2016 (8) TMI 1059 - AT - Central Excise

Classification - Lever Ayush Poshak Rasayan and Lever Rakshak Rasayan - Whether to be classified under chapter heading 2104.10 and/ or 2104 20 00 as per appellant or under chapter heading 2106 90 99 as the Food Supplement as per Revenue - Held that - based on the quotes from Explanatory Notes to HSN, it is clear that the subject items are in the category of food supplements and are rightly classifiable under Chapter Heading 2106.90 99. Invokation of extended period of limitation - Demand - differential duty for the period of five years preceding the relevant date - Held that - Revenue has not produced any specific evidence(s) to prove that there has been deliberate suppression on the part of the assessee appellant with intention to evade payment of Central Excise duty. Therefore, the Revenue can charge differential duty only for the period of one year preceding to the relevant date and for quantification of said differential duty for period of one year chargeable from the appellant the matter deserves to be remanded to the original adjudicating authority. - Appeal partly disallowed and partly remanded back

Summary

Issues: Classification of items Lever Ayush Poshak Rasayan and Lever Rakshak Rasayan, Invocation of extended period clause for charging differential duty

The judgment by the Appellate Tribunal CESTAT NEW DELHI involved the classification of two items, namely Lever Ayush Poshak Rasayan and Lever Rakshak Rasayan, and the invocation of the extended period clause for charging differential duty. The appellant, M/s Drytech Processors (I) Pvt. Ltd., and the Revenue both appealed against the common order-in-appeal dated 31.03.2009. The appellant argued that the items should be classified under chapter heading 2104.10 and/or 2104 20 00, while the Revenue contended that they should be classified under chapter heading 2106 90 99 as food supplements.

The counsels for the appellant provided detailed submissions supporting the classification under chapter heading 2104.10 and/or 2104 20 00, and argued against the invocation of the extended period clause for charging duty. They cited various case laws to support their position. On the other hand, the Revenue, represented by the DR, reiterated the findings of the lower authorities and maintained that the items should be classified under chapter heading 2106 90 99 as food supplements.

After careful consideration of the submissions and relevant chapter notes, the Tribunal found that the items did not qualify as Homogenous Composite Food Preparations under chapter headings 2104 20 00 or 2104 90 of Central Excise Tariff. The Tribunal referred to Chapter Note 3, which defines homogenised composite food preparations as those put up for retail sale as infant food or for dietetic purposes, which did not apply to the subject items. The Tribunal agreed with the lower authorities that the items were food supplements, falling under chapter heading 2106 90 99.

The Tribunal also referenced Explanatory Notes to HSN for clarification, which confirmed that the subject items were indeed food supplements and classifiable under Chapter Heading 2106.90 99. Regarding the demand for differential duty for the past five years, the Tribunal found no concrete evidence of deliberate suppression by the appellant to evade payment of Central Excise duty. Therefore, the Tribunal ruled that the Revenue could only charge differential duty for the period of one year preceding the relevant date.

In conclusion, the Tribunal held that the subject items should be classified under chapter heading 2106 90 99 and remanded the matter to the original adjudicating authority for the quantification of duty for the one-year period. Both appeals were decided accordingly, and cross objections were disposed of. The judgment was pronounced in open court on 12.08.2016.