2012 (12) TMI 342 - AT - Central Excise

Waiver of pre-deposit classification - Jaljeera and Hazmi Held that - Any mixture of grinded spices packed in a packet can be termed as packed masala - Jaljeera and Hazmi are packed masala classifiable under Chapter 9 of Central Excise Tariff Act, 1985 particularly Entry No. 0903.10 - waiver of the condition of pre-deposit allowed

Summary

Issues:
Classification of "Jaljeera" and "Hazmi" under Central Excise Tariff Act, 1985 - Whether classifiable as "packed masala" under Chapter 9 or under Chapter 21.

Analysis:
The appellant, a manufacturer of spices and masalas, sought waiver of pre-deposit of excise duty demand of Rs. 1,19,63,817/- with penalty and interest. The dispute revolved around the classification of "Jaljeera" and "Hazmi." The appellant contended that these items should be classified as "packed masala" under Chapter 9 of the Central Excise Tariff Act, 1985, exempt from excise duty. The appellant relied on a Supreme Court judgment stating that any mixture of grinded spices in a packet can be considered "packed masala." The appellant argued that based on this precedent, "Jaljeera" and "Hazmi" should be classified as such under Entry No. 0903.10. The appellant claimed a strong prima facie case justifying the waiver of pre-deposit due to potential undue hardship.

On the other hand, the department argued that "Jaljeera" and "Hazmi" should be classified under Chapter 21 of the Central Excise Tariff Act, 1985. The department attempted to differentiate the appellant's reliance on the Supreme Court judgment, stating it pertained to a Sales Tax Act issue, not Central Excise Act. The department also referenced a prior Tribunal decision classifying "Jaljeera" under Chapter 21, with an appeal pending.

After considering the submissions, the Tribunal found that based on the Supreme Court judgment, "Jaljeera" and "Hazmi" could be classified as "packed masala" under Chapter 9 of the Central Excise Tariff Act, 1985, specifically under Entry No. 0903.10. The Tribunal concluded that the appellant had established a prima facie case for waiver of pre-deposit. Consequently, the stay application was granted, and the deposit of demand, interest, and penalty was waived until the appeal's disposal.