2017 (12) TMI 481 - AT - Central Excise

Classification of goods - repacking of product - Parry s Natural Beta Carotene - Pro 9 Natural Mixed Carotenoids - classified under CTH 2936.00 of Central Excise Tariff Act, 1985 or under CTH 2108.99 of CETA? - Held that - The respondent has undertaken repacking of the goods received by them in bulk into the form of capsule - As clearly held by the Commissioner (A), the goods remain the same and there is not even addition of vitamin during the process of repacking. There is no justification in reclassifying the product upon repacking into 2108 - appeal dismissed - decided against Revenue.

Summary

Issues: Classification of goods under Central Excise Tariff Act, 1985 - Nature of goods as food supplements - Repacking process affecting classification - Appeal against Order-in-Appeal.

Analysis:
1. Classification Dispute: The case involved a dispute regarding the classification of goods "Parry's Natural Beta Carotene" and "Pro 9 Natural Mixed Carotenoids" under the Central Excise Tariff Act, 1985. The original authority classified the goods under subheading 2108.99, while the respondents claimed classification under Chapter sub-heading 2936.00. The Commissioner (A) allowed the appeal of the respondent, leading to the Revenue filing the present appeal challenging this classification.

2. Nature of Goods: The Revenue argued that the goods in question were food supplements and should be classified under 2108.99. However, the respondents received the goods in bulk and undertook the process of encapsulation, repacking the raw material into capsule form for retail sale. The respondents contended that encapsulation did not alter the identity or character of the raw material, maintaining that the final product should also be classified under 2936 as a pro-vitamin.

3. Decision and Rationale: The Commissioner (A) examined the process of manufacture, where the raw material was repacked into capsules without undergoing any change in identity. Relying on a previous Tribunal decision, the Commissioner concluded that the repacking did not amount to a new product or manufacturing process. As no new elements were added during encapsulation, the goods were deemed to remain the same, leading to the classification under 2936. The Tribunal upheld the Commissioner's decision, rejecting the Revenue's appeal and maintaining the classification under 2936.

4. Final Verdict: The Tribunal, after considering the arguments and the process involved in repacking the goods, found no grounds to reclassify the product under 2108.99 as dietary supplements. As the goods remained unchanged and no additional elements were introduced during encapsulation, the Tribunal upheld the Commissioner's decision, dismissing the Revenue's appeal and confirming the classification under 2936. The impugned order was upheld, and the Revenue's appeal was rejected.

This detailed analysis showcases the classification dispute, the nature of goods, the rationale behind the decision, and the final verdict of the Tribunal, providing a comprehensive understanding of the legal judgment.