2016 (10) TMI 133 - AT - Central Excise

Classification - Jaljeera - Held that - the ruling by Hon ble Apex Court in the case of Commercial Tax Officer Vs. Jalani Enterprises 2011 (3) TMI 311 - SUPREME COURT OF INDIA has held that Jaljeera is nothing but a Masala packed into packets of different nature. We have also gone through the chapter note 3 of chapter 9 of schedule to Central Excise Tariff Act, 1985 in respect of the law prevailed till 01-03-2005. In respect of the tariff which is with effect from 01-03-2005, the same contents of chapter note 3 of chapter 9, is reproduced in supplementary notes. The said chapter note 3 indicated that chapter sub heading 09.03 covers goods commonly known as Masala and chapter note 3 indicates that Masala is classifiable under chapter sub heading 09.03. Therefore, we hold that Jaljeera is classifiable under chapter sub heading 09.03 during the period up to 01-03-2005 and the same is classifiable under chapter sub heading 09.10 for period subsequent to 01-03-2005. Since in both the impugned orders, duty is confirmed on Jaljeera treating them as classifiable under 21.08 the demand does not sustain. Classification - Dehati Buknoo and Milk Masala - Held that - the issue is now settled that Dehati Buknoo (Hazmi), Milk Masala are classifiable under 09.03 or similar such classification subsequent to 01-03-2005 and since the impugned orders have confirmed the demand treating Dehati Buknoo and Milk Masala under 21.08, the said demand does not sustain. Demand aolngwith interest and penalty - Gulabjamun Mix - only trading not manufacturing - Held that - we find that the reliance for issue of Show Cause Notice dated 26-02-2009 is placed on letter dated 23-01-2009 submitted by Shubham Goldiee Masale (P) Ltd, along with Annexure-A and the said Annexure is enclosed to Show Cause Notice indicates that Shubham Goldiee Masale (P) Ltd, had claimed in the said communication that they were not involved in manufacture of Gulabjamun Mix but they were involved in only trading of the same. The reason for not relying on the said statement that it was not manufacturing Gulabjamun Mix is not forthcoming in the Show Cause Notice nor in any of the earlier Show Cause Notices. Therefore, none of the Show Cause Notices involved in the impugned orders are sustainable for demand of duty in respect of Gulabjamun Mix under Central Excise Act, 1944. - Decided partially in favour of appellant

Summary

Issues:
1. Classification of various Masalas under Central Excise Act
2. Demand raised on goods including Gulabjamun Mix
3. Show Cause Notices issued to Ashok Grih Udyog Kendra Ltd.
4. Appeals filed by Shubham Goldiee Masale (P) Ltd. and Ashok Grih Udyog Kendra Ltd.
5. Grounds of appeal raised by both parties
6. Ruling on the classification of Jaljeera, Dehati Buknoo, and Gulabjamun Mix
7. Decision on demands and penalties imposed

Analysis:
1. Classification of Masalas: The judgment dealt with the classification of various Masalas under the Central Excise Act. The issue arose regarding the classification of products like Jaljeera, Dehati Buknoo, and Milk Masala. The Hon'ble Apex Court's ruling on Jaljeera as a Masala packed into packets was cited, and it was determined that these products fell under Chapter Sub-heading 09.03. The chapter note 3 of chapter 9 supported this classification, leading to a decision in favor of the appellants.

2. Demand on Goods: The demand raised on goods, including Gulabjamun Mix, was a significant issue in the judgment. The Show Cause Notices issued to Shubham Goldiee Masale (P) Ltd. raised concerns about the classification of goods under Chapter Heading 21.08/21.06. However, it was argued that Shubham Goldiee Masale was only involved in trading Gulabjamun Mix, not manufacturing it. The reliance on documents and statements led to the conclusion that the demands confirmed by the Original Authority were contrary to the law.

3. Show Cause Notices to Ashok Grih Udyog Kendra Ltd.: Ashok Grih Udyog Kendra Ltd. was issued Show Cause Notices covering periods from 1996 to 2006. The Notices proposed the classification of Masalas under Chapter Sub-heading 2108, contrary to the classification claimed by the company under Chapter Sub-heading 09.03. The adjudication resulted in the confirmation of demands for certain products while dropping demands for others, with penalties imposed accordingly.

4. Appeals and Grounds: Appeals were filed by Shubham Goldiee Masale (P) Ltd. and Ashok Grih Udyog Kendra Ltd. against the Orders-in-Original. The grounds of appeal included arguments related to the classification of products, relying on previous rulings and orders. Both parties contested the demands and penalties imposed by the Original Authority.

5. Ruling and Decision: The judgment extensively analyzed the classification of Jaljeera, Dehati Buknoo, and Gulabjamun Mix. The Hon'ble Apex Court's ruling on Jaljeera as a Masala was key in determining the classification under the Central Excise Act. The decision favored the appellants, setting aside demands and penalties imposed by the Original Authority. The judgment allowed both appeals partially, granting the appellants consequential benefits as per the law.

This comprehensive analysis of the judgment highlights the key issues, arguments, and decisions made by the tribunal regarding the classification and demands related to Masalas under the Central Excise Act.