2001 (12) TMI 128 - AT - Central Excise

Summary

Issues involved:
Classification of sugar solution as sugar syrup under Central Excise duty.

Analysis:
The appeal revolves around the question of whether the sugar solution prepared by the appellant is chargeable to Central Excise duty under sub-heading No. 1702.30 as sugar syrup. The appellant's argument is based on the premise that the sugar solution they prepare is solely for the removal of impurities and convenient addition of sugar, not for market sale. They cite differences in the preparation process compared to established sugar syrup manufacturing methods involving additives like citric acid and activated carbon. The Deputy Commissioner vacated the proceedings, emphasizing the lack of bio-technology in the appellant's process. However, the Commissioner (Appeals) allowed the appeal based on a circular indicating shelf life for sugar solution without preservatives.

The appellant's counsel highlights various circulars by the Board, indicating that sugar syrup is an excisable product with a shelf life and marketability criteria. They argue that the appellant's product does not meet the 65% sugar content threshold for classification as sugar syrup, as per the opinion of the Chief Chemist. Referring to a previous tribunal case, they assert that the appellant's solution is not sugar syrup but a sugar solution due to the lack of required sugar concentration. They also emphasize the unstable nature of the product, unsuitable for market sale.

On the contrary, the Departmental Representative argues that any sugar dissolved in water qualifies as sugar syrup, citing the HSN Explanatory Note. They rely on a precedent where sugar syrup obtained by dissolving sugar crystals in water was classified under sub-heading 1702.30. The appellant distinguishes this precedent by pointing out the stability issue in the present case, contrasting it with a case where marketability was not contested.

The Tribunal's decision involves a detailed analysis of the Chief Chemist's opinion, which indicates that a sugar solution with 65% or more sugar content can have a shelf life without preservatives. The Tribunal emphasizes the marketability test for goods to be dutiable, citing a Supreme Court ruling. They note the absence of evidence regarding the sugar concentration in the impugned goods and refer to a previous case where sugar syrup below 65% sugar content was deemed non-excisable. Consequently, the Tribunal remands the matter to the adjudicating authority for fresh assessment to ascertain the sugar concentration in the product before making a final decision.