9911796707
TMI Blog2006 (10) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... y of Rs. 10,00,000/- under Rule 25 of the Central Excise Rules 2002 has been imposed on the appellant unit. A personal penalty of Rs. 5,00,000/- has been imposed on A. J. Tharakan, Chairman and Director of the appellant unit under Rule 26 of the Central Excise Rules 2002. The appellants strongly challenge the impugned order. 3.Shri A. K. Jain, learned advocate appeared on behalf of the appellants and Shri K. Sambi Reddy, learned JDR appeared for the Revenue. 4.The learned advocate urged the following points. (i) The appellant unit is engaged in the processing of fish, shrimps, prawns, etc., which are purchased from others. The Revenue conducted investigations and came to the conclusion that the impugned items are chargeable to duty under Chapter 16 (S. H. No. 1601.10) of CETA 1985. (ii) The case of the Revenue is based on the following facts. (a) Usage of Sodium Tri Poly Phosphate (STPP) (b) Usage of Sodium chloride (c) Usage of natural paprika (d) Blanching (iii) The Commissioner did not take into account the four certificates given by MPEDA, CIFT and Kerala Fisheries College on the ground that the same had not been relied on in the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Commissioner's finding that only those crustaceans (which include prawns and shrimps) fall in Chapter 3 which are in shells and boiled in water (and not which are deveined and deshelled or which have been prepared or preserved and put up in unit containers), is beyond the Show Cause Notice. The Commissioner's finding would imply that the deveined/deshelled crustaceans received in the appellant's unit from the Peeling-Sheds would themselves fall in Chapter 16, being not in shells and that being so the same would not attract any further levy even otherwise. This negates the HSN Explanatory Notes as per which crustaceans whether in shell or not or whether in parts chilled, frozen, dried and salted are covered by Chapter 3. (xi) Placement of crustaceans in unit containers is not excluded from the purview of Chapter 3. (xii) The Commissioner has not disclosed in his order as to how he says that chilled, frozen, salted crustaceans can be cooked in 45 - 90 seconds. He gives no evidence or material therefore. (xiii) The term 'partially cooked' used in EIA, Chennai's reports cannot be equated to the term 'cooked' used in Chapter 16. (xiv) Heading 16.01 covers only prepara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d fall in Chapter 3. (xviii) Denial of retest by the Commissioner and that too only in his Order-in-Original, despite the same having been applied within 13 days, much before the time limit prescribed along with requisite fee of Rs. 8,000/- is violative of the Principles of Natural Justice as well as contrary to the departmental supplementary instructions. The following three decisions were relied on : (a) 1988 (33) E.L.T.137 (T) - Kiran Spinning Mills v. CCE, Bombay. (b) 2001 (129) E.L.T. 701 (T) - Rathi Ispat Ltd. v. CCE, Meerut. (c) 2004 (169) E.L.T. 175 (T) - Yorks Exports v. CC (Exports), Mumbai. (xix) The Commissioner's finding that CRCL, New Delhi is beyond his jurisdiction is not correct in view of Board's instructions dated 3-5-1956 appearing in Customs Appraising Manual Volume-III. The retesting can be done only by the CRCL, New Delhi irrespective of the fact whether the testing was done by the Customs Lab or by any other outside agency. (xx) The denial of appellant's request for the cross-examination of the two Chemical Examiners of EIA, Chennai namely Shri P. K. Kalaeselvan and Shri S. Sampooranam (who had tested the samples) and that too in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the points raised by the appellant and a very detailed finding is given justifying the classification of the impugned items under Chapter 16. He requested the Bench to uphold the Order-in-Original. 6.We have gone through the records of the case very carefully. The main issue is the correct classification of the impugned products. According to the appellants, the impugned products merit classification under Chapter 3 of CETA, whereas the Department's contention is that the classification would be under Chapter 16. Under Chapter 3, the rate of duty is nil but under Chapter 16 the rate of duty is 16%. 6.1Let us try to understand the impugned product and the processes undertaken by the appellants. The impugned products, which are normally packed in polythene pouches are described as peeled and deveined prawns. There are different sizes like medium prawns, tiny prawns, small prawns, large prawns, jumbo prawns, etc. Chapter 3 of the CETA has the following heading 'Fish and Crustaceans, Molluscs and other Aquatic Invertebrates'. The impugned product is not fish, it is described as prawns. We understand that the prawns fall under a broad category of aquatic creatures known as crust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then individually quick frozen and then packed in polythene pouches. The above process uses a word blanching. What is blanching? The normal dictionary meaning of the verb blanch is 'to prepare food, especially vegetables by putting it into boiling water for a short time'. The blanching process is not confined only to the impugned products under consideration in this appeal. In Wikipedia (online encyclopedia) describes blanching as follows : Blanching is a cooking term that describes a process of food preparation wherein the food substance, usually a vegetable or fruit, is plunged into boiling water, removed after a brief, timed interval and finally plunged into iced water or placed under cold running water (shocked) to halt the cooking process. Uses of blanching Peeling Blanching loosens the skin on some fruits or nuts, such as onions, tomatoes, plums, peaches, or almonds. •Flavor Blanching enhances the flavor of some vegetables, such as broccoli, by releasing bitter acids stored in the cellular structure of the food. •Appearance Blanching enhances the color of some (particularly green) vegetables by releasing gases trapped in the cellular material that obscure the green ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surface levels. The product has to be cooked before consumption. Thus, the experts who are dealing with crustaceans and other aquatic invertebrates have all categorically stated that a blanched product cannot be considered as a cooked product. It is also pertinent to note that blanching is carried out before freezing which is a process covered by Note 2 of Chapter 3. In the light of the above opinions, it is very difficult to hold that the impugned products can be considered as preparations of crustaceans falling under Chapter 16 of CETA. 6.4Now let us turn our attention to chapter 3. According to Note 2 of Chapter 3, the said Chapter covers products, which are chilled, frozen and salted, in brine, dried or smoked but not otherwise prepared and crustaceans, in shell simply boiled in water. From the above note, we understand that the Chapter 3 products also undergo certain processes. Since Chapter 16 covers the preparations of items mentioned in Chapter 3, a question arises as to what is the difference between the products in Chapter 3 and those in Chapter 16? The Central Excise Tariff itself does not throw much light on the issue. Therefore, we can take the help of the explanato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference to the fat that prawns (crustaceans) in their shell simply boiled in water could be classified under Chapter Heading 3. Hence the processed, prepared and preserved fish and prawns manufactured and cleared in unit containers and bearing a brand name viz., 'SUMERU' are to be rightly classified under Chapter 16 under CETA 1601.00. The Commissioner has not considered the opinions of the experts submitted by the appellants at all. His inference from Note 2 to Chapter 3 that only crustaceans in shell simply boiled in water is covered by that Chapter is not correct. When the note says that the Chapter covers products which are chilled, frozen and salted in brine, dried or smoked are covered and further indicates that crustaceans in shell simply boiled in water is also covered, it doesn't mean that it covers only crustaceans in shell simply