Customs, Excise and Gold Tribunal - Bangalore
Shri Abraham J. Tharakan, Chairman And ... vs The Commissioner Of Central Excise on 11 October, 2006
Equivalent citations: 2007(115)ECC132, 2007ECR132(TRI.-BANGALORE)
ORDER T.K. Jayaraman, Member (T)
1. These appeals have been filed against Order-in-Original No. 38/2005 dated 7.10.2005 passed by the Commissioner of Central Excise, Cochin.
2. The issue in these appeals is the correct classification of SUMERU Brand of fish, prawns and other food preparations of meat (as described in the Order-in-Original) produced and cleared by the appellants. The Adjudicating Authority has classified the impugned goods under Central Excise Tariff Heading No. 1601.10. Further, he has confirmed an amount of Rs. 42,30,929/- for the period from June 2003 to March 2004 under Section 11A of the Central Excise Act 1944. Interest under Section 11AB has been demanded. A penalty of Rs. 10,00,000/- under Rule 25 of the Central excise Rules 2002 has been imposed on the appellant unit. A personal penalty of Rs. 5,00,000/- has been imposed on A.J. Tharakan, Chairman and Director of the appellant unit under Rule 26 of the Central Excise Rules 2002. The appellants strongly challenge the impugned order.
3. Shri A.K. Jain, learned advocate appeared on behalf of the appellants and Shri K. Sambi Reddy, learned JDR appeared for the Revenue.
4. The learned advocate urged the following points.
(i) The appellant unit is engaged in the processing of fish, shrimps, prawns, etc., which are purchased from others. The Revenue conducted investigations and came to the conclusion that the impugned items are chargeable to duty under Chapter 16 (S.H. No. 1601.10) of CETA 1985.
(ii) The case of the Revenue is based on the following facts.
a. Usage of Sodium Tri Poly Phosphate (STPP) b. Usage of Sodium chloride c. Usage of natural paprika d. Blanching
(iii) The Commissioner did not take into account the four certificates given by MPEDA, CIFT and Kerala Fisheries College on the ground that the same had not been relied on in the Show Cause Notice and also that the context, materials, circumstances on the basis of these had been obtained by the appellants was not disclosed to him by the appellants.
(iv) The Commissioner relied on the test report of Export Inspection Agency (EIA), Chennai and rejected the ground of jurisdiction of EIA, Chennai to test the samples.
(v) The Commissioner denied cross-examination of two chemists whose reports Revenue relied.
(vi) The classification of the goods under 1601.10 is not correct in view of the following grounds as brought in the four certificates relied on by the appellant.
a. For booked prawns/shrimps, the total plate counts (at 37 C) do not exceed 10,000 whereas these are 1,00,000 for peeled, deveined and frozen or raw shrimps/prawns.
b. A blanched product cannot be treated as ready-to-eat or cooked or partially cooked or prepared foodstuff. It still needs to be cooked for consumption.
c. Usage of sodium-chloride and STPP in fish/crustaceans is a part of salting, chilling and freezing, and is not beyond the scope of these process; and that such usage does not contribute to cooking.
d. Blanching is an essential pre-requisite for chilling and freezing and thus a part of these processes.
e. Usage of natural parprika has nothing to do with any kind of preparation, cooking or preservation of shrimps.
(vii) The certificates produced by the appellants have not been controverted by any other certificate from another competent authority. The following case laws are relied on:
a. B.P.L. Pharmaceuticals Ltd. v. CCE, Vadodara.
b. Panama Chemical Works Ltd. v. UOI.
c. Mangal Textile Mills Ltd. v. UOI.
d. Inter Continental (India) v. UOI
(viii) The Commissioner has observed that the above certificates were given by the individuals implying thereby that these had not been given by the Originations. This is factually wrong. The above certificates on the letter-heads of the respective organizations and have been signed by various persons in the capacity of the Office Bearers/Executives of these organizations.
(ix) The two officials of EIA, Chennai during their cross-examination did not dispute the clarification given in these certificates.
(x) The Commissioner's finding that only those crustaceans (which include prawns and shrimps) fall in Chapter 3 which are in shells and boiled in water (and not which are deveined and deshelled or which have been prepared or preserved and put up in unit containers), is beyond the Show Cause Notice. The Commissioner's finding would imply that the deveined /deshelled crustaceans received in the appellant's unit from the Peeling-Sheds would themselves fall in Chapter 16, being not in shells and that being so the same would not attract any further levy even otherwise. This negates the HSN Explanatory Notes as per which crustaceans whether in shell or not or whether in parts chilled, frozen, dried and salted are covered by Chapter 3.
