2024 (9) TMI 175 - AT - Central Excise

Entitlement for benefit of N/N. 12/2012 CE dated 17.03.2012 - Revenue classified goods under 21069099 saying that food preparation of cleared are not sealed containers - HELD THAT - Whereas, the classification by Revenue is contrary to the facts of the case that appellant is selling the goods in packed condition which means that the appellant is selling the goods in sealed container. Therefore, the serial no. 38 of the notification is not applicable to the facts of the case and the appropriate classification of the good by the appellant is 210690 which is enumerated at Sl. no. 37 of the notification and same is having nil duty. Therefore, as contents of the notification are very clear and applicable to the facts of the case, in that circumstances, it is held that the classification of the goods in question is TSH 210690 and appellant is entitled to benefit at notification no. 12/2012 CE dated 17.3.2012 at serial no. 37 thereof. The demand of duty on the issue of classification is not sustainable against the appellant - As demand already been set aside no penalty is imposable on the appellant - appeal allowed.

Summary

Issues Involved:
1. Classification of goods under Central Excise Tariff.
2. Applicability of Section 4 or Section 4A of the Central Excise Act.
3. Entitlement to exemption under Notification No. 12/2012-CE dated 17.03.2012.
4. Validity of demand and penalties imposed.

Issue-wise Detailed Analysis:

1. Classification of Goods under Central Excise Tariff:
The appellant classified their products under Chapter Sub-heading No. 2106 9099 of the First Schedule to the Central Excise Tariff Act, 1985. The dispute arose regarding the classification of goods such as Bhujia, noodles, and cheese balls, which the appellant contended should fall under this sub-heading. The Tribunal found that the appellant's classification was correct and aligned with the supplementary note of Chapter 21, which includes products like "Namkeens," "mixtures," and "Bhujia" under Tariff Item 2106 9099.

2. Applicability of Section 4 or Section 4A of the Central Excise Act:
The Show Cause Notice alleged that the appellant incorrectly valued their goods under Section 4A, which allows for abatement, instead of Section 4. The Adjudicating Authority confirmed that the goods should be assessed under Section 4 of the Act. The appellant accepted this finding, and it was not a subject of dispute in the appeal.

3. Entitlement to Exemption under Notification No. 12/2012-CE dated 17.03.2012:
The core issue was whether the appellant was entitled to the exemption under Serial No. 37 of Notification No. 12/2012-CE, which provides a nil duty rate for specific food preparations. The Tribunal examined the notification and found that the appellant's goods, sold in sealed containers, were appropriately classified under Serial No. 37, which includes "Sweetmeats," "namkeens," "bhujia," and similar edible preparations. The Tribunal rejected the Revenue's contention that the goods should be classified under Serial No. 38, which pertains to food preparations not cleared in sealed containers.

4. Validity of Demand and Penalties Imposed:
Given the Tribunal's finding that the goods were correctly classified under Serial No. 37 of Notification No. 12/2012-CE, the demand for duty and the associated penalties were deemed unsustainable. The Tribunal set aside the demand raised in the Show Cause Notice dated 27.01.2014 and ruled that no penalties were imposable on the appellant.

Conclusion:
The Tribunal concluded that the appellant's classification of goods under TSH 210690 was correct, and they were entitled to the exemption under Serial No. 37 of Notification No. 12/2012-CE dated 17.03.2012. Consequently, the demand for duty and penalties was set aside, and the appeal was allowed with consequential relief.