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2025 (3) TMI 377 - AT - Central ExciseClassification of the product manufactured and classified by the Assessee-Respondent - spices or Mixed Condiments and Mixed Seasoning - to be classified under Tariff Item No. 09109100 or under Tariff Item No. 21039040 - HELD THAT - Only by establishing presence of more than certain quantity of substances in a particular product the individuality of the product would not be necessarily lost and therefore in such an event the classification done by Appellant for its disputed products which had also undergone quasi-judicial scrutiny way back in 2009 and accepted by the Department not to be brought again to any further dispute. As it is noticed the products described in this appeal are even of similar names (example Pav Bhaji spice mix etc.) as found mentioned in the initial order. The classification adopted by the Respondent-Assessee is confirmed and the proposed classification of the Appellant-Department is rejected which also had remained unsustainable before the Adjudicating Authority namely the Principal Commissioner. Conclusion - The classification of the product under Tariff Item No. 09109100 as a spice upheld. Appeal dismissed.
1. ISSUES PRESENTED and CONSIDERED
The core legal question considered in this judgment is the appropriate classification of the product manufactured by the Assessee-Respondent under the Central Excise Tariff Act (CETA), 1985. The specific issue is whether the product should be classified under Tariff Item No. 09109100 as 'spices' attracting a 'nil' rate of duty or under Tariff Item No. 21039040 as "Mixed Condiments" and "Mixed Seasoning," which are subject to a 12.5% excise duty. The dispute also involves the interpretation of the essential character of the product and whether it retains the characteristics of a spice mix despite the presence of other ingredients. 2. ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents: The classification under CETA, 1985, is guided by the definitions provided in Chapter 9 and Chapter 21 of the Tariff Act. Supplementary Notes 2 and 3 to Chapter 9 define "spice" and allow for the inclusion of other substances as long as the mixture retains the essential character of spices. Chapter 21, on the other hand, includes "Mixed Condiments" and "Mixed Seasoning" when the mixture no longer retains the essential character of a spice. The Tribunal considered precedents such as the decision of the Hon'ble Supreme Court in the case of A.P. Products vs. State of Andhra Pradesh, which discussed the transformation of ingredients into a new product with a distinct identity. Court's Interpretation and Reasoning: The Tribunal focused on whether the essential characteristics of the spice mix were lost due to the presence of other ingredients. The Appellant-Department argued that the presence of more than 75% of other ingredients meant the product no longer retained its essential spice character. The Assessee-Respondent countered with chemical examination reports and previous adjudications supporting their classification under Chapter 9. Key Evidence and Findings: The Tribunal examined chemical examination reports from both parties, including those from recognized institutes, and prior decisions by the Commissioner. The Tribunal also considered the absence of statements from end-users, which would have helped establish the product's nature. Application of Law to Facts: The Tribunal applied the legal definitions and precedents to the facts, emphasizing the need for the product to retain its essential spice character to be classified under Chapter 9. The Tribunal found that the presence of other ingredients did not necessarily result in the loss of the spice character, as the product was still used to add flavor and aroma to dishes. Treatment of Competing Arguments: The Tribunal considered the Appellant-Department's reliance on the A.P. Products case but found it inapplicable as the essential character of the spice mix was not lost. The Tribunal also noted the lack of end-user statements and the previous acceptance of similar classifications by the Department. Conclusions: The Tribunal concluded that the spice mix retained its essential character as a spice and should be classified under Tariff Item No. 09109100, attracting a 'nil' rate of duty. 3. SIGNIFICANT HOLDINGS Core Principles Established: The Tribunal established that the essential character of a product must be determined by its function and use, not merely by the proportion of ingredients. The classification should reflect the product's primary purpose, which in this case, was to add flavor and aroma to dishes. Final Determinations on Each Issue: The Tribunal upheld the classification of the product under Tariff Item No. 09109100 as a spice, confirming the order of the Principal Commissioner. The appeal by the Appellant-Department was dismissed, and the Tribunal confirmed that the product did not lose its essential spice character despite the presence of other ingredients.
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