1986 (9) TMI 253 - AT - Central Excise

Summary

Issues:
1. Classification of non-alcoholic beverage bases under Central Excise Tariff Schedule.
2. Eligibility for duty exemption under Central Excise notification No. 55/75.
3. Bar on limitation for notice of demand.
4. Justification of penalty imposition.

Detailed Analysis:
Issue 1: The judgment addresses the classification of non-alcoholic beverage bases under the Central Excise Tariff Schedule. The Collector of Central Excise, Baroda, and the Appellate Collector in Bombay concluded that the products did not qualify as food products or preparations eligible for duty exemption. They based their decision on whether the products could be offered as food to a normal human being. The judgment references the judgment of the Andhra Pradesh High Court in a similar case involving coffee-chicory powder, where it was held that the product was not a food product or preparation. The Appellate Tribunal considered the CCCN classification, noting that the products fell under heading No. 21.07, which includes food preparations. The Tribunal also rejected the argument that the Prevention of Food Adulteration Act definitions were applicable in this context.

Issue 2: The main issue in all appeals was the eligibility for duty exemption under Central Excise notification No. 55/75 for the non-alcoholic beverage bases. The appellants argued that the products fell under the scope of the notification as explained by a trade notice and supported their claim with orders from Appellate Collectors at Madras and Bombay. The judgment considered the import policy of the Government of India, listing the products under "Non-alcoholic beverage bases" as food items. The Tribunal also referenced the Encyclopedia Britannica, which classified beverages, including soft drinks, as foods. Ultimately, the Tribunal held that the non-alcoholic beverage bases were eligible for duty exemption under the notification.

Issue 3: The judgment also addressed the issue of whether the notice of demand was barred by limitation. The appellants contended that the notice was barred, but the Tribunal did not delve into this issue as the main focus was on the eligibility for duty exemption.

Issue 4: The imposition of a penalty on the appellants was also a point of contention. The Collector of Central Excise had imposed a penalty of Rs. 70,000 on the appellants. However, the Tribunal did not extensively discuss this issue as the main decision was in favor of the appellants regarding the eligibility for duty exemption. The Tribunal allowed the appeals, providing consequential relief to the appellants, as the non-alcoholic beverage bases were deemed eligible for duty exemption under the Central Excise notification.