2014 (9) TMI 769 - AT - Central Excise

Classification of goods - classification of Calcutta Meetha Pan - Classification under CETH 2108 or under CETH 2106.099 - Held that - product consists of dry dates shredded, cardamom, dry pan powder, spices, sauf, perfume, etc., and the dry dates account for 70% of the weight of the product. The other ingredients like cardamom, spices, sauf and menthol account for about 20% and the green powder consisting of dry pan leaf about 2% of the weight. Thus, the product is a mixture. As per the General Interpretative Rules, Rule 2(b) provides that any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. As per Rule 3(b), Mixtures, composite goods consisting of different materials or made up of different components, and goods put up for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character. If this rule is applied, then the material which gives the essential character is the Pan Leaf Powder. Pan Leaf is part of a plant and preparation of pan leaves with other ingredients would merit classification under Heading 20.01 as preparation of fruits, nuts and vegetables and other parts of a plant prior to March, 2005 and under CETH 2008.9200 on or after March, 2005. Following decision of Maharshi Ayurveda Corpn. 2005 (12) TMI 93 - SUPREME COURT OF INDIA - Accordingly, it is held that the classification of the impugned product under CETH 20.01 prior to March, 2005 and under CETH 20.08 on or after March, 2005. - Decided in favour of assessee.

Summary

Issues: Classification of product Calcutta Meetha Pan under Central Excise Tariff Heading (CETH) 2108 prior to March 2005 and under CETH 2106.099 after March 2005.

Detailed Analysis:

1. Classification of the Product:
The appellant contested the classification of the product Calcutta Meetha Pan under CETH 2108 prior to March 2005 and under CETH 2106.099 after March 2005. The appellant argued that the product should be classified under Tariff Entry under Chapter 20 as a 'Preparation of vegetables, fruits and nuts and other parts of plants.' The composition of the product includes dry dates shredded, cardamom, dry pan powder, spices, sauf, perfumes, menthol, and added flavor and sweeteners, with dry dates being the main ingredient. The appellant relied on various legal precedents to support their classification argument.

2. Legal Precedents and Tribunal Decisions:
The appellant cited the decision of the Tribunal in the case of Commissioner of Central Excise, Noida v. D.S. Foods Ltd., where a similar product was classified under Heading 20.01 as 'preparation of vegetables, fruit, nuts and other edible parts of plants.' The Tribunal in another case involving 'Chaman Bahar powder' and 'pono cream' also classified the products under CETH 20.01. Furthermore, the appellant referred to a decision of the Hon'ble Apex Court in the case of Maharshi Ayurveda Corpn. Ltd., where a product called Herbonic tonic was classified under Heading 2001 as a more specific description compared to Heading 2108.

3. Revenue's Argument and Test Report:
The Revenue, represented by the Addl. Commissioner, relied on a test report from the Central Revenue Control Laboratory. The report highlighted the presence of betel leaves in the product, suggesting similarities to Pan Masala. Based on this report, the Revenue argued that the product should be classified under CETH 2106. The lower authorities upheld this classification and confirmed the duty demands based on the test report's findings.

4. Tribunal's Decision:
After considering the submissions from both sides, the Tribunal analyzed the product's composition and classification rules. The Tribunal noted that the product is a mixture with Pan Leaf Powder providing its essential character. Applying the General Interpretative Rules, the Tribunal concluded that the product falls under Heading 20.01 as a preparation of fruits, nuts, and vegetables prior to March 2005 and under CETH 2008.9200 after March 2005. The Tribunal referenced previous decisions and legal precedents to support its classification decision.

5. Conclusion:
The Tribunal allowed the appeal, setting aside the lower authorities' classification under CETH 2106, and classified the product Calcutta Meetha Pan under CETH 20.01 prior to March 2005 and under CETH 20.08 after March 2005. The appellant was granted consequential relief in accordance with the law.

This detailed analysis of the legal judgment highlights the arguments presented by both parties, the legal precedents cited, the test report's impact on the classification, and the Tribunal's final decision regarding the classification of the product Calcutta Meetha Pan under the Central Excise Tariff Headings.