2022 (9) TMI 164 - AT - Central Excise

Classification of goods - non-alcoholic beverage bases/concentrates - to be classified under sub-heading 3302 10 of Schedule to Central Excise Tariff Act, 1985 or under sub-heading 2108 10 of the Schedule to Central Excise Tariff Act, 1985? - recovery of differential duty - HELD THAT - It is not in dispute that the show cause notices disposed off were periodical demands in continuation of the first show cause notice and the dispute therein had been carried to the Tribunal in BRITCO FOODS COMPANY LTD. VERSUS COMMISSIONER OF C. EX., PUNE 2000 (10) TMI 76 - CEGAT, MUMBAI and the appeal of Revenue before the Hon ble Supreme Court was dismissed on the acknowledgement that the classification exercise was academic in the light of the consequence being revenue neutral. The scope of appellate remedy is unambiguously clear the challenge should be to an order for not being legal and proper and solecism in articulation or inaccuracies of expression are not sanctioned as grounds for appeal. There is no doubt that the Hon ble Supreme Court did not render a finality to the dispute over classification but the Tribunal, indubitably, has. That finality can be shaken only by a reversal in the highest court of the land and, until then, the law settled by the Tribunal prevails; failure to recognise that finality places orders of original authority and first appellate authorities in peril and for consequences of breach of discipline. Thus, no case has been made out by Revenue for an alternate approach to the classification as settled - appeal dismissed.

Summary

Issues:
Classification of goods under central excise tariff act, 1985 - Dispute over differential duty payment - Interpretation of relevant headings - Legal implications of circular no. 114/18/86-CX3 - Previous judicial decisions impact on current appeal - Applicability of Supreme Court judgment - Revenue's challenge to finality of classification - Compliance with appellate orders - Correctness of classification by Tribunal.

Analysis:
The appeal before the Appellate Tribunal CESTAT Mumbai arose from an order-in-original by the Commissioner of Central Excise, Pune-I dropping proceedings initiated through three show cause notices for the recovery of differential duty from a company. The issue revolved around the classification of 'non-alcoholic beverage bases/concentrates' under the central excise tariff act, 1985, specifically under sub-headings 3302 10 and 2108 10. The respondent had adopted a classification based on a circular from the Central Board of Excise & Customs (CBEC). However, subsequent notices were issued, and the matter went through various adjudications and appeals, including a decision by the Hon'ble Supreme Court emphasizing revenue neutrality without deciding the merit of the claims.

The Tribunal noted that the dispute had been previously resolved by the Supreme Court and that the present appeal questioned the legality of that finding. The Tribunal emphasized the importance of recognizing the finality of decisions made by higher appellate authorities to maintain discipline and avoid undue harassment to assessees. The Tribunal referred to relevant legal principles emphasizing the binding nature of orders from appellate authorities on subordinate officers.

In analyzing the classification issue, the Tribunal delved into the specific headings and explanatory notes under the central excise tariff act, 1985. It compared the descriptions under heading 21.08 and 33.02, focusing on the nature of the goods and their intended use in the food and beverage industry. The Tribunal scrutinized the characteristics of the products in question, considering factors such as flavor, carbonation, and brand identity to determine the appropriate classification. It highlighted the importance of interpreting the tariff headings in line with the explanatory notes and relevant legal precedents.

Ultimately, the Tribunal upheld the classification determined by the Assistant Commissioner, finding it to be correct based on the descriptions and characteristics of the goods. The Tribunal rejected Revenue's challenge to the classification, concluding that no case had been made out for an alternate approach. The appeal was dismissed, affirming the classification and consequently rendering the demand for duty unsustainable.

In conclusion, the Tribunal's detailed analysis of the classification issue, consideration of legal principles, and adherence to previous judicial decisions underscored the importance of consistency and compliance with appellate orders in tax matters. The judgment provided a comprehensive interpretation of the central excise tariff act, 1985, and emphasized the significance of legal clarity and precision in classification disputes to ensure fair and equitable treatment for all parties involved.