Custom, Excise & Service Tax Tribunal
T.S.R. & Co. Home Needs (P) Ltd vs Commissioner Of Central Excise, Trichy on 27 November, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI Appeal No.E/610-611/2010 & E/403/2011 [Arising out of Order-in-Appeal No.128/2010 dt. 21.07.2010 passed by the Commissioner of Customs & Central Excise (Appeals), Trichy] T.S.R. & Co. Home Needs (P) Ltd. Appellant Versus Commissioner of Central Excise, Trichy Respondent
Appearance:
Shri R. Janardhanan Pillai, Consultant For the Appellant Shri S. Govindarajan, AC (AR) For the Respondent CORAM :
Honble Ms. Sulekha Beevi C.S. Member (Judicial) Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of hearing / decision : 27.11.2017 FINAL ORDER No. 43045-43047 / 2017 Per Bench The issue that arises for consideration in the above appeals being same they were heard together and are disposed by this common order.
2. The appellants are engaged in manufacture of various products such as orange syrup, kasthuri pan pills etc. The dispute in these appeals relate to two items namely Rose Syrup and 'Sarasaparilla Syrup (Nannari syrup). The appellants were clearing the products under chapter sub heading 2001.00 claiming Nil rate of duty as both the products are prepared from parts of plant i.e. essence is extracted from rose flower for manufacture of Rose Syrup and essence taken from root of Nannari plant for manufacture of Sarasaparilla syrup. The show cause notice dt. 13.5.1997 was issued for different periods alleging that the products are rightly to be classified under 2108 and demanding duty accordingly. SCN was adjudicated and the original authority confirmed the demand. The said order was challenged before Commissioner (Appeals) and thereafter by appeal filed before Tribunal vide final order dt. 6.1.2013 the Tribunal remanded the matter for deciding the classification on the basis of Chemical Examination report of Chief Chemist, Delhi. The Commissioner (Appeals) vide impugned OIA dt. 21.7.2010 upheld the classification under 2108.20, but restricted the demand to the normal period and set aside the penalty imposed under Section 11AC directing to reclassify the demand by giving the benefit cum duty price. Aggrieved, the appellants are now before the Tribunal.
3. On behalf of appellant, ld. Consultant Shri R. Janardhanan Pillai reiterated the grounds of appeal. He submitted that the Commissioner (Appeals) has passed a common order dt. 24.9.2003 dealing with seven appeals. The allegation raised is that the products have been classified by the appellant under TSH 2001.00 instead of 21.08 as Sharbat. He submitted that the period involved is from 4/92 to 2/97. The new tariff entry with regard to 21.08 was introduced only on 16.3.95; that therefore the allegation that the products have to be classified under 21.08 prior to this date and the demand of duty for such period is unsustainable. He also argued that being an issue of classification, the same was interpretational one and therefore there was no intention on the part of the appellant to evade payment of duty; that earlier the department had issued clarification stating that the goods are to be classified under 2001.00 ; that as early as in the year 1975, the disputing classification of these two products existed and was decided by the then Asst. Collector and the products were classified under CSH 2001.00 based on the chemical examination report received from the Chemical Examiner, Madras; that report was that the said items are only natural products and cannot be treated as sharbat; that syrups are not flavoured with any synthetic flavouring agent and the rose petals and nannari roots are used for medicinal value only and not as a flavouring agent.
4. Ld.A.R reiterated the findings in the impugned order. He submitted that w.e.f. 16.3.95, the CETA introduced the tariff entry 2108.20 for items Sharbat; that Chapter Note 6 to Chapter 20 of the CETA which is operational from 16.3.1995 reads thus :
For the purpose of sub-heading 2108.20 the expression Sharbat means any non-alcoholic sweetening beverage or syrup containing not less than 10% fruit juice or flavoured with non-fruit flavours such as rose, khus, kewara but not including aerated preparations". He therefore submitted that products rightly fall under 2108.20; that the issue is settled by the decision in the case of Bectors Foods Specialities Pvt. Ltd. Vs CCE Jalandhar - 2009 (233) ELT 374 (Tri.-Del.).
5. Heard both sides. It is not disputed that the products are made out of rose petals and nannari (roots). They are known as 'Rose Syrup' and 'Sarasaparilla Syrup'. Chapter Note 6 to Chapter 21 of the tariff clearly states that syrup containing not less than 10% fruit juice or flavoured with non-fruit flavours such as rose, khus, kewara fall under 2108.00. Thus following the decision laid down in Bectors Foods Specialities Pvt. Ltd. (supra), we are of the view that the subject goods merit classification under 2108.20 as 'Sharbat' from 16.3.1995 onwards. Therefore, the demand prior to 16.3.1995 is unsustainable and requires to be set aside which we hereby do. Consequently, the demand as well as interest raised after 16.3.95 is upheld. However, taking into consideration the issue being classification and interpretational one, we are of the considered opinion that the penalties imposed are unwarranted and thereby we set aside the same. Ld. Consultant has also requested for benefit of cum duty price. In OIA dt. 21.7.2010, the Commissioner (Appeals) has in fact remanded the matter for re-quantification on the basis of cum duty price. We find that the appellant has to be given benefit of re-quantification on the basis of cum duty price from 16.3.95 onwards classifying the goods as under 2108.00. Impugned orders in the above appeals are modified to the extent of classifying the goods under Heading 2108.00 w.e.f. 16.3.95 and upholding the demand and interest thereon. Penalties are set aside and the matter is remanded to the adjudicating authority for the limited purpose of re-quantification of duty giving the benefit of cum duty price to the appellant.
Appeals are disposed in the above terms.
(operative part of the order pronounced in court)
(Madhu Mohan Damodhar) (Sulekha Beevi C.S)
Member (Technical) Member (Judicial)
gs
8
Appeal No.E/610, 611/2010
E/403/2011