2007 (4) TMI 7 - SC - Central Excise

Classification Alleged that the assessee used to mis-declaration of products(puff) as Chabena / Prasad and other other allegation imposed on him and accordingly demand for Rs 2.31crore as duty After not finding any proof in support of it authority reject the allegation and allow the appeal

Summary

Issues:
1. Classification of 'puffs' obtained from cereals under Chapter Heading 19.04 or 21.07.
2. Mis-declaration of products as 'chabena/prasad' and duty demand.
3. Application of General Exemption No. 83 for certain specified goods.

Analysis:
1. The primary issue in this case was the classification of 'puffs' made from cereals under Chapter Heading 19.04 or 21.07. The appellant argued that 'puffs' should be classified under Chapter Heading 21.07 as edible preparations, while the Department contended they fell under Chapter Heading 19.04 as preparations of cereals. The Tribunal's judgment lacked a clear finding on this classification, leading to the Supreme Court remanding the matter for fresh determination.
2. The mis-declaration of products as 'chabena/prasad' led to a show cause notice and a demand for duty payment amounting to Rs. 2.31 crores. The products were alleged to be sold under the brand name 'bonton' and marketed as breakfast cereals high in protein. The Tribunal confirmed the duty demand, emphasizing the denial of exemption claimed by the assessee rather than the classification issue.
3. The application of General Exemption No. 83 for specified goods, including soya-based food preparations, was crucial in determining the duty rate. The exemption provided nil duty for certain products like soya textured protein, but the Tribunal's judgment did not address key questions regarding the quantity and branding of the products sold during the relevant period. The Supreme Court highlighted the importance of these factors for determining the applicability of the exemption.

In conclusion, the Supreme Court set aside the Tribunal's judgment and remanded the case to the adjudicating authority for a fresh determination in accordance with the law. The appeal was allowed with no order as to costs, emphasizing the need for a comprehensive assessment of the classification and exemption issues raised in the case.