Custom, Excise & Service Tax Tribunal
M/S Dhariwal Industries Ltd vs Commissioner Of Central Excise, ... on 27 February, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. E/48/10 (Arising out of Order-in-Appeal No. P-III/VM/250/2009 dated 25.11.2009 passed by the Commissioner of Central Excise (Appeals), Pune-III). For approval and signature: Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Anil Choudhary, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No
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 : Yes CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy : Seen
of the order?
4. Whether order is to be circulated to the Departmental : Yes
authorities?
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M/s Dhariwal Industries ltd.
Appellant
Vs.
Commissioner of Central Excise, Pune-III
Respondent
Appearance:
Shri Mayur Shroff, Advocate with
Shri S.N. Kantawala, Advocate
for Appellant
Shri Ahibaran, Addl. Commissioner (AR)
for Respondent
CORAM:
SHRI P.R. CHANDRASEKHARAN, MEMBER (TECHNICAL)
SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL)
Date of Hearing: 27.02.2014
Date of Decision: 27.02.2014
ORDER NO.
Per: P.R. Chandrasekharan
The appellant is directed against Order-in-Appeal No. P-III/VM/250/2009 dated 25.11.2009 passed by the Commissioner of Central Excise (Appeals), Pune-III. Vide the impugned order, the lower appellate authority has upheld the classification of a product called Calcutta Meetha Pan under CETH 2108 prior to March, 2005 and under CETH 2106.099 after March, 2005 by holding that the product is a mixture of edible preparation and consequently he confirmed duty demands of Rs.4,57,238/- for the period March, 04 to February, 05 and Rs.3,69,438/- for the March, 05 to Sept., 07. Aggrieved of the same, the appellant is before us.
2. The learned Counsel for the appellant submits that the product Calcutta Meetha Pan manufactured and marketed in boxex/pouches consist of dry dates shredded, cardamom, dry pan powder, spices, sauf, perfumes, menthol and contains added flavour and sweetners. The main ingredient is dry dates which accounts for 70% of the weight of the product. The balance ingredients like cardamom, spices, sauf and menthol accounts for about 20% and the green powder consisting of dry pan leaf about 2% of the weight. Therefore, it is covered by Tariff Entry under Chapter 20 as preparation of vegetables, fruits and nuts and other parts of plants. Prior to March, 2005, there was only one heading under the said Chapter which read as Preparations 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. Since the product is essentially preparation of fruits, spices, vegetables and pan leaves, which are parts of plants, the product falls squarely under heading 20.01 prior to March, 2005. On or after March, 2005, the product merits classification in terms of the amended provisions of the Tariff under CETH 20.08 as Fruits, Nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included and in particular under CETH 2008.92 as Mixtures of the above materials.
2.1 The learned Counsel also relies on the decision of this Tribunal in the case of Commissioner of Central Excise, Noida Vs. D.S. Foods Ltd. 2009 (239) ELT 54 (Tri-Del) wherein classification of a product which was a mixture of dry dates, fennel, natural herbs, seeds of melon, cardamom, coriander, coconut, catechu, lime, saffron, sweetener, mishri, perfumes, essential oils and allied products and flavours and essence was considered. The Tribunal classified the product under Heading 20.01 as preparation of vegetables, fruit, nuts and other edible parts of plants and not under Chapter 21 which covered miscellaneous edible preparations on the ground that Heading 20.01 was more specific to the product concerned. The same decision was followed in the case of Shivraj Tobacco Co. Pvt. Ltd. 2009 (241) ELT 574 (Tri-Del), wherein the classification of a product Chaman Bahar powder and pono cream was considered which consisted of vegetables, fruits and other parts of plants. The Tribunal once again concluded that the product would merit classification under CETH 20.01.
