1996 (3) TMI 187 - AT - Central Excise

Issues:
Classification of the product "Pan Chatni" under the Central Excise Tariff Act, 1985.

Detailed Analysis:
1. The issue at hand in the appeals filed by M/s. Harichand Shri Gopal revolves around the classification of the product known as "Pan Chatni." The Collector of Central Excise (Appeals) had previously classified the product under sub-heading No. 2107.91 of the Tariff, which covers "edible preparations not elsewhere specified or included."

2. During the hearing, the appellant's advocate argued that their product, a flavored pan chatni with high sugar content, should be classified under sub-heading No. 2103.11 as "sauces, ketchup, and the like." They contended that their product was wrongly classified and should be exempt from excise duty based on Notification No. 12/90-C.E.

3. The appellant's representative emphasized that the product was specifically designed to be consumed with pan and did not have any other culinary use. They argued that the product's classification should align with similar products in the market under sub-heading No. 2103.11, highlighting the discrimination they faced in the classification process.

4. The respondent countered by asserting that despite being named "Pan Chatni," the product did not align with the traditional understanding of chatni and was solely intended for use with pan. They argued that the product's classification could be altered based on new information, as established in previous legal precedents.

5. The Tribunal examined the nature of the product, noting its ingredients and usage with sweetened pan. The product, containing sugar syrup and flavors, was marketed under specific brand names and primarily used with pan. The central issue was whether the product qualified as a chatni under sub-heading No. 2103.11 of the Tariff.

6. Applying the Doctrine of Noscitur A Sociis, the Tribunal analyzed the context of the term "sauces, ketchup, and the like." It concluded that the product in question did not share essential characteristics with traditional sauces or ketchup, especially in terms of ingredients, preparation, usage, and commercial understanding within the trade.

7. Referring to judicial precedents, including observations from the Hon'ble Supreme Court, the Tribunal emphasized the importance of interpreting classification based on common understanding and commercial usage. It highlighted that the product named "Pan Chatni" did not fit the criteria for classification as a sauce or ketchup.

8. The Tribunal further deliberated on the common understanding of chatni, emphasizing its association with food items and the lack of such association with the product in question. It clarified that excisability cannot be determined based on the product's label and highlighted the distinction between the product's usage with pan as opposed to traditional chatni with food items.

9. Drawing parallels from legal cases regarding the interpretation of common terms, the Tribunal underscored that the product's classification should align with its common understanding and usage. It stressed that the product's name alone, such as "Pan Chatni," does not dictate its classification under the Tariff.

10. Citing legal precedents related to exemption notifications and classification changes, the Tribunal emphasized the strict interpretation of exemptions and the limitations on altering goods' classification based on notifications.

11. Considering all relevant factors and legal principles, the Tribunal rejected the appeals and upheld the classification of the product "Pan Chatni" under sub-heading No. 2107.91 of the Tariff.

Conclusion:
The Tribunal's decision reaffirmed the classification of the product "Pan Chatni" under the Central Excise Tariff Act, 1985, based on its unique characteristics and usage, distinct from traditional sauces or ketchup. The judgment highlighted the importance of common understanding and commercial usage in determining product classification under the Tariff.

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