(xi) Placement of crustaceans in unit containers is not excluded from the purview of Chapter 3.
(xii) The Commissioner has not disclosed in his order as to how he says that chilled, frozen, salted crustaceans can be cooked in 45 - 90 seconds. He gives no evidence or material therefore.
(xiii) The term 'partially cooked' used in EIA, Chennai's reports cannot be equated to the term 'cooked' used in Chapter 16.
(xiv) Heading 16.01 covers only preparations of crustaceans. The appellant submitted before the Commissioner that the terms 'preparations' means foodstuff, which in turn mean cooked/ready to eat products. This has been ignored by the Commissioner.
(xv) For preparations, STPP (which is inedible) has to be totally absent in the preparation and edible ingredients like vinegar, oil, wine, spices have to be there.
(xvi) The two expressions 'prepared' and 'preserved' are distinct. The first one refers to edible ingredients but the second may or may not be edible. In case the second one is inedible, it cannot contribute to preparation at all, because for the purpose of preparation, only edible stuff can be used and the moment the ingredient is inedible, it cannot contribute to preparation. STPP is inedible. The Legislature used the word 'prepared' but did not use the word 'preserved' in Note 2 under Chapter 3 as against both these expressions appearing together under heading 16.01 i.e. 'prepared or preserved', but only for fish and caviar/caviar substitutes but not for crustaceans. The submissions escape the notice of the Commissioner. Chapter 16 CET covers only the 'preserved fish' but not 'preserved prawns'. This also escaped the notice of the Commissioner. It is a matter of fact that fish does not need/include prawns. In other words, only 'preserved fish' are covered under Chapter 16 and not 'preserved prawns', which will remain under Chapter 3 only.
(xvii) In Chapter 16 CETA three expressions appear in relation to Fish (i) preparation of fish (ii) prepared fish (iii) preserved fish. The three expressions have different connotations. 'Preparation of fish' means ready to fish/cooked fish whereas the 'prepared fish' refers to food preparations containing more than 20% by weight of fish. Another expression 'prepared fish' refers to products appearing under HSN Explanatory Notes 1 to 3. The third expression 'preserved fish' is also explained in HSN Explanatory Notes 2 & 3. However, In Chapter 16, there is nothing like preserved crustaceans, which means that prawns and shrimps (which are crustaceans) and which have been preserved by use of sodium chloride or STTP cannot fall under Chapter 16. Otherwise Chapter 16 shall also cover 'preserved crustaceans' as well as 'preserved fish'. In the absence of the expression 'preserved crustaceans' appearing under Chapter 16, the 'preserved crustaceans would fall in Chapter 3.
(xviii) Denial of retest by the Commissioner and that too only in his Order-in-Original, despite the same having been applied within 13 days, much before the time limit prescribed along with requisite fee of Rs. 8,000/- is violative of the Principles of Natural Justice as well as contrary to the departmental supplementary instructions. The following three decisions were relied on:
a. 1998 (33) ELT 13 (T) Kiran Spinning Mills v. CCE, Bombay.
b. 2003 (129) ELT 701 (T) Rathi Ispat Ltd. v. CCE, Meerut.
c. Yorks Exports v. CC (Exports), Mumbai.
(xix) The Commissioner's finding that CRCL, New Delhi is beyond his jurisdiction is not correct in view of Board's instructions dated 3.5.1956 appearing in Customs Appraising Manual Volume-III. The retesting can be done only by the CRCL, New Delhi irrespective of the fact whether the testing was done by the Customs Lab or by any other outside agency.
(xx) The denial of appellant's request for the cross-examination of the two Chemical Examiners of EIA, Chennai namely Shri P.K. Kalaeselvan and Shri S. Sampooranam (who had tested the samples) and that too in the OIO is contrary to the law laid down by the Tribunal in the case of CC, Chennai v. S.S. Leather Exports reported in 2003 (135) ELT 338, which judgment though cited does not even find in the impugned order.
(xxi) Commissioner's reliance on the EIA's test reports is not sustainable for the following reasons.
a. The sample being given to persons not entitled to test any samples under the Central Excise Law. Referred to Central Excise Notification No. 54/99 (NT) dated 22.9.1999.
b. This is also contrary to the law laid down by the Karnataka High Court in the case of Sri Krishan Rajendra Mills Ltd. v. ACCE.
c. EIA, Chennai has jurisdiction only in the states of Tamil Nadu, Andhra Pradesh and Pondicherry. For Kerala, there is a separate EIA Lab at Cochin.
d. The Commissioner ignores another submission that the Custom House Lab, Cochin had recommended testing at CIFT or MPEDA lab only but the department on its own, sent the samples to EIA, Chennai for some undisclosed reasons.
