Customs, Excise and Gold Tribunal - Mumbai
Charak Pharmaceutical India Pvt. Ltd. vs Commissioner Of Central Excise on 17 March, 2006
ORDER Chittaranjan Satapathy, Member (T)
1. Heard both sides. First four appeals have been filed by the appellant M/s Charak Pharmaceuticals India Pvt. Ltd and the last appeal No. E-899/2005 has been filed by the applicant Commissioner. Both parties agree that the dispute in these appeals relates to classification of 'Honey'.
2. It is not disputed that Honey is procured from apiaries and then subjected to minimal processing such as heating, cooling, staining, filtration only and then packed in the containers for marketing as recorded by the lower appellate authority in the impugned order at page-7 thereof. Both sides have taken us through the entries under Central Excise heading 0400 and heading 3000 including the subheadings there under. We have also perused heading 0409 of the Customs tariff which provides a separate heading for natural honey. The Explanatory Note to the HSN states that heading 0409 covers honey produced by bees or by other insects provided that neither sugar or any other substance has been added. It further states that such honey may be designated by floral source, origin or colour and that heading 0409 excludes artificial honey and mixusers of natural and artificial honey falling under heading 17.02. Thus, the HSN Explanatory Notes make it very clear that for the purpose of Customs tariff, natural honey has to be classified under chapter 4 and heading 0409. We have compared the tariff entries under the Central Excise tariff which is based on the HSN. We find deliberate omission of natural honey in chapter 4 of the Central Excise tariff. Natural honey neither figures under a separate tariff heading nor as a part of any tariff heading. It goes to show a deliberate decision on the part of the legislature to leave out natural honey from the Central Excise tariff as it is not a manufactured product, on which excise duty can be charged. We find that the lower appellate authority has held honey packed by the appellants, M/s Charak Pharmaceutical India Pvt. Ltd to be edible products of animal origin for part of the period. Considering the Explanatory Notes to the HSN, we find no support for such a conclusion. Natural Honey is merely designated by floral source, origin or colour. We also find that the chapter heading of chapter 4 in Customs tariff lists natural honey and edible products of animal origin whereas the chapter heading of chapter 4 in Central Excise Tariff omits natural honey and only lists edible products of animal origin. The Explanatory Note to the HSN indicates products such as Turtles' eggs and Salanganes' nests ("birds' nests") to be covered under the category edible products of animal origin. In any case, in our view natural honey in the state it is obtained and after it is subjected to minimal process of heating, cooling, staining and filtration cannot be considered to be a manufactured product and excisable.
3. In view of our finding as above holding natural honey, as non-excisable, the demands raised against the appellants M/s Charak Pharmaceutical India Pvt. Ltd. do not stand. Their appeals are allowed and the Department's appeal is dismissed.
(Dictated and Pronounced in Court)