2018 (2) TMI 1494 - AT - Central Excise

Classification of goods - Pulihora Paste - Biryani Masala Paste - respondent have classified the said products under Chapters 9 and Chapter 20 respectively of the Central Excise Act, 1985 claiming benefit of nil rate of duty - Revenue sought to classify the said products under chapter 21 as mixed condiments and seasoning liable to Central Excise Duty at the applicable rate - Held that - as regards Pulihora Paste , the First Appellate Authority has recorded that The essential character of these Spices viz., aromatic, flavouring and seasoning etc., would definitely form part of the resultant product Pulihora Paste . It is understood that Pulihora Paste is not a ready to eat product but it has to be added with cooked rice, fried in hot edible oil, ground/cashew nuts if desired. Such a functional use of the impugned product is exclusively for rendering Pulihora the food preparation with aromatic, flavouring or seasoning properties - classified under chapter 9. Biryani Masala Paste - Held that - the judgment of the Tribunal in the case of Narendrakumar & Co., 2008 (6) TMI 621 - CESTAT MUMBAI , squarely covers the issue in favor, where it was held that Biryani Masala Paste would not fall under Chapter 20 it will fall under Chapter 9 and the respondents have claimed same under Chapter 20 the effect being that product Biryani Masala Paste is attracting nil rate of duty in both Chapters - decided in favor of assessee. Appeal dismissed - decided against Revenue.

Summary

Issues:
Classification of 'Pulihora Paste' and 'Biryani Masala Paste' under Central Excise Act, 1985.

Analysis:
1. Classification of 'Pulihora Paste':
The dispute in this case revolves around the classification of 'Pulihora Paste' under Chapters 9, 20, and 21 of the Central Excise Act. The Revenue sought to classify the product under Chapter 21, while the respondent claimed it should be under Chapters 9 or 20. The First Appellate Authority set aside the Order-in-Original and allowed the appeals filed by the respondents. The Revenue contended that 'Pulihora Paste' should be classified under Chapter 21 as mixed condiments and seasonings, liable to Central Excise Duty. However, the First Appellate Authority, supported by the Board Circular No.205/39/96-CX, classified the product under Chapter 9 as it consists predominantly of spices with aromatic, flavoring, and seasoning properties. The impugned order correctly articulated the reasons for classifying 'Pulihora Paste' under Chapter 9, and the Bench concurred with this decision, rejecting the Revenue's appeal.

2. Classification of 'Biryani Masala Paste':
Regarding the classification of 'Biryani Masala Paste,' the Tribunal's judgment in a previous case supported the respondent's claim that the product should fall under Chapter 9 instead of Chapter 20. The Tribunal held that 'Biryani Masala Paste' does not align with Chapter 20 and should be classified under Chapter 9, attracting a "nil" rate of duty in both chapters. The Bench found merit in the contentions raised by the Learned Counsel and upheld the Tribunal's decision. Consequently, the impugned order was deemed correct and legal, requiring no interference, and was upheld, setting aside the appeal.

In conclusion, the judgment by the Appellate Tribunal CESTAT Hyderabad clarified the classification of 'Pulihora Paste' and 'Biryani Masala Paste' under the Central Excise Act, 1985. The decision was based on a thorough analysis of the products' composition, properties, and relevant legal provisions, ultimately upholding the classifications determined by the First Appellate Authority and the Tribunal in favor of the respondents.