2004 (5) TMI 143 - AT - Central Excise

Summary

Issues: Classification of product 'synthetic soft drink concentrate' under sub-heading 2108.10 instead of 2108.99 as claimed by the appellants.

In this appeal, the dispute centered around the classification of the product 'synthetic soft drink concentrate' manufactured by the appellants. The adjudicating authority had classified the product under sub-heading 2108.10, leading to a duty demand and penalty against the appellants, which was affirmed by the Commissioner (Appeals). The appellants contended that the product should be classified under sub-heading 2108.99 based on Chapter Note V of Chapter 21, arguing against the application of the Board's Circular dated 8-2-1999. The learned SDR supported the impugned order, leading to a hearing where both sides presented their arguments.

Upon careful consideration, the Tribunal noted that the specific description in a tariff heading should prevail over a general description in another heading. The product in question, synthetic soft drink concentrate, was found to fall squarely under sub-heading 2108.10, which covers preparations for lemon, lemonades, or other beverages intended for use in the manufacture of aerated water. The Tribunal rejected the appellants' plea that their product did not contain certain ingredients or could not be used in automatic vending machines, as the product's characteristics aligned with the description under sub-heading 2108.10. The Tribunal emphasized that Chapter Note 5 of Chapter 21 did not exclude the applicability of sub-heading 2108.10 to the product. Additionally, the Tribunal referenced Circular No. 439/5/99-CX, dated 8-2-1999, which clarified the classification of synthetic soft drink concentrate/beverages under sub-heading 2108.10.

Furthermore, the Tribunal dismissed the argument that other manufacturers were classifying the same product under a different sub-heading, emphasizing that the appellants could not evade the appropriate duty by following a different classification. The Tribunal upheld the impugned order classifying the product under sub-heading 2108.10, confirming the duty demand. However, considering the issue involved in the classification, the Tribunal set aside the penalty imposed on the appellants. Consequently, the appeal was disposed of with the penalty being revoked while upholding the classification under sub-heading 2108.10 of the CETA.