Customs, Excise and Gold Tribunal - Mumbai
Hindustan Lever Ltd. vs Commissioner Of Cen. Excise on 13 November, 2006
Equivalent citations: 2007(115)ECC355, 2007ECR355(TRI.-MUMBAI), 2007(209)ELT119(TRI-MUMBAI)
ORDER
Jyoti Balasundaram, Vice President
1. The issue in dispute in this appeal relates to eligibility of the product " Kissan Sauce Tom Tom Tomato Ketchup " falling for classification under CET sub-heading 2103.10 to the benefit of exemption in terms of Sr. No. 10 of Notification 6/2002-CE dated 1.3.2002. Under this Notification, the benefit of exemption is available to " Sauces, Ketchup and the like, and preparations thereof falling under CET sub-heading 2103.10. The benefit has been denied on the ground that although the product in dispute falls for classification under CET sub-heading 2103.10, it is a "Mixed Condiment and Mixed Seasoning" which description is not covered by Sr. No. 10 of the Table to the Notification.
2. We have heard both sides. We find that the product is manufactured from tomato paste, sugar, salt, acetic acid, emulsifying and stabilizing agents, preservatives, onion, spices extract and garlic etc. The reasoning of the Commissioner in holding that it is a Mixed condiment is his reliance upon para 4 of the Note (A) to the Chapter 21.03 in HSN which gives examples of "sauces and preparations thereof; mixed condiments and mixed seasonings". One of the examples is tomato ketchup. The Commissioner has clearly mis -read the HSN explanatory note without nothing the fact that Note 4(A) to Chapter 21.03 is not only illustrative of mixed condiments and mixed seasoning but also sauces and preparations thereof. Note (A) is reproduced below:
(A) SAUCES AND PREPARATIONS THEREFOR; MIXED CONDIMENTS AND MIXED SEASONGS.
This heading covers preparations, generally of a highly spiced characterised to flavour certain dishes (meat, fish, salads, etc.) and made from various ingredients (eggs, vegetables, meat, fruit, flours, starches, oil, vinegar, sugar, spices, mustard, flavourings etc.) Sauces are generally in liquid form and preprations for sauces are usually in the form of powders to which only milk, water, etc. need to be added to obtain a sauce.
The heading includes certain products based on vegetables or fruit, but these differ from the preserved products in Chapter 20 (and more especially those under heading 20.01) in that they are mainly liquids, emulsions or suspensions containing very little solid matter, - see the Explanatory Note to heading 20.01 regarding these preparations.
Mixed condiments and mixed seasonings containing spices differ from the 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 (see the General Explanatory Note to that Chapter).
Examples of products covered by the heading are: mayonnaise, salad dressings, Bearnaise, bolognaise (consisting of chopped meat, tomato puree, spices etc.) soya sauces, mushroom sauce. Worcester sauce (generally made with a base of thick soya sauce, an infusion of spices in vinegar, with added salt, sugar, caramel and mustard), tomato ketchup (a preparation made from tomato puree, sugar, vinegar, salt and spices) and other tomato sauces, celery salt (a mixture of cooking salt and finely ground celery seeds), certain mixed seasonings for sausage making, and products of Chapter 22) other than those of heading 22.09) prepared for culinary purposes and thereby rendered unsuitable for consumption as beverages (e.g. cooking wines and cooking Cognac).
3. The discussion in the Commissioner's order of Chapter 9 is not relevant for the purpose of this case because it is not the contention of the appellants that the product in dispute falls for classification under Chapter 9. The fact that Note 1(b) to Chapter 9 of HSN states that mixtures those constitute mixed condiments or mixed seasonings are classified in heading 21.03, is not sufficient to hold that the product in dispute is only a mixed condiment and mixed seasoning for the reason that the HSN explanatory Note (A) to Chapter 21.03 covers two categories of products viz. sauces and preparations therefor as wells as mixed condiments and mixed seasonings. There is no other dispute on this aspect. We, therefore, have no hesitation in holding that the product is sauce covered by Sr.No.10 of Notification No. 6/02. We, therefore, set aside the impugned order by which duty demand of Rs. 7,16,70,962/- and Educational Cess of Rs. 7,32,690/- has been confirmed and penalty of Rs. 7,24,03,652/- has been imposed and allow the appeal.