2006 (9) TMI 26 - AT - Central Excise

Mouth Freshner Mixture of seeds (coriander ,aniseeds) as its principal constituents and other essential materials HELD Mouth freshner mixture of spices coriander and aniseeds, so classified under Heading 09.03 of CET.

Issues Involved:

1. Classification of the product "Mouth Freshner" under the Central Excise Tariff.
2. Applicability of Chapter Heading 0903.10 versus 2103.10.
3. Interpretation of relevant HSN Explanatory Notes and Board's Circulars.
4. Reliance on previous judgments and legal precedents.
5. Consideration of market understanding and common parlance for classification.

Detailed Analysis:

1. Classification of the product "Mouth Freshner" under the Central Excise Tariff:

The primary issue revolves around whether the product "Mouth Freshner" should be classified under Chapter sub-heading 0903.10 or 2103.10. The Revenue argued that the product should be classified under Chapter sub-heading 2103.10, which pertains to "mixed condiments and mixed seasonings." The product is a mixture of aniseeds, Magajtarbuj seeds, coriander seeds, saccharin, licorice, menthol, borneol, permitted flavors, and preservatives, and is sold as "Crane-Mouth Freshner."

2. Applicability of Chapter Heading 0903.10 versus 2103.10:

The Revenue contended that the product should be classified under Chapter Heading 2103.10 as it is understood in the market as spices. They relied on the ruling of the Apex Court judgment in Shree Baidyanath Ayurved Bhavan Ltd. v. CCE, Nagpur, which emphasizes the popular meaning and commercial/trade parlance for classification. However, the Commissioner (A) classified the product under Chapter sub-heading 0903.10, which pertains to "Coffee, Tea and Spices," based on Board's Circular No. 197/31/96-CX dated 15-4-1996.

3. Interpretation of relevant HSN Explanatory Notes and Board's Circulars:

The Commissioner (A) relied on HSN Explanatory Notes and Board's Circular No. 197/31/96-CX, which support the classification of coriander seeds and similar products under Chapter 0903.10. The Chemical Examiner's opinion also supported this classification, stating that the sample is a mixture of spices and other additives. The Explanatory Notes of Section 21.03 of the HSN clarify that mixed condiments containing spices fall under Chapter 21 only if the mixture loses the essential character of spices, which was not the case here.

4. Reliance on previous judgments and legal precedents:

The Revenue cited the case of MTR Food Products v. CCE, Bangalore, where Sambhar mix/Rasam mix was classified under Chapter Heading 21.04. However, this case was distinguished as the products involved were not consumed directly and were used for cooking purposes. The Tribunal found this judgment not applicable to the present case. The Commissioner (A) also referred to the judgment in Shree Baidyanath Ayurved Bhavan Ltd., emphasizing that the product should be classified based on how it is understood in the market.

5. Consideration of market understanding and common parlance for classification:

The Tribunal upheld the Commissioner (A)'s findings that the product "Mouth Freshner" is understood in the market as a mixture of spices and not as a condiment or seasoning. The product retained the essential character of spices, as evidenced by the Chemical Examiner's report and the market understanding. The reliance on the Board's Circular No. 197/31/96-CX, which classifies similar products under Chapter 0903.10, further supported this classification.

Conclusion:

The Tribunal found no merit in the Revenue's appeal and upheld the Commissioner's order classifying the product under Chapter sub-heading 0903.10. The Tribunal emphasized the importance of market understanding, the essential character of the product, and the relevant HSN Explanatory Notes and Board's Circulars in determining the correct classification. The appeal was rejected, affirming the classification of "Mouth Freshner" under Chapter 0903.10.

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