2015 (9) TMI 1207 - AT - Central Excise

Classification of mixtures of spices - whether under Chapter 9 of the Central Excise Tariff as claimed by the appellant or under Chapter 21 as stated by the Department - Held that - The conclusion of the Original Authority is not substantiated to the effect that how such addition of certain chemicals or additives has taken away the essential character of the spice mix. The predominant and the critical character of the mix is derived from the spices only. The addition of additives and chemicals for whatever proportion has not taken away the essential character of the spice mix in its flavour, aroma, etc. There is no concrete evidence or discussion in the finding of the Original Authority to that effect. Further, the addition of ingredients like onion powder, garlic powder and tamarind, etc was considered as addition of other materials. This is factually incorrect as the garlic and turmeric or tamarind are the spices as understood in common parlance as well as by the experts in the field. The Spice Board clearly indicates the garlic and tamarind as Indian spices. Hence, the addition of these items if at all cannot be a consideration for excluding the classification for spice mixtures under Chapter 9. Having closely examined the scope of entry under Heading No.2103 and the scope of Chapter 9 of the Central Excise Tariff, we come to the conclusion that the spice mixtures produced by the appellants are to be classified under Chapter 9 and not under Heading No.21. - Decided in favour of assessee.

Summary

Issues: Classification of spice mixtures under Central Excise Tariff

Analysis:

1. Issue of Classification:
The case involved 9 appeals, with the main appellant engaged in manufacturing namkeens and potato chips using spice mixtures. The classification dispute was whether the mixtures of spices should be classified under Chapter 9 or Chapter 21 of the Central Excise Tariff. The main appellant argued for classification under Heading No.09109100 of Chapter 9, emphasizing the essential character retention of the mixtures. The Revenue contended that the addition of substances like jaggery, tamarind, and salt excluded the mixtures from Chapter 9 classification.

2. Arguments and Findings:
The appellant's counsel argued that the mixtures retained the essential character of spices despite the addition of other substances, citing Chapter 9 notes and HSN Explanatory Notes. The ld. Commissioner emphasized the importance of essential character retention post-addition of materials from other chapters. However, the findings lacked clarity on how the mixtures lost their essential character. The Original Authority's conclusion that the mixtures no longer retained their essential character was disputed by the appellant, highlighting the critical character derived from spices.

3. Legal References and Circular:
The Board's Circular No.205/39/96-CX provided guidance on the classification of spices and condiments, emphasizing the essential character in adding flavor, aroma, and pungency. The judgment clarified that ingredients like garlic and tamarind were spices, supporting the classification of spice mixtures under Chapter 9. The analysis concluded that the spice mixtures produced by the appellants should be classified under Chapter 9, not Chapter 21 of the Central Excise Tariff.

4. Decision and Outcome:
The Tribunal allowed the appeals filed by the main appellant and other appellants, settling the classification issue in favor of the main appellant. The judgment focused solely on the classification of the goods, leading to the consequential relief granted to the appellants based on the classification under Chapter 9 of the Central Excise Tariff.