2004 (6) TMI 430 - AT - Central Excise

Exemption - Claim of - Cenvat/Modvat - Claim of - Valuation - Deductions - Demand - Provisional assessment - Penalty - Imposition of

Summary

Issues Involved:
1. Correct classification of the disputed goods.
2. Admissibility of exemption in terms of Notification 103/90, 2/94, and 16/96 to fruit pulp-based products.
3. Availability of Modvat credit.
4. Correct assessable value.
5. Justification of penalty.

Issue-wise Detailed Analysis:

1. Correct Classification of the Disputed Goods:
The Tribunal upheld the classification of Godrej Jumpin drinks under CETA sub-heading 2202.90 as "ready to serve non-alcoholic beverages." This decision was based on a previous Tribunal order in the appellant's own case involving a similar product, Lipton Tree Top, which was also classified under the same sub-heading. The Tribunal referred to the HSN Explanatory Notes, which state that the addition of water to fruit juice resulting in diluted products characterizes them as beverages of Heading 22.02. The composition of the products in dispute was found to be similar to Lipton Tree Top, thus affirming their classification under CETA sub-heading 2202.90.

2. Admissibility of Exemption in Terms of Notification 103/90, 2/94, and 16/96:
The Tribunal found that the Commissioner's decision to deny the exemption on the ground that no exemption was claimed in the form of a classification list was incorrect. The products, Jumpin Mango and Jumpin Guava, are fruit pulp-based drinks, and the benefit of the cited notifications is applicable to such products. Therefore, the Tribunal extended the benefit of these notifications to the disputed products.

3. Availability of Modvat Credit:
Given the classification of the products under Heading 2202.90, which attracts duty, the Tribunal held that Modvat credit of duty paid on inputs used in the manufacture of these products is admissible. This is subject to verification of duty-paying documents, except for the credit of Rs. 10,300/- which had been disallowed by the Commissioner and was not appealed against.

4. Correct Assessable Value:
The Tribunal directed that the assessable value of the goods be recomputed in light of the appellant's claim that the price charged was the cum-duty price, following the larger bench decision in the case of Srichakra Tyres Limited. The Tribunal also instructed that the claims for deductions such as freight and sales tax, which were previously disallowed due to lack of necessary details, be reconsidered. The appellants stated they could now provide the necessary details and a Chartered Accountant's certificate for verification.

5. Justification of Penalty:
The Tribunal set aside the penalty imposed by the Commissioner, referencing the decision in the case of Mangalore Refinery & Petrochemicals Ltd., which held that penalty cannot be imposed in cases of finalization of provisional assessments. Since the assessments in the present case were provisional and finalized only by the impugned order, the penalty was deemed unsustainable.

Summary:
1. Classification of Godrej Jumpin drinks under CETA sub-heading 2202.90 is upheld.
2. Benefit of exemptions under Notifications 103/90, 2/94, and 16/96 is extended to Jumpin Mango and Jumpin Guava.
3. Modvat credit is admissible subject to verification of duty-paying documents.
4. Assessable value to be recomputed, considering cum-duty price and allowable deductions.
5. Penalty is set aside.

The appeals are partly allowed, and the case is remanded to the jurisdictional Commissioner for further action as directed.