(xxii) Section 11AB is not sustainable because that Section is not attracted when no fraud or suppression is involved. They relied on the case lawCCE, Jaipur v. KEC International.
(xxiii) Penalty on the appellant - company under Rule 209 is not sustainable in respect of classification dispute. The following decisions are relied on.
a. 2002 (150) ELT 1228 (T)CCE, Indore v. Syncon Formulation (I) Ltd.
b. Holostick India Ltd. v. CCE, Meerut-II.
c. 2004 (178) ELT 678 (T) Bhola Indus. Pvt. Ltd. v. CCE, Delhi.
d. CCE, Chandigarh v. Dabur India Ltd.
e. Indocom Projects Equipments Ltd. v. CCE, New Delhi.
f. Anand Metal Industries v. CCE, Ghaziabad.
(xxiv) With regard to penalty on appellant No. (i) under CER 26 there is absolutely no discussion on his role, hence penalty is not sustainable. The following case laws are relied on.
a. Walchand Nagar Inds. v. CCE, Pune.
c. 2002 (147) ELT 1213 (T) Harish Mehra v. CCE, Chandigarh.
5. The learned JDR stated that the Order-in-Original has dealt with all the points raised by the appellant and a very detailed finding is given justifying the classification of the impugned items under Chapter 16. He requested the Bench to uphold the Order-in-Original.
6. We have gone through the records of the case very carefully. The main issue is the correct classification of the impugned products. According to the appellants, the impugned products merit classification under Chapter 3 of CETA, whereas the Department's contention is that the classification would be under Chapter 16. Under Chapter 3, the rate of duty is nil but under Chapter 16 the rate of duty is 16%.
6.1 Let us try to understand the impugned product and the processes undertaken by the appellants. The impugned products, which are normally packed in polythene pouches are described as peeled and deveined prawns. There are different sizes like medium prawns, tiny prawns, small prawns, large prawns, jumbo prawns, etc. Chapter 3 of the CETA has the following heading 'Fish and Crustaceans, Molluscs and other Aquatic Invertebrates'. The impugned product is not fish, it is described as prawns. We understand that the prawns fall under a broad category of aquatic creatures known as crustacean. The Oxford Advanced Learner's Dictionary gives the meaning of crustacean in the following manner "any creature with a soft body that is divided into sections, and a hard outer shell. Most crustaceans live in water. CRABS, LOBSTERS and SHRIMPS are all crustaceans". The terms prawn and shrimp are synonymous. What is known as prawns in British English is known as Shrimp in American English. Let us examine the Entry No. 0301.00 in the Central Excise Tariff. The description of the Entry reads as follows "Fish and Crustaceans, Molluscs and other Aquatic invertebrates". Prima facie, prawns appear to be classifiable under Chapter 3 of CETA. Now let us turn our attention to Chapter 16, the heading of Chapter 16 is as follows "Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates". There is a basic difference between these two Chapters. The word preparation is used in Chapter 16 but the same is not present in Chapter 3. For a layman, a preparation with regard to edible things means that some cooking process has been carried out. Therefore, on a careful examination of the entries, we can understand that Chapter 3 refers to items, which have not undergone cooking process to make them food preparations, whereas Chapter 16 implies that various cooking processes have been carried out on the products, so as to make them food preparations. The entry 16.01 reads as follows "Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates, including sausages and similar products, extracts and juices, prepared or preserved fish and caviar and caviar substitutes".
6.2 Having gained a broad understanding of Chapter 3 and Chapter 16, let us try to understand the process carried out by the appellants in respect of the impugned products. In the brief facts of the case in Annexure-A to the Show Cause Notice dated 9.7.2004, Para 3 describes the process. Shri Cherian Xavier, General Manager of the appellant company explained that in the case of preserved prawns, different sizes of prawns are peeled and beheaded according to specifications. Thereafter the product is block frozen and then thawed to melt the ice coverings. This product is then treated with Sodium Tri Polyphosphate (STPP) and Sodium Chloride. The product from this stage then passes through a conveyor belt for the purpose of blanching (spraying steam). It is then individually quick frozen and then packed in polythene pouches. The above process uses a word blanching. What is blanching? The normal dictionary meaning of the verb blanch is 'to prepare food, especially vegetables by putting it into boiling water for a short time'. The blanching process is not confined only to the impugned products under consideration in this appeal. In Wikipedia (online encyclopedia) describes blanching as follows:
Blanching is a cooking term that describes a process of food preparation wherein the food substance, usually a vegetable or fruit, is plunged into boiling water, removed after a brief, timed interval and finally plunged into iced water or placed under cold running water (shocked) to halt the cooking process.
