TMI Blog2020 (7) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... also does not cover specifically any product which can also be covered under Chapter 20 - On the other hand, Chapter Notes to Chapter 20 also do not exclude any products which may fall under Chapter 13. Chapter Heading 2009 clearly covers fruit juices and vegetable juices, unfermented and not containing added spirit whether or not containing added sugar or sweetening matter. It is equally logical to classify the aloe vera juice and amla juice under Chapter Heading 2009 as claimed by the appellant. However, we find no ground to call the powders manufactured by the appellant as juices as powder is a solid and the juice is a liquid. There is nothing in the description of Chapter Heading 2009 to suggest that it also includes powders. Therefore, the aloe vera powder and amla powder manufactured by the appellant cannot be classified under Chapter Heading 2009 - as far as the aloe vera juice and amla juice are concerned, both chapter heading 1302 and Chapter Heading 2009 equally merit consideration and therefore Chapter Heading 2009 being the last in the numerical order prevails in terms of General Rules of Interpretation Rule 3(c). Therefore, aloe vera juice and amla juice are classif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. The remaining five appeals are against these orders of Commissioner (Appeals) The details of these appeals are as follows: Appeal No. E/25/12 E/27333/13 E/20088/14 E/20772/14 E/30953/16 E/30952/16 OIA No Date 33/2013(H-IV)CE dt30.03.2013 70/2013(H-IV)CE dt 11.09.2013 118/2013(H-IV)CE dt 21.11.2013 Hyd.Cex-004-006 007-16-17-CE dt 29.04.2016 Hyd-Cex-004-006 007-16-17-CE dt 29.04.2016 OIO No. Date 32/2011 dt 11.10.2011 74/2012-C.Ex dt 31.08.2012 77/2013-Adjn(ADC)C.Ex Dt. 31.07.2013 107/2013(ADC) C.Ex dt 31.07.2013 14/2014-Adjn(ADC) C.Ex Dt 31.01.2014 18/2014-15-Adjn(JC) C.Ex Dt 05.02.2015 Period April 2007 to February 2011 March 2011 to January ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Amla juice and Amla powder from amla fruit. They registered with central excise department and have been filing ER-I returns with the department, as required. Initially they classified their products under Chapter 6 of the Central Excise Tariff. A show-cause notice dated 09.04.2010 was issued to them under Section 11A invoking extended period of limitation proposing to reject the classification of the products under Chapter 6 of the Central Excise Tariff and instead proposing to classify them under Chapter 13 and accordingly demanded differential duty along with interest. It was also proposed to impose a penalty equal to the differential duty upon the appellant. Subsequent demands are periodical demands which also confirmed differential duty along with interest and imposed penalties upon the appellant. The issues which fall for consideration in these appeals are: (i) whether the Aloe Vera juice, Aloe Vera powder, amla juice and amla powder manufactured by the appellant are classifiable under chapter 6 as originally classified by the appellant or under Chapter Heading 13021919 as confirmed in the impugned order or under Chapter Heading 20098990 as now claimed by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods 6. The most important point of dispute in these appeals is the classification of the goods under the Central Excise Tariff. Unlike its predecessors, this tariff is based on the internationally accepted Harmonised System of Nomenclature (HSN)- a system which classifies every conceivable type of goods including plants and animals in a systematic manner. HSN, as well as the Central Excise Tariff are divided into Sections and Chapters within each Section. The scope of each section including specific inclusions and exclusions are spelt out in the Section notes of that section. Similarly, the scope of each Chapter including specific inclusions and exclusions are spelt out in the Chapter notes of that chapter. The Chapters are given a two digit numbers and within each chapter, tariff headings of the goods are given in four digits and further into six digit sub-headings. Although the Central Excise Tariff is based on the HSN, it is not exactly identical and some modifications are made to suit the purpose of the tariff. 7. Despite the systematic classification of the goods and the Section notes and Chapter notes, there could be ambiguity as to which of the two competing ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other person who may have borne the burden of the duty) to claim refunds. Time limits have been set out both for the department to issue an SCN proposing a demand of differential duty and for the claimant to claim refund. A demand under Section 11A can be raised by the Revenue only within one year. However, if the non- levy, short levy, non-payment, short payment or erroneous refund is by reason of (a) fraud; (b) collusion; (c) wilful misstatement; (d) suppression of facts; or (e) contravention of any provisions of the Act or the rules made thereunder with an intent to evade payment of duty, the demand under Section 11A can be made within five years from the relevant date. Interest for short paid duty 10. Interest is also payable under Section 11AB on the amount so short paid. Penalties 11. If the short levy, non-levy, short payment or non payment is on account of the aforesaid fraud, collusion, wilful misstatement or suppression of facts or contravention of any provisions with an intent to evade payment of duty, a penalty equal to the amount of duty evaded is leviable under Section 11AC of the Act. 12. Further, subject to the aforesaid provisions of Section 11A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee). 