9911796707
TMI Blog2006 (11) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore the benefit of Notification would not be admissible and that the product would attract Central Excise duty at the Tariff rate of 18%. For the period from June 1998 to February 1999, the respondents had cleared SDC on payment of duty at the concessional rate of 8% and therefore they had short levied and short paid differential duty at the rate of 10%. Hence show cause notices dt. 21-12-98 and 22-4-99 were issued proposing modification of the declaration by denying the benefit of the notification, and proposing recovery of differential duty of Rs. 27,79,540/- and Rs. 99,73,245/- respectively and proposing recovery of interest and imposition of penalty. The Assistant Commissioner confirmed the demands and imposed penalty of Rs. 20 lakhs (Rupees twenty lakhs only) on the assessees on the ground that SDC was neither an instant food mix nor preparation in the nature of instant food mix as specified in the notification. The Commissioned (Appeals) set aside the demands and penalty and allowed the assessees' appeal, relying upon HSN Explanatory Notes to budgetary changes in the year 1998-99, and upon several decisions of the Tribunal and the Hon' ble Supreme Court; hence this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We also note that certificate of registration was given by Agricultural and Processed Food Products Export Development Authority of Ministry of Commerce for manufacture of Rasna Soft Drink Concentrates. The authorities under the Prevention of Food Adulteration Act have also issued a licence for the product in question, which was referred to and relied upon by the assessee. The Ministry of Food Processing Industries, Government of India have also written to the assessee on 18-7-1996 that Rasna Soft Drink Concentrates by virtue of its ingredients, is an agro product covered under Fruit Products order, 1955 as determined by Central Food Products Advisory Committee. 5.Common parlance also recognizes in view of the affidavits of Mrs. Malti Jagasia, housewife, Mr. Ashok Patel, partner of Alka Stores (Trader) and Mr. Dilip Jain, partner of Mahavir Trading that the product in question is a preparation in the nature of instant food mix similar to other food mixes like Rasam mix, Vada mix, idli mix etc. It is also noted that under the provisions of Gujarat Sales Act, 1969, the product is classified as article of good and tax being paid accordingly. 6.The Revenue relies upon the judgement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion occurs. There was also no evidence placed on record before the Court of common understanding or the ordinary persons understanding of the product. 8.During the period covered in the present appeal, the Central Excise Tariff was aligned with HSN whereas this was not the position during the period covered in the Parle Exports (P) Ltd. 9.We also note that during the relevant period, the product in dispute was being classified under ITC (HS) classification under Exim Code 21.06 covering food preparations not elsewhere specified or included. The Exim Code No. 210690 01 specifically covered soft drink concentrates as food preparation not elsewhere specified. It is also brought to our notice that with effect from 2005-06, a specific tariff item covering food preparations not elsewhere specified or included has been incorporated and soft drink concentrates are covered under that heading. In fact, at present, the assessee is clearing the goods classifying the same under CET sub-heading 2106 90 11. 10.For the above reasons, we agree with the respondents herein that Rasna Soft Drink Concentrates can be considered as being in the nature of food preparation and in the nature of inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on notifications should be understood by the language employed therein bearing in mind the context in which the expressions occur, that the words used in the provision imposing taxes or granting exemption should be understood in the same way in which these are understood in ordinary parlance, that an exception to the general rule of taxation is to be construed strictly against those who invoke the benefit and that absurd results of construction should be avoided. 14.Applying the ratio of the Honourable Supreme Court' s decision in Parle Exports (cited supra), I am of the view that the impugned products do not fall in the exempted category under Notification No. 5/(9)8-C.E., dated 2-6-1998. Consequently, I set aside the impugned Order-in-Appeal and restore the Order-in-Original confirming the duty demand of Rs. 1,27,52,785/-. As regards the penalty, this being a case of disputed classification, I set aside the penalty imposed by the original authority. Interest would be chargeable in accordance with the legal provisions in force. 15.Department' s appeal is allowed in the above terms. Sd/- (Chittaranjan Satapathy) Member (Technical) The following points of differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lk, etc.) 8% 9 Condition 9 : In no credit of the duty paid on the inputs used in the manufacture of such goods has been availed of by the manufacture under Rule 57A or 57B of the Central Excise Rules, 1944. 18.Now the point for determination is that whether SDC is a preparation in the nature of instant food mix or not. The SDC consists of the following ingredients as could be seen from page 3 of the department' s Appeal Memorandum. "A. Principal/Active ingredients: 1. Natural Essential Oils and oleoresins extracted from fruits and/or plant materials and of vegetable origin such as orange oil, lamon oil, lime oil, rose oil, khus oil, cardemon oil, coriander oil, ginger oil, cumin oil etc. depending upon the flavour. 2. Food acids such as citric acid, malid acid, tartaric acid are also derivatives of fruit plant etc. B. Other ingredients : 1. Preservative 2. Food Colour 3. Solvents The composition of principal/active ingredients is 80% of the product and 20% of the other ingredients." This apart, it is also an admitted position of fact that SDC also contains dextrose, lactose, permitted stabilizer, emulsifiers, vanaspati, etc. depending upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over only instant food mixes as observed by the Hon'ble Technical Member. 21. The Hon'ble Member (Technical) appears to have not considered the common parlance test which is one of the most important tests for deciding the classification of a product as held by the Hon'ble Apex Court and in fact, in the present case, it has been proved by the assessee that SDC is a product in the nature of instant food mix. As matter fact the assessee has placed on record the affidavits of persons from various fields. 22.The Hon'ble Member (Technical) has also not taken into consideration the amendment in the Central Excise Tariff in 2005-2006 whereby SDC has been specifically covered under Tariff Item 2106 covering food preparation not elsewhere specified. It is an admitted fact that as on date, the very same product SDC is being assessed by the department as a food preparation, it would not have been classifiable under Tariff Item 2106. Further, the amendment as well as HSN, Custom Tariff and ITC (HS) code clearly fortifies the claim of the assessee that all throughout the product has been considered as a food preparation after coming into force of the new tariff since 1986 (after its alignme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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