Uses of blanching • Peeling Blanching loosens the skin on some fruits or nuts, such as onions, tomatoes, plums, peaches, or almonds.
•Flavor Blanching enhances the flavor of some vegetables, such as broccoli, by releasing bitter acids stored in the cellular structure of the food.
•Appearance Blanching enhances the color of some (particularly green) vegetables by releasing gases trapped in the cellular material that obscure the greenness of the chorophyll. Since blanching is done - and halted - quickly, the heat does not have time to break down chlorophyll as well.
•Shelf life Blanching neutralises bacteria and enzymes present in foods, thus delaying spoilage. This is often done as a preparatory step for freezing vegetables.
Blanching can also describe deep frying in oil at a lower temperature as with the initial cooking of French fries/ chips.
The above information indicates that blanching is one of the processes in cooking and it is a preparatory step before freezing the vegetables. In the present case, the blanching is done by passing of steam on the impugned product for a short period. One thing is clear that though branching is one of the processes in cooking, a blanched product cannot be considered as cooked preparation. Even in the brief facts of the case annexed to the show cause memo, there is a note on blanching which is reproduced below:
"Blanching" is a cooking technique by which food items are heated for a brief period of time to a temperature high enough to destroy the enzymes present in the issue. Blanching stops the enzyme action, improves the colour and shortens the drying and re-hydration time by relaxing the tissue walls, so that moisture can escape or reenter more rapidly. Blanching also reduces shrinkage and cooking time of finished products and kills yeast and mold.
6.3 The appellant has produced few expert opinions on the issue. The Director of Marine Products Export Development Authority (MPEDA), in his letter dated 22.7.2004 has stated that blanching of crustaceans and molluscs is to reduce surface bacteria and enhance colour. He has categorically stated that 'a blanched product cannot be treated as ready to eat and the product needs to be cooked again before consumption'. The Director of Central Institute of Fisheries Technology (CIFT) in his letter dated 20.7.2004 has stated that blanching is a term that describes a method of processing used during slating, chilling and freezing of marine products. He has also stated that a blanched product cannot be termed as partially cooked, prepared and ready to eat. The Dean of College of Fisheries, Kerala Agricultural University in his letter dated 7.2.2005 has stated that a blanched product is not a partially cooked product that is ready to eat. It only gives a sterilizing effect reducing the bacterial load at surface levels. The product has to be cooked before consumption. Thus, the experts who are dealing with crustaceans and other aquatic invertebrates have all categorically stated that a blanched product cannot be considered as a cooked product. It is also pertinent to note that blanching is carried out before freezing which is a process covered by Note 2 of Chapter 3. In the light of the above opinions, it is very difficult to hold that the impugned products can be considered as preparations of crustaceans falling under Chapter 16 of CETA.
6.4 Now let us turn our attention to chapter 3. According to Note 2 of Chapter 3, the said Chapter covers products, which are chilled, frozen and salted, in brine, dried or smoked but not otherwise prepared and crustaceans, in shell simply boiled in water. From the above note, we understand that the Chapter 3 products also undergo certain processes. Since Chapter 16 covers the preparations of items mentioned in Chapter 3, a question arises as to what is the difference between the products in Chapter 3 and those in Chapter 16? The Central Excise Tariff itself does not throw much light on the issue.
Therefore, we can take the help of the explanatory notes of HSN. In Chapter 3 of the Explanatory Notes, the distinction between the goods of Chapter 3 and those of Chapter 16 is explained as below.
This Chapter is limited to fish (including livers and roes thereof) and crustaceans, molluscs and other aquatic invertebrates in the states described in the headings. Subject to this proviso, they remain classified in the Chapter whether or not they have been cut, chopped, minced, ground, etc. In addition, mixture or combinations of products of different headings of the Chapter (e.g., fish of headings 03.02 to 03.04 combined with crustaceans of heading 03.06) remain classified in this Chapter.
