2006 (10) TMI 291 - AT - Central Excise

Summary

Issues:
Classification of products 'Tomato Rasam Paste' and 'Pepper Rasam Paste' under Central Excise Tariff Act, 1985.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal classifying the products under Sub Heading 2104.10 as soups and broths and preparations thereof. The Commissioner (Appeals) set aside the Order-in-Original, classifying the products under residuary heading No. 2104.10 with nil rate of duty, contrary to the Department's classification under heading 2103.10 attracting 16% duty. The dispute arose as the Revenue argued that the products in question were in paste form, unlike the powder form in a cited case. Another contention was the difference in ingredients, with the present case containing spices and flavoring. The Tribunal considered the submissions and opined that the form of the product, whether powder or paste, did not alter its essential character as a preparation for Rasam.

The Commissioner (Appeals) examined the issue of classification based on the descriptions of 'Mixed condiments and mixed seasonings' and 'Soups and Broths and Preparations therefore' under the Central Excise Tariff. The products, 'Tomato Rasam Paste' and 'Pepper Rasam Paste,' were analyzed for their ingredients, manufacturing process, and end use. The decision in a cited case was deemed applicable as the products were considered preparations for soups or broths requiring only the addition of water and heating, falling under heading 21.04. The Tribunal noted that the products were common in South Indian cuisine and did not require specialized knowledge for understanding. The Commissioner emphasized interpreting fiscal statutes based on common understanding in trade and commerce.

The Commissioner held that the impugned products were classifiable under Sub Heading 2104.10 of the Central Excise Tariff Act, 1985, rejecting the original adjudicating authority's classification. As it was a classification dispute involving statutory interpretation, no penalty was imposed on the appellants. Citing precedent, it was established that penalties are not applicable in genuine classification disputes. The Tribunal upheld the Commissioner's order, finding it legal and proper, with no merit in the appeal. The original classification under the more specific heading 2104.10 was deemed appropriate, and the appeal was rejected accordingly.