TMI Blog2008 (7) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... these appeals are identical these appeals are disposed off by a common order. 2. The relevant facts that arise for consideration are M/s. S. Narendra kumar and Co. holders of Central Excise Registration No. AAAFS1245BXM002 located at 4/B, Everest House, L.B.S. Marg, Vikhroli, Mumbai 400 083 [hereinafter referred as 'the noticee'] were engaged in the manufacture of products viz. (1) Sabji Masala (2) Punjabi garam Masala, (3) Kitchen King, (4) Chhole Masala, (5) Biryani Pulav Masala/Shahi Biryani Masala, (6) Meat Masala, (7) Chicken Masaia, (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 inasmuch 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 fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ram Masala, (3) Kitchen King, (4) Chhole Masala, (5) Biryani Pulav Masala/Shahi Biryani Masala, (6) Meat Masala, (7) Chicken Masala, (8) Tandoori Chicken Masala, (9) Special Garam Masala, (11) Pay Bhaji Masala, (12) Sambhar Masala, (13) Chaat Masala, (26) Pani Puri Masala :- As mentioned at Sr. 1 2, all these products we:e also classified as spices under Ch.Sh.0903.10 claiming nil rate of Central Excise duty. These products were also described as 'perfect blend' which indicated that the same were not simply, mixtures. All these products 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue is seeking the classification under chapter heading no. 2103 and 2108 as 'products of other edible preparations not elsewhere specified'. At the outset he draws our attention to the report of the Deputy Chief Chemist that was brought on record by an application. It is his submissions that deputy chief chemist after conducting the tests on the samples of the appellant, has opined that 'Masala powder' are obtained from mixing of different ground spices and common salt and the proportion of different spices could not be determined, as it is 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicate that the products in question would fall under chapter heading no. 2103 or 2108. He draws our attention to the said chapter note in chapter 21 of HSN. He also draws our attention HSN headings of chapter 9 and chapter 21. It is his submission that the adjudicating authority has not considered all this and has erred in passing the orders dropping the proceedings initiated by SCNs. It is submitted that the determination of nature of entity is a must. It is the submission that in this case the products in question do not merit classification under chapter 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. v. Commr. of Cust. (Appeals), Chennai 2003 (158) E.L.T. 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 overriding force on the respective headings. For this proposition he relies upon the order of the tribunal in the case of Tractor and Farm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He draws our attention to the information obtained by the respondent under RTI from various commissionerates and submits the products in question are identical except the brand name. He also produces a comparative chart to indicate the ingredients of the products vis-a-vis respondent's products and submits that all the ingredients are same. It is his submission that in the cases of their competitors either the products in question are classified under chapter 9 or it has been informed that the units are manufacturing non-excisable goods. It was submitted 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 J. Malpani v. CCE - 2002 (146) E.L.T. 483 (S.C.) and also decision of Tribunal in the case of R.K. Chemicals v. Commr. of Customs - 2007 (220) E.L.T. 160 and in the case of Thermosystems v. CCE, Hyderabad - 2004 (178) E.L.T. 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 RT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks - 2007 (208) E.L.T. 376 for the submission that this case squarely covers the issue in favour of respondent. It is submitted that the respondent were filing the declarations with the department about the products in question and during interregnum period these very same products were dutiable and they discharged the duty, due which it cannot be said that there was misdeclaration. It is his submission as regards the Rasam powder, Tea masala, chaat masala and jiraloo, that revenue has not adduced any evidence that these products cannot be classified under chapter 9, it is his submission that these four products are nothing out 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 tat the products in question merit classification under ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with other ingredients. The ingredients in the products in question are combination of the spices and some more ingredients. It is seen that in addition to spices, the ingredients include mainly 'asafoedita', 'rock salt', 'dry mango' etc. It is the submission of the learned Jt. CDR that by addition of these ingredients the essential character 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 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% to5% 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 ingredien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent 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. 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity does not affect the essential character of the mixture as a spice, (Vol.1 Page 61). Condiments /Seasonings Mixed condiments and mixed seasonings containing spices differ from spices and mixed spices of Headings 09.04 to 09.10 in that they also contain one or more flavouring or seasoning 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 which are intended to be included in Heading 21.08 of CET. However, it must be remembered that Heading 21.08 is a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and merit classification in the residuary heading 21.089. It is to be noted that in the case before us, the products in question there is no evidence that, these products are capable of being used as food preparation for human consumption in their own right, it is 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 v. Crane Betel Nut Powder Works , as reported at 2007 (208) E.L.T. 376 (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 sauce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence in that behalf even before the first adjudicating authority. Especially in a case as this, where the claim of the assessee is borne out by the trade inquiries received by them and also the affidavits filed by persons dealing with the subject matter, a heavy burden lay upon the revenue 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. v. Union of India [1983 (13) E.L.T. 1566 (S.C.) = (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, if 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 Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Collector, the appellants again raised the issue specifically that the process followed by and the product of the appellants were identical with that of M/s. Chandulal K.P. Patel and Company and that the appellants product should be similarly classified under Heading 24.01. While 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal, uniformity in classification is to be maintained in respect of the products. Since the assessees had produced evidence, that identical products of their competitors are either not taxable or reported as exempted falling under chapter 09, in various Commissionerates, 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 opin on 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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