2.2 The learned Counsel also relies on the decision of the Hon'ble Apex Court in the case of Maharshi Ayurveda Corpn. Ltd. 2006 (193) ELT 10 (SC), wherein a classification dispute arose regarding a product called Herbonic tonic, which was a mixture of assorted vegetation and dry fruits and seeds which could be consumed as such. The competing entries were Heading 2001 covering preparation of vegetables, nuts and fruits and Heading 2108 which dealt with the miscellaneous edible preparations, not elsewhere specified or included. The Hon'ble Apex Court after considering the composition of the product and its edible nature concluded that since the product is a mixture, it is more appropriately classifiable under CETH 2001 as the description is more specific than Heading 2108, which dealt with the residuary items. The learned Counsel submits that the ratio of this decision would apply to the facts of the present case also. Therefore, Calcutta Meetha Pan merits classification under CETH 2001 prior to March, 2005 and under CETH 2008 with effect from March, 2005. Accordingly, he pleads for setting aside the impugned order and allowing the appeal.
3. The ld. Addl. Commissioner (AR) appearing for the Revenue, on the other hand, relies on the test report of the product dated 24.10.2007 given by the Central Revenue Control Laboratory. In the said test report, the ingredients of the product are reported to be the same as discussed above, i.e., dry dates shredded, cardamom, dry pan powder, spices, sauf etc. However, the Joint Director made the observation that the Important physiologically active ingredient of preparation is betel leaves, botanically known as Piper Betel Linn, whereas important physiologically active ingredient of Pan Masala is Betel Nut, botanically known as Areca Catechu Linn and as per Literature, the betel leaves and betel nuts have some common use (as masticatory) and physiological actions (stimulant and astringent), therefore, preparation under reference is similar to that of Pan Masala. Accordingly, he opined that the product Calcutta Meetha Pan would merit classification under CETH 2106. It is on the basis of this report, the lower authorities have held the classification under CETH 2106 and confirmed the duty demands. Therefore, the impugned demands are sustainable in law.
4. We have carefully considered the submissions made by both sides.
4.1 As regards the ingredients of the product, there is no dispute that the product consists of dry dates shredded, cardamom, dry pan powder, spices, sauf, perfume etc. and the dry dates account for 70% of the weight of the product. The other ingredients like cardamom, spices, sauf and menthol account for about 20% and the green powder consisting of dry pan leaf about 2% of the weight. Thus, the product is a mixture. As per the General Interpretative Rules, Rule 2(b) provides that any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. As per Rule 3(b), Mixtures, composite goods consisting of different materials or made up of different components, and goods put up for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character. If this rule is applied, then the material which gives the essential character is the Pan Leaf Powder. Pan Leaf is part of a plant and preparation of pan leaves with other ingredients would merit classification under Heading 20.01 as preparation of fruits, nuts and vegetables and other parts of a plant prior to March, 2005 and under CETH 2008.9200 on or after March, 2005.
4.2 Further, in respect of similar products, this Tribunal has examined the question of classification in the D.S. Foods case, where the composition was similar except that product did not contain Pan Leaves and the Tribunal held that the mixture of dry dates, fennel, natural herbs, seeds of melon, cardamom, coriander, coconut, catechu, lime, saffron, sweetener, mishri, perfumes, essential oils and allied products and flavours and essence would merit classification under CETH 2001 and not under Chapter 2108. In the case of Shivraj Tobacco Co., a product consisting of fruits, vegetables and parts of plants was held to be classifiable under CETH 20.01. The Hon'ble Apex Court in the case of Maharshi Ayurveda Corpn. considered the classification of a product which was a mixture of assorted vegetation and dry fruits and seeds and held that Chapter 20 was more specific and the product merited classification under the said entry, particularly under entry 2008 and not under 2108. The ratio of these decisions, in our view applies squarely to the facts of the present case also. Accordingly, we hold the classification of the impugned product under CETH 20.01 and prior to March, 2005 and under CETH 20.08 on or after March, 2005.
5. Accordingly, we allow the appeal with consequential relief, if any, in accordance with law.
(Dictated and pronounced in Court)
(Anil Choudhary) (P.R. Chandrasekharan)
Member (Judicial) Member (Technical)
Sinha
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