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2024 (8) TMI 471 - AT - Central ExciseClassification of goods - Health mix - Dia Mix - Dia Food - Ragi Malt - Badam Mix - instant food preparations - Valuation of the goods under section 4A of CEA 1944 - non-clubbing of value of clearances made by SHFPL with that of SFPPL, with the goods having been manufactured in the same factory and clearing the same clandestinely - Invoking the extended period of time along with imposition of penalties. Classification of the impugned goods - Health Mix - HELD THAT - Health Mix classified by revenue under heading 1904 1090 of CETA 1985 The appellant has stated that health mix consist of 82% of cereals of different varieties, 12% of pulses and 2% on nuts namely ground nuts, cashew nut and Badam, 3% sugar and 1% cardamom. Admittedly all the above products are grounded and pulverized and made into a powder or to a flour floor form and mixed to constitute a health mix which is a food substitute. The end product is neither in the form of flakes or grain or in a grain worked form. He hence stated that the question of classifying the same under CH 1904 is ruled out since that Chapter covers only products in flakes or grain form - with revenue changing its own earlier classification proposal, the duty demanded during the impugned period cannot be sustained. Dia Mix and Dia Food - It has been brought to notice by the appellant that the demand for the said goods was dropped and the classification left open vide OIO No 33-34 / 2016 dated 21.07.2016. Hence it is found that the classification made and the duty demanded during the impugned period for the said goods also cannot be sustained. Ragi malt/ Badam mix - While revenue classified the product under heading CH 2106 1000 of CETA 1985, for the subsequent period it had given up the above classification and dropped the proceedings vide OIO No. 33-34 / 2016 dated 21.07.2016. In later proceedings the classification of Badam mix was confirmed under heading 2106 9099 vide OIO No. 59/2017 dated 21.06.2017. In the OIO No. 12/2021 dated 22/03/2021 the respondent classified Ragi malt under CH 1901 9090 and thus revenue has abandoned the earlier classification under CH 21061000 for both the products. This being so, the demand for the impugned period, on the said goods, fail. The department has failed to discharge the burden of proof regarding the classification of the impugned goods, thereby the demand for duty made in the said orders must fail along with the penalties etc. Once the duty on the goods are found to have been wrongly confirmed and merits to be set aside, the revised valuation of the goods and the issue of clubbing of clearances from the same factory also does not survive. The impugned orders are set aside - Appeal allowed.
Issues involved:
1. Classification of the impugned goods 2. Valuation of the goods under section 4A of CEA 1944 3. Clubbing of clearances of SFPPL with SHFPL 4. Invocation of extended period and imposition of penalties Detailed Analysis: 1. Classification of the Impugned Goods: The judgment discusses the classification of various food products under the Central Excise Tariff Act, 1985. The appellants contested the classification done by the revenue for products such as 'Health Mix', 'Dia Mix', 'Dia Food', 'Ragi Malt', and 'Badam Mix'. The burden of proof lies with the Revenue to establish the correct classification of goods. The judgment cites legal precedents emphasizing that if the Revenue fails to discharge this burden satisfactorily, the classification claimed by the assessee remains undisturbed. The Tribunal found that the Revenue did not provide sufficient evidence to support its classification of the goods, leading to the duty demanded during the impugned period being unsustainable. 2. Valuation of Goods under Section 4A of CEA 1944: The judgment mentions that once the duty on the goods is found to have been wrongly confirmed, the issue of revised valuation of the goods does not survive. This implies that since the classification of goods was not established by the Revenue, the valuation of the goods under Section 4A of the Central Excise Act, 1944, also cannot be upheld. 3. Clubbing of Clearances of SFPPL with SHFPL: The Tribunal addressed the issue of whether the clearances made by SFPPL should be clubbed with those of SHFPL as per a specific notification. However, since the classification of goods was found to be incorrect and the duty demanded was unsustainable, the question of clubbing clearances from the same factory became irrelevant. 4. Invocation of Extended Period and Imposition of Penalties: The judgment also discusses the invocation of the extended period for raising demands and the imposition of penalties. Since the classification of goods was not proven by the Revenue, the demands raised during the extended period, along with penalties, were set aside. The Tribunal concluded that the impugned orders were to be set aside, and the appellants were eligible for consequential relief as per the law. In conclusion, the judgment focused on the incorrect classification of goods by the Revenue, leading to the demands for duty, valuation, and penalties being deemed unsustainable. The appellants were granted relief, and the impugned orders were set aside.
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