1999 (11) TMI 249 - AT - Central Excise

Summary

Issues involved:
Classification of the product "Harbonic" under tariff headings 2107.91 and 2108.90; Consideration of Ayurvedic nature of the product; Interpretation of Central Excise Tariff Act based on HSN; Classification under Chapter 20 or Chapter 21; Relevance of Chapter Notes in classification; Specificity of Chapter Heading 20.01; Comparison of HSN entries with Central Excise Tariff entries; Applicability of Rule 3(a) of Interpretation of the Schedule.

Classification under tariff headings 2107.91 and 2108.90:
The Asstt. Commissioner confirmed the classification of the product "Harbonic" under sub-headings 2107.91 and 2108.90, leading to the imposition of duty. The Commissioner (A) upheld this decision based on the settled classification and the change in tariff description. A penalty was also imposed. The appellant contested this classification, arguing that the product should be considered an Ayurvedic tonic, supported by evidence of approval by the Directorate of Ayurvedic Medicament. The appellant claimed that the authorities did not consider the tariff provisions and misclassified the product under Heading 21.07, a residuary heading. The appellant's consultant argued for classification under Chapter Heading 2001.10.

Interpretation of Central Excise Tariff Act based on HSN:
The JDR cited the Wood Craft Products Limited case, emphasizing that the Act should align with the Harmonized System of Nomenclature (HSN) for classification. The JDR contended that detailed provisions in HSN supported classification under Heading 21.07 or 21.08. The HSN entries were deemed relevant in deciding the classification issue.

Classification under Chapter 20 or Chapter 21:
The Tribunal analyzed Chapter 20, specifically Heading 20.01, covering preparations of vegetables, fruit, nuts, or other plant parts. The appellants argued that their product aligned with this description, qualifying for classification under Chapter Heading 20.01. The department highlighted the detailed entries in HSN for Chapter 20 and proposed examination under Chapter 21, particularly the entry for "Miscellaneous Edible Preparations." Chapter Note 9(a) of Chapter 21 was also considered.

Relevance of Chapter Notes in classification:
The Tribunal examined Chapter Notes 1 of Chapter 20 and Note 9(a) of Chapter 21 to determine the appropriate classification. The specific entry in Rule 3(a) of the Interpretation of the Schedule was deemed crucial in classifying the product. The Tribunal found merit in the appellant's argument, leading to the conclusion that the product should be classified under sub-heading 2001.90 of Chapter 20. Consequently, the impugned order was set aside, and the appeals were allowed with any consequential relief as per the law.