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1996 (3) TMI 206 - AT - Central Excise
Issues: Classification of sugar products under Central Excise Tariff headings 1701.90 and 1701.39
In this case, the appellant, a manufacturer of sugar products, appealed against the Collector's classification of sugar cubes, sugar sachets, and pharmaceutical grade sugar under sub-heading 1701.90 of the Central Excise Tariff, instead of the claimed classification under 1701.39. The dispute arose from the different processes involved in manufacturing these products and their market value. The Collector applied the principle of ejusdem generis, arguing that sub-headings 31 and 39 must be read together and that the appellant's classification would render the sub-heading redundant. The Collector also highlighted the differences in market value and characteristics of the products in question compared to regular sugar. However, the Tribunal found that the Collector erred in applying this rule to different tariff headings and that the products met the criteria specified in Note 2 to Chapter 17 of the Tariff regarding sucrose content. By analyzing the General Explanatory Notes in the Central Excise Tariff Act, the Tribunal determined that sub-headings 31 and 39 are sub-classifications of sugar other than khandsari sugar. As long as the material meets the sucrose content requirement and does not fall under specific sub-headings, it should be classified under either 31 or 39. The Tribunal emphasized that differences in form, packaging, or price do not exclude a product from being classified as sugar, citing a Supreme Court judgment to support this interpretation. The Tribunal accepted the appellant's argument that sub-heading 90 would cover items not classified elsewhere and that the sugar products should fall under either sub-heading 31 or 39 based on the sucrose content criteria. Since there was no evidence that the sugar was sold at government-fixed prices, the Tribunal concluded that it should be classified under Heading 39. Consequently, the appeals were allowed, with any consequential relief to follow.
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