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2011 (1) TMI 415 - AT - Central ExciseClassification - Notification No. 13/98-C.E. dated 2-6-1998 - Demand - Rule 25(1) of the Central Excise Rules, 2002 - whether Sesame Seeds are covered by Heading 14.01 of Central Excise Tariff which covers vegetable plating materials; vegetable products, not elsewhere specified or included - while adopting the HSN based product nomenclature system for Central Excise Tariff, a number of chapters including Chapter 12 of HSN have been left blank - When the scheme of classification in Central Excise tariff is based on the HSN and in HSN the product, in question, is classifiable under Heading 12.07 but in the Central Excise Tariff though there is a Chapter 12, but the same is left blank, in our view, the intention of the legislature is not to subject goods mentioned in Chapter 12 of HSN to Central Excise duty, and the goods covered by Chapter 12 of HSN cannot be classified under some other headings - Appeal is dismissed
Issues:
Classification of goods under Central Excise Tariff based on Harmonised System of Nomenclature (HSN) - Applicability of duty on Hulled Sesame Seeds cleared into DTA by a 100% EOU - Interpretation of Chapter Heading 12.07 of HSN and Chapter 14.01 of Central Excise Tariff - Discrepancy in classification between HSN and Central Excise Tariff. Analysis: The case involved a dispute regarding the classification of Hulled Sesame Seeds under the Central Excise Tariff based on the Harmonised System of Nomenclature (HSN). The respondent, a 100% Export Oriented Unit (EOU), had cleared the seeds into the Domestic Tariff Area (DTA) without payment of duty, claiming they were not excisable goods under Chapter sub-heading 12.07 of the Customs Tariff Act, 1975. The Revenue contended that the seeds should be classified under Heading 14.01 of the Central Excise Tariff and were liable to duty under the Central Excise Act, 1944. Three show cause notices were issued, demanding duty and imposing penalties. The Deputy Commissioner upheld the demands, but the Commissioner (Appeals) set aside the order, stating that the seeds were not classifiable under Heading 14.01. The Revenue appealed this decision. During the hearing, the Revenue argued that the seeds should be classified under Heading 14.01 of the Central Excise Tariff as vegetable products, subject to duty under the Central Excise Act. The respondent's counsel countered, citing the blank Chapter 12 in the Central Excise Tariff, which aligned with Chapter 12.07 of the HSN covering Sesame Seeds. The counsel highlighted a previous Tribunal decision and a Supreme Court ruling supporting the non-excisability of Sesame Seeds. The Tribunal analyzed the dispute, focusing on whether Sesame Seeds fell under Heading 14.01 of the Central Excise Tariff or were non-excisable due to the blank Chapter 12 in the Tariff corresponding to Chapter 12.07 of the HSN. It noted that the Central Excise Tariff was based on the HSN, with several blank chapters, including Chapter 12. Comparing the two systems, the Tribunal inferred that goods covered by Chapter 12 of the HSN were not intended to attract Central Excise duty. It referenced a previous Tribunal decision supporting this interpretation. Consequently, the Tribunal dismissed the Revenue's appeal, affirming that the seeds were non-excisable and could not be classified under other headings. In conclusion, the Tribunal upheld the Commissioner (Appeals) decision, emphasizing the alignment between the HSN and the Central Excise Tariff, which indicated the non-excisability of goods under Chapter 12 of the HSN. The judgment clarified the classification issue, providing a comprehensive analysis based on the legislative intent and previous legal interpretations. (Judges: R.M.S. Khandeparkar, Shri Rakesh Kumar, JJ.)
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