Custom, Excise & Service Tax Tribunal
M/S Remedy Health Products Pvt.Ltd vs The Commissioner on 14 December, 2015
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench Division Bench Court I Appeal No.E/195/2006 (Arising out of Order-in-Appeal No.56/2006(H-IV)CE, Dated 29-12-2006 in Passed by Addl.C.C&C.E.,Hyderabad-IV) For approval and signature: Honble Mr C J Mathew, Member (Technical) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s Remedy Health Products Pvt.Ltd. Hyderabad ..Appellant(s) Vs. The Commissioner. C&C.E, Hyderabad: IV ..Respondent(s)
Appearance Shri Kartan Talwar, & Shri G.Prahalad Advocates for the Appellant Ms. Sudha Koka. AR for the Respondent Coram:
Honble Mr Justice G Raghuram, President Honble Mr C J Mathew, Member (Technical) Date of Hearing: 14/12/2015 Date of decision: 14/12/2015 FINAL ORDER No._______________________ [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 February 2005 and were being cleared at nil rate of duty as per notification no. 6/2002-CE, dated 1st March 2002. The description for the purpose of rate of duty was preparation of vegetables, fruit, nuts or other parts of plants including jams, fruit jellies, marmalades, fruit or nut puree and fruit or nut pastes, fruit juices and vegetables juices, whether or not containing added sugar or other sweetening matter.
2000-10 Put up in unit containers and bearing a brand name- 16% 2001-90 Others - Nil
3. 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 --- Guava kg.
2007 99 30 --- Pine apple kg.
2007 99 40 --- Apple kg.
2007 99 90--- Other kg. Consequent on this change, Hajmola Aam was classified as 200799 10 and Hajmola Imli as 200799.90 with tariff rate of 10%. With this the manner in which it was packed and presented ceased to be the determinant for levying the duty.
4. The appellant continued to clear goods under the old tariff heading and by availing exemption under notification no.6/2002-CE dated 1st March 2002. Show Cause Notice No.26/2006-Adjn(ADL) 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 Rs.8,61,936/- on clearances valued at Rs.52,81,469/- between March 2005 and December 2005 besides interest and further imposing penalty of Rs.50,000/- under rule 25 of Central Excise Rules,2002. The first appellate authority, Commissioner of Customs and Central Excise (Appeals-II) Hyderabad vide order no.56/2006(H-IV) CE dated 29th December 2006 concurred with the findings and order of the lower authority. Aggrieved by the denial of the exemption notification, appellant is before us for quashing the impugned order.
5. The appellant, as manufacturer of fruit preparations put up in unit containers and bearing a brand name, was eligible for availment of notification No.6/2002-CE dated 1st March 2002 which exempted all goods covered by CETH 2001 10. The said heading 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 existing notifications stood substituted by the new numbers. The impugned order has concurred with that of the original authority in holding that such a substitution will not apply to S.No.9 of Notification No.6/2002 dated 01-03-2002 because the distinctive description in the erstwhile CETH had not been replicated in the transferred entries in the revised chapter 2 of schedule to Central Excise Tariff Act, 1985; it was also held that, with simultaneous issue of a new exemption notification 3/2005-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 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 the tariff; hence the contention of the appellant that the 2005 notification supplemented the earlier notification. It was also brought to our notice that the 2002 notification was rescinded by notification no.2/2006-CE dated 1st March 2006 to convince us that the interpretation placed by Revenue was not tenable.
9. Doubtlessly, 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 item No.9 of notification no.3/2005-CE date 24th February 2005 impliedly revised the exemption granted, till then, to all preparation put up in a unit container and bearing a brand name. In the face of the stated intention in paragraphs 3 of circular No,.808/5/2005-CX dated 25th February 2005, it would appear that the specific purpose of the notification was nought but retention of the effective rates. The continuity of existing effective rate of duty that were operative till then through exemption 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 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.
12. That the two were intended to operate as mutually exclusive exemptions is also amply clear from the rescinding of the 2002 notification by notification no. 21/2006-CE dated 21st March 2006. The said notification goes on to grant immunity to all acts prior to the rescinding by incorporation of except as respects things done or omitted to be done before such reasons
13. Even if the contention of the Learned Authorized Representative that notification 6/2002 CE dated 1st March 2002 is invalidated by alteration in the description of the tariff and that the alternative notification 3/2005-CE dated 24-02-2005 specifically excluded Yumsticks which conforms to the description of the exclusion, the continued existence of notification no. 6/2002 is not disputable. The clause supra in the rescinding notification confers immunity to goods which continued to be cleared under that notification. Accordingly, the notice issued to the appellant bereft of legal sustenance and all proceedings thereon are not legal and proper.
14. The decision of the Tribunal in Indian Petrochemicals Corporation Ltd vs Collector of Central Excise, Bombay [(2004(168) ELT 66(Tri-Del)] settles the principle that assessee is entitled to the mere beneficial consequence between existing alternatives notifications. This principle found approval of the Honble Supreme court in Share Medical Care Vs Union of India [(2007(209) ELT 321(SC)].
15. For the above reasons, the impugned order is set aside and appeal allowed.
(Pronounced in open court) (G RAGHURAM ) PRESIDENT (C J MATHEW) MEMBER (TECHNICAL) DKS 7