16. According to the appellant aloe plant has an outer rind and a yellow bitter liquid just inside it known as aloe latex. Inside this latex is the inner leaf juice. The Central Excise Tariff Heading 13021919 is applicable only to the aloe latex which is separately extracted and not to the aloe juice which they are manufacturing. They explained the process which they follow for manufacture as follows:- Step 1: The aloe vera leaves are sorted out manually from foreign matters, damaged portions of the leaves are separated. Step 2: Clean the Aloe vera leaves and by decontamination in washing conveyer to remove the mud and surface adhering material Step 3: Thereafter leaves are kept in chlorine water to remove bacterial or fungal infections present in the leaves. Step 4: Chlorine water treated leaves are transferred to the washing conveyer to spray the water for dechlorination. Step 5: After the leaves are finally cleaned, leaves are transferred on the elevated conveyer for crushing the cleaned aloevera leaves. Step 6: Crushed the whole leaves in fruit mill. Step 7: The crushed material is sent for filtration into GYRO screen to separate the pulp and juic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch gives a more specific description should be preferred over the one which gives a general description. He would submit that Chapter Heading 13021919 deals with extracts. Therefore, it is a more general description and Chapter Heading 2009 is a more specific description which covers juices which must prevail. Further, as per General Rule of Interpretation 3(c), if the goods cannot be classified with reference to Rules 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. He would, therefore, argue that even as per this Rules 3(c), their products should fall under Chapter 20. He relies on the decision in the case of Forever Living health Vs CCE Mumbai [2006(193) ELT 45 (Tri-Mum)] in which it was decided that aloe vera gel, aloe vera nectar and aloe vera freedom were held classifiable under 2009.90. He also relied upon the case law of Commissioner of Commercial Taxes Lucknow Vs Forever Living Imports (I) Ltd [2018(9) GSTL 11(A11) upheld by the Hon ble Supreme Court in 2018(9) GSTL J39(SC) in which it was held that aloevera juice was classifiable under Entry No. 103 of Schedule-II of U.P. Value Add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd input services which may be allowed to them. Further, he would submit that since they have sold the goods without charging any excise duty thereon, the cum tax benefit treating the sale price as cum-duty price will be available to them which may also be allowed. 21. Per contra, learned A.R. supports the impugned order. He would submit that the products manufactured by the appellant are rightly classifiable under Chapter Heading 1302 and not under 2009 as claimed by the appellant. He would submit that it is not in dispute that the appellant has manufactured aloe vera juice, aloe vera powder, amla juice and amla powder by extracting them from the aloevera plants and amla fruit. These are squarely covered under Chapter Heading 1302 and not as vegetable juices under 2009. A perusal of the juices covered under 2009 shows that juices such as oranges, grape fruit juice, pineapple juice, tomato juice, apple juice, mango juice etc. are covered in this Heading. Aloe vera juice and amla juice and aloe vera powder and amla powder are not in this category. Countering the argument of the learned counsel that only yellow latex which is a yellowish layer in aloe vera gets covered under 1309, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation has been correctly invoked. He also supports the demand of interest on the differential duty and imposition of penalties in the impugned orders. 22. After hearing both sides, both sides were given 10 days to make additional submissions. Learned counsel for the appellant made additional submissions on 16.03.2020 which reiterated the aforesaid arguments. 23. We have considered the arguments on both sides and perused the records. Coming to the first question of classification, there is no dispute at this stage that the original classification by the appellant under Chapter 6 was not correct and the dispute now is between Chapter 13 and Chapter 20. Chapter 13 deals with lac, gums, resins and other vegetable saps and extracts. Chapter note 1 specifically shows that Chapter Heading 1302 applies, interalia, to liquorice extract and extract of pyrethrum, extract of hops and extract of aloes. This note also excludes certain types of products to which this heading does not apply. The exclusions in this chapter note do not cover aloevera juice, aloevera powder, amla juice and amla powder. The exclusion also does not cover specifically any product which can also be covered unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that the demand on aloe vera juice and amla juice for the entire period is to be calculated reckoning their classification under Chapter 20 and the demand of duty for aloe vera powder and amla powder needs to be upheld. 26. As far as the question of limitation is concerned, it is evident from the order of the adjudicating authority that the only ground on which the extended period of limitation has been invoked and upheld in this case is that the appellant has wrongly classified the products in their ER-1 returns and paid less duty. We find that in terms of Section 11A of the Central Excise Act, extended period of limitation can be invoked only in cases of fraud, collision, wilful misstatement, suppression of facts or violation of Act or Rules with an intention to evade payment of duty. Claiming wrong classification cannot be the ground for invoking extended period of limitation, therefore, the entire demand beyond normal period of limitation needs to be set aside and we do so. 27. Learned counsel for the appellant has pleaded that cum duty benefit and also credit on inputs if any applicable be given to them. We find in favour of the appellant on this ground. The duty the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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