2006 (3) TMI 626 - AT - Central Excise

Summary

Issues: Classification of food products under specific sub-headings for duty assessment and exemption under Notification No. 6/2002-C.E.

Analysis:
1. The appellants declared food items under brand names 'Ashirvad' and 'Kitchens of India' as 'Ready to Eat Food Products' under Chapter sub-heading 2108.99, claiming exemption from duty under Notification No. 6/2002-C.E. However, the department found the items did not qualify for the exemption as per the notification, which applied to different products. The Commissioner rejected the classification under the said notification, stating the items could not be considered alongside those listed in the notification. The appellants argued for classification under Chapter sub-heading 2001.10, asserting a lower duty liability not exceeding Rs. 7,84,684. They cited precedents and expert evidence to support their claim, including a Tribunal decision related to similar food preparations.

2. The learned SDR contested the classification proposed by the appellants, arguing that the items did not qualify as vegetable preparations under the notification. He maintained that the classification could be under Chapter sub-heading 2108.99, highlighting that the appellants did not challenge the classification during the initial filing. He emphasized that reopening the classification issue at this stage was not permissible.

3. The appellants contended that the classification issue could be raised in fresh proceedings as per legal provisions, indicating their intent to challenge the classification further.

4. After considering the arguments and the applicability of the notification, the Tribunal found that the notification did not apply to the appellants' case. Acknowledging the appellants' plea for cum-duty price and citing a Supreme Court judgment, the Tribunal directed the appellants to deposit Rs. 10,00,000 within three months. Upon this deposit, the pre-deposit of the remaining duty and penalty would be waived, and recovery stayed pending appeal disposal. Non-compliance would lead to dismissal of the appeal, with a compliance report due on a specified date.

This detailed analysis outlines the classification dispute, the arguments presented by both sides, the Tribunal's assessment of the notification's applicability, and the directive issued regarding the pre-deposit and compliance requirements for the appeal process.