On the other hand, fish and crustaceans, molluscs and other aquatic invertebrates are classified in Chapter 16 if they have been cooked or otherwise prepared or preserved by processes not provided for in this Chapter (e.g., fish fillets merely covered with batter or bread crumbs, cooked fish); it should, however, be noted that smoked fish, which may have undergone cooking during or before the smoking process, and crustaceans in their shells simply steamed or boiled in water, remain classified in headings 03.05 and 03.06 respectively and that flours, meals and pellets obtained from cooked fish, crustaceans, molluscs or other aquatic invertebrates remain classified in headings 03.05, 03.06 and 03.07 respectively.
It should also be noted that fish and crustaceans, molluscs and other aquatic invertebrates of this Chapter remain classified here even if put up in airtight containers (e.g., smoked salmon in cans). In most cases, however, products put up in these packings have been prepared or preserved otherwise than as provided for in the headings of this Chapter, and accordingly fall to be classified in Chapter 16.
The above explanation makes it clear that only when the crustaceans have been cooked or otherwise prepared or preserved by processes not provided in Chapter 3, they will come under Chapter 16.
6.5 The Commissioner in the impugned order states that blanching or cooking of deshelled and deveined prawns and shrimps is not a process provided for in Chapter 3 nor is the process of adding additives like Sodium Tri Poly Phosphate, Vitamin C or natural extract of paprika is provided for the products under Chapter 3. Quoting Chapter Note 2 under Chapter 3 of CETA 1985 he has observed that the note makes explicit reference to the fat that prawns (crustaceans) in their shell simply boiled in water could be classified under Chapter Heading 3. Hence the processed, prepared and preserved fish and prawns manufactured and cleared in unit containers and bearing a brand name viz., 'SUMERU' are to be rightly classified under Chapter 16 under CETA 1601.00. The Commissioner has not considered the opinions of the experts submitted by the appellants at all. His inference from Note 2 to Chapter 3 that only crustaceans in shell simply boiled in water is covered by that Chapter is not correct. When the note says that the Chapter covers products which are chilled, frozen and salted in brine, dried or smoked are covered and further indicates that crustaceans in shell simply boiled in water is also covered, it doesn't mean that it covers only crustaceans in shell simply boiled in water. The Note means that crustaceans in shell simply boiled in water are included in the Chapter. The first part of the Note covers all products of Chapter 3, which are chilled, frozen and salted in brine dried or smoked. It should not lead one to conclude that deshelled, deviened crustaceans would not be covered under the Chapter. It also cannot lead to us to infer that blanched prawns cannot be covered under this Chapter in the light of the experts' opinions. We want to emphasize that inasmuch as "blanching" is done before freezing, and since freezing is covered under Chapter 3, blanching is not excluded from the purview of Chapter 3. The Commissioner's inference is incorrect. The Commissioner has referred to the process of adding additives like STPP, Vitamin C and natural extract of parprika. These points have also been explained by the experts. The Note 2 of Chapter 3 clearly indicates that the process of chilling, freezing, salting in brine, drying or smoking are all covered under that Chapter. The Director, CIFT has stated that the treatment of fish, crustaceans, molluscs and other aquatic invertebrates with sodium chloride (salt) and STPP is one of the established processing methods used during salting, chilling and freezing of sea foods products in order to maintain freshness and avoid moisture loss. Therefore, the inference of the Commissioner adding STPP, salt etc., are not provided in Chapter 3 is not correct because both sodium chloride and STPP are used in the processes of chilling, freezing, salting, etc., which are definitely provided in Chapter 3. As regards, paprika, the Dean, College of Fisheries has stated usage of natural paprika has nothing to do with any kind of preparation of cooking or preparation of meat, since it is solely used commercially for colouring shrimps so as to obtain uniformity in their appearance. He has also stated that the usage of salt and STPP does not contribute to cooking the meat or preparation into ready to eat foodstuff. For proper appreciation of the entire issue, we are reproducing below the opinions given by Dean, College of Fisheries, Kerala Agricultural University and the Director, CIFT.
Date: 7.2.2005 NO. F8/3356/2004 TO WHOMSOEVER IT MAY CONCERN In the processing of fish, crustaceans, mollusks and other invertebrates, they are subjected to salting (also known as brining), chilling and freezing. Brining is done for firming, improving the texture, reducing moisture levels in the products and improving appearance. Usage of STTP is necessary in the process of salting, so as to reduce water loss from the product and to Improve appearance and It is one of the commercial methods of fish processing. The usage of salt and STTP does not contribute to cooking the meat or preparation Into ready to eat foodstuff.
In the processing of shellfish natural paprika is used. Usage of natural paprika has also nothing to do with any kind of preparation of cooking or preservation of meat since it is solely used commercially for colouring shrimps so as to obtain uniformity in their appearance.
Blanching is done before chilling being essential pre-requisite for chilling and freezing because the very purpose of achieving the bacterial and product standards cannot be achieved without blanching and this Is the sole purpose of chilling and freezing. Blanching neutralizes or reduces the bacterial load and inactivates the enzyme present in the product. Blanching enhances the foods natural flavour and colour and therefore is necessary. The blanched product is not a partially cooked product or a product that is ready to eat. It only gives a sterilizing' effect reducing the bacterial load at surface levels. The product has to be cooked before consumption. Total plate count at 37 c for shrimps on heat exposure like cooking or blanching is normally seen to be around 10000 and a similar raw product's TPC is around 100000 Dr. D.D. Nambudiri Dean.
No. F.I(7)/FP/04 Dated: 20-7-2004 TO WHOMSOEVER IT MAY CONCERN The treatment of fish, crustaceans, molluses and other aquatic invertebrates with sodium chloride and sodium tripolyphosphate is one of the established processing methods used during sailing, chilling and freezing of seafood products in order to maintain freshness and avoid moisture loss.
Blanching is a term that describes a method of processing used during salting, chilling and freezing of marine products. Blanching enhances the food's natural flavour and colour. Blanching also neutralizes or reduces the bacterial load and inactivates the enzymes present in food. In the case of molluses steaming is done to extract the meat by opening the shells. A blanched product cannot be termed as partially cooked, prepared and ready-to-eat.
6.6 After going through the tariff entries HSN Explanatory Notes, manufacturing process undertaken by the appellants and the experts' opinion, we are of the view that the impugned products have not undergone any processes, which are not mentioned in Chapter 3, so as to make them preparations of crustaceans. In other words, the impugned products do not merit to be classified under Chapter 16 and they would remain only under Chapter 3. In the light of the above observations, we set aside the Commissioner's order relating to classification. Consequently, the impugned product is not liable to Central Excise duty as the rate of duty under Chapter 3 is nil. Since the duty demand is set aside the demand of interest and imposition of penalties are also set aside.
6.7 Before concluding, we want to make certain observations. The learned advocate cited a large number of cases to hold that the affidavits and certificates from experts, professionals and persons in the trade presented could not have been ignored by the Adjudicating Authority. Expert opinion given by a competent person cannot be dismissed as erroneous in the absence of a contra expert opinion on record. The appellants have actually produced the certificate from three apex organizations. The MPEDA, CIFT are central government organizations, totally dedicated to the seafood industry. The Commissioner has not at all discussed the contents of certificates produced by the appellants. These certificates have also referred to a parameter known as total plate counts (at 37 C) it is seen that cooked prawns and shrimps, the total plate counts do not exceed 10000, whereas these are 1,00,000 for peeled, deveined and frozen or raw shrimps/prawns. He has also ignored the fact that the usage of sodium chloride and STPP is one of the methods used in salting, chilling and freezing, which processes are covered under Chapter 3 of CETA and such usage does not contribute to cooking. Further, he has not appreciated that blanching is an essential pre-requisite for chilling and freezing (which processes are covered under Chapter 3). From this also we can conclude that blanching is also covered under Chapter 3. The experts have stated that natural paprika has nothing to do with any kind of preparation cooking or preservations of shrimps. Food processing is a highly technical subject and while deciding issues, which have great bearing on leviability to Central Excise duty, the Adjudicating officer should respect the opinions of the experts submitted to him. They cannot be brushed aside. The Commissioner, with regard to the letters of the experts, has stated that the certificates opinion were not relied upon in the case and those opinions can't cloud the reality. There is a saying that mind is like a parachute and it can function only when it is open. If the Commissioner refuses to examine the opinion of the experts, such an attitude alone will cloud the reality.
6.8 We also agree with the appellant's contention that denial of retest by Commissioner is violation of Principles of Natural Justice. Denial of appellant's request for the cross-examination of the two chemical examiners of EIA, Chennai also violates the Principles of Natural Justice. There is also no justification for imposing penalties on the appellants in cases of classification disputes. The case laws cited by the appellant are very relevant.
6.9. Summing up, we do not find any merit in the impugned order of the Commissioner and the same is set aside. We allow the appeal with consequential relief for reasons stated above.
(Pronounced in open Court on 17 Oct 2006) ??