2015 (10) TMI 1817 - AT - Central Excise

Classification of the coconut oil packed in less than 200 ml containers - Classification under Chapter 15 or under Chapter 33 - Held that - Original adjudicating authority in para 16 of his order, admitted that the classification of coconut oil has been the subject matter of dispute in a number of cases and in all those cases the classification was held under Chapter Heading 1503. Tribunal in the case of Madhan Agro Industries (India) Pvt. Ltd. Vs. CCE, Salem 2008 (6) TMI 582 - CESTAT CHENNAI as also in the case of Capital Technologies Ltd. & others Vs. CCE & ST, Tirupati Excise 2011 (5) TMI 901 - CESTAT BANGALORE has held the coconut oil packed in less than 200 ml packs to be edible oil falling under Chapter 15. Further the Tribunal decision in the case of Capital Technologies stands affirmed by the Hon ble Supreme Court, when the appeal filed by the Revenue was dismissed 2012 (1) TMI 179 - SUPREME COURT . We also note that the said dispute was the subject matter of the decision of the Hon ble High Court of Kerala in the case of Marico Ltd. Vs. Union of India vide their order 2009 (11) TMI 675 - KERALA HIGH COURT , wherein it has been held that in the absence of any stay or reversal of the Tribunal s decisions laying down that coconut oil packed and sold in packets of capacity up to 200 ml are not liable to excise duty, Revenue cannot confirm duty against the petitioner. - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
1. Correct classification of coconut oil packed in less than 200 ml containers - whether it falls under Chapter 15 (edible oil) or Chapter 33 (hair oil).

Analysis:
The Appellate Tribunal CESTAT Bangalore, comprising Members Archana Wadhwa and B S V Murthy, addressed the issue of classification of coconut oil in containers less than 200 ml. The appellant argued for classification under Chapter 15 (edible oil), while the Revenue contended it should be classified as hair oil under Chapter 33. The Tribunal noted that the original adjudicating authority acknowledged previous disputes on this matter, with consistent classification under Chapter 15 in various cases. Despite an amendment in Chapter Notes of Chapter 33, the Tribunal found it inapplicable to the current dispute, as Chapter 15 was not specified. Additionally, the Tribunal referenced previous decisions affirming coconut oil's classification under Chapter 15, rejecting the Revenue's reliance on a circular from 2009 that was deemed legally flawed by the Madras High Court.

Furthermore, the Tribunal highlighted other decisions supporting the classification of coconut oil as edible oil under Chapter 15. In cases involving Madhan Agro Industries and Capital Technologies Ltd., the Tribunal upheld the classification, with the latter's decision being affirmed by the Supreme Court. The High Court of Kerala also ruled in favor of non-levy of excise duty on coconut oil packed in containers up to 200 ml based on Tribunal decisions. Ultimately, the Tribunal concluded that the issue was settled in favor of the assessee by a series of decisions, setting aside the impugned order and granting relief to the appellant. The stay petitions were also disposed of in light of this decision.