This seems to be a marked deviation for the purposes of the classification in the Indian context. It is a common knowledge that the Indian cuisine includes mixtures of various spices that are commonly known as Masala . The inclusive portion would cover in its ambit the products in question in this case as there is no contrary evidence led by revenue. 11. We further find that the Central Board of Excise and Customs vide Circular No.205/39/96-CX dt. 30.4.1996 were clearing doubts regarding the classification of Indian traditional convenience food mixes, masalas and condiments we may reproduced the same. Board has received representations from Indian Food Industries Association and others seeking clarification as regards the classification of various Indian t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing substances of Chapters other than Chapter-9, in such proportions that the mixture has no longer the essential character of a spice within the meaning of Chapter-9 (Vol. 1 Page 158). 3.2 While the Explanatory Notes in HSN distinguish between spices on the one hand and mixed condiments and mixed seasonings on the other, the English Dictionary meanings and statutory bodies dealing in quality specifications of spices, condiments and seasonings often use these words interchangeably. What is however emphasised in the literature on the subject is that the essential character of these substances is in their function, viz., to add flavour, aroma and pungency to various food preparations. 3.3 Chapter Notes 9(b) and 9(c) of Chapter 21 of CET no doubt give an indication of the type of preparations which are intended to be included in Heading 21.08 of CET. However, it must be remembered that Heading 21.08 is a residuary entry in Chapter 21 and the Rules for the interpretation of the Schedule require that the heading which provides the most specific description shall be preferred to headings providing a more general description. Further, Heading 21 in HSN excludes spices of Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well settled law that if Revenue wants to reclassify the products, then it has to lead evidence. Assessee cannot be asked to prove the negative. 12. We find that the Tribunal in the case of Commissioner of Central Excise Commissioner of Central Ex. Cus., Guntur Vs. Crane Betel Nut Powder Works, as reported at 2007 (208) E.L.T.3767 (Tri.Bang.) was seized with an identical issue of classification whether Mouth freshner will get covered under Chapter Heading No.09.03 of Central Excise Tariff or under Chapter 21 of the Central Excise Tariff Act. The Bench held as under:- We have carefully considered the submissions and have perused both the orders. The finding given by the Commissioner is very exhaustive. He has analyzed every aspect of the matter and also in the light of the HSN Explanatory notes. The Revenue wants the product to be classified under Chapter Heading 21.03, which description deals only with sauces and ketchups. The item does not fit into the said items described in Chapter Heading 21. The learned JDR relied on the judgment rendered in the case of MTR Food Products v. CCE, Bangalore - 2000 (118) E.L.T. 392 (T), which deals with Sambhar mix/Rasam mix, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue to disprove the said materials by adducing proper evidence. Unfortunately, no such attempt was made. As stated, the evidence led in this case conclusively goes to show that Nylon Twine manufactured by the assessee has been treated as a kind of Nylon Yarn. Hence, it is to be classified under Item 18 of the Act. The Revenue has failed to establish the contrary. We would do well to remember the guidelines laid down by this Court in Dunlop India Ltd. Vs. Union of India [1983 (13) E.L.T. 1566 (SC) = (AIR 1977 SC 597 - at page 607], institution, wherein it was stated:- .when an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause . (Emphasis supplied) 14. It is also to be noted that the Revenue s Endeavour in this case is to seek classification of the products in question under Chapter heading No. 21.03/21.08. The main plank of arguments of the Revenue is that these are all mixed condiments and mixed seasoning. In the matter of taxability of the product under the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile upholding the decision of the Assistant Collector, the Collector did not consider this aspect of the matter at all. The point was again taken specifically in the appellants appeal before the Customs, Excise and Gold (Control) Appellate Tribunal. The Tribunal however dismissed the appeal and said : The appellants have stated that some of the manufacturers who were producing similar goods, were not paying any excise duty on their production. These matters are not before us and it is neither possible nor desirable for us to deal with these matters. Suffice it to say that each and very case has to be examined in the light of our above observations, and it is for the competent Central Excise Officers to come to correct decisions in consonance with the principles of uniformity, equity and justice . It is difficult to understand the reasoning of the Tribunal. The least that the Tribunal could have done in the interest of uniformity was to call upon the Revenue Authorities to explain why they were making a distinction between the appellants product and that of M/s. Chandulal K. Patel without subjecting the appellants product to any chemical analysis. In their appeal fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissionerates, the question of classifying the products in question under Chapter 21, as excisable, would give rise to dichotomas situation. 15. We find from the records that one of the product manufactured by the respondents i.e. Jiralu is a product which does not find mention in any of the competitors products nor the adjudicating authority has considered the issue from various angles. In view of this, we are of the considered opinion as regards the classification of this product, the issue needs to be re-considered by the adjudicating authority. 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) ELT 392 (Tri.)]. We find that the products in question in this case is different than the product in the case of MTR Food Products (Supra). In the case MTR Foods the products was Rasam Mix itself which was to be just added to boiling water, vehicle in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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