9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (7) TMI 585 - AT - Central ExciseClassification of goods - Aloe Vera juice Aloe Vera powder amla juice and amla powder - whether classifiable under chapter 6 as originally classified by the appellant or under Chapter Heading 13021919 as confirmed in the impugned order or under Chapter Heading 20098990 as now claimed by the appellant? - demand of differential duty alongwith interest - extended period of limitation - imposition of penalties. Classification of Aloe Vera juice Aloe Vera powder amla juice and amla powder - classified under Chapter 13 or under Chapter 20? - HELD THAT - Chapter 13 deals with lac gums resins and other vegetable saps and extracts. Chapter note 1 specifically shows that Chapter Heading 1302 applies interalia to liquorice extract and extract of pyrethrum extract of hops and extract of aloes. This note also excludes certain types of products to which this heading does not apply. The exclusions in this chapter note do not cover aloevera juice aloevera powder amla juice and amla powder. The exclusion also does not cover specifically any product which can also be covered under Chapter 20 - On the other hand Chapter Notes to Chapter 20 also do not exclude any products which may fall under Chapter 13. Chapter Heading 2009 clearly covers fruit juices and vegetable juices unfermented and not containing added spirit whether or not containing added sugar or sweetening matter. It is equally logical to classify the aloe vera juice and amla juice under Chapter Heading 2009 as claimed by the appellant. However we find no ground to call the powders manufactured by the appellant as juices as powder is a solid and the juice is a liquid. There is nothing in the description of Chapter Heading 2009 to suggest that it also includes powders. Therefore the aloe vera powder and amla powder manufactured by the appellant cannot be classified under Chapter Heading 2009 - as far as the aloe vera juice and amla juice are concerned both chapter heading 1302 and Chapter Heading 2009 equally merit consideration and therefore Chapter Heading 2009 being the last in the numerical order prevails in terms of General Rules of Interpretation Rule 3(c). Therefore aloe vera juice and amla juice are classifiable under Central Excise Tariff Heading 2009 as claimed by the appellant. Aloe vera powder and amla powder - HELD THAT - They are not juices they are not classifiable under Tariff Heading 2009. Being extracts of vegetables they are classifiable under 1302. Extended period of limitation - HELD THAT - In terms of Section 11A of the Central Excise Act extended period of limitation can be invoked only in cases of fraud collision wilful misstatement suppression of facts or violation of Act or Rules with an intention to evade payment of duty. Claiming wrong classification cannot be the ground for invoking extended period of limitation therefore the entire demand beyond normal period of limitation needs to be set aside. Demand of Interest - HELD THAT - Once the duty is payable to some extent interest on that amount has to be paid as per law and this is not a matter of discretion. Penalties - HELD THAT - No penalty can be imposed under Section 11AC as there is no element of fraud collusion wilful misstatement or suppression of facts or violation of the provisions of the Act or Rules with an intent to evade payment of duty. No penalty is imposable upon the appellant under Rule 25 also as the assessee has not violated any Rules and it is only a matter of difference of opinion regarding classification by the assessee and by the department. Therefore all penalties are also set aside. All appeals are remanded to the original authority for the limited purpose of calculation of demand - appeal allowed by way of remand.
Issues Involved:
1. Classification of Aloe Vera juice, Aloe Vera powder, Amla juice, and Amla powder. 2. Recovery of differential duty along with interest. 3. Invocation of extended period of limitation under Section 11A. 4. Imposition of interest on the demanded duty. 5. Imposition of penalties under Section 11AC of the Central Excise Act, 1944, and Rule 25 of Central Excise Rules, 2002. Detailed Analysis: 1. Classification of Aloe Vera juice, Aloe Vera powder, Amla juice, and Amla powder: The primary issue is whether the products are classifiable under Chapter 6, Chapter 13, or Chapter 20 of the Central Excise Tariff. Initially, the appellant classified their products under Chapter 6, but during adjudication, they conceded that Chapter 6 was incorrect and claimed classification under Chapter 20 as fruit juices. The Revenue argued for classification under Chapter 13 as extracts. The Tribunal found that Aloe Vera juice and Amla juice should be classified under Chapter 20 (Heading 2009) as vegetable juices, while Aloe Vera powder and Amla powder should be classified under Chapter 13 (Heading 1302) as vegetable extracts. 2. Recovery of differential duty along with interest: The Tribunal upheld the recovery of differential duty for Aloe Vera powder and Amla powder under Chapter 13. For Aloe Vera juice and Amla juice, the duty demand was to be recalculated under Chapter 20. The Tribunal also allowed the cum-duty benefit, treating the sale price as the cum-duty price, and extended the benefit of CENVAT credit on inputs and input services. 3. Invocation of extended period of limitation under Section 11A: The Tribunal found that the extended period of limitation was incorrectly invoked. The only ground for invoking the extended period was the incorrect classification by the appellant, which does not constitute fraud, collusion, wilful misstatement, or suppression of facts. Thus, the demand beyond the normal period of limitation was set aside. 4. Imposition of interest on the demanded duty: Interest on the duty was upheld as per law. The Tribunal noted that once the duty is payable, interest on that amount must be paid, and this is not a matter of discretion. 5. Imposition of penalties under Section 11AC of the Central Excise Act, 1944, and Rule 25 of Central Excise Rules, 2002: The Tribunal set aside all penalties, finding no element of fraud, collusion, wilful misstatement, or suppression of facts. The issue was merely a difference of opinion regarding classification, and thus, no penalties under Section 11AC or Rule 25 were warranted. Conclusion: 1. Aloe Vera juice and Amla juice are classifiable under Chapter 20 (Heading 2009). 2. Aloe Vera powder and Amla powder are classifiable under Chapter 13 (Heading 1302). 3. The extended period of limitation is not applicable, and the demand beyond the normal period is set aside. 4. The demand shall be recomputed, treating the sale price as the cum-duty price and extending CENVAT credit benefits. 5. Interest on the demands is upheld. 6. All penalties are set aside. 7. The appeals are remanded to the original authority for recalculation of the demand as per the Tribunal's directions. (Order pronounced in open court on 22/07/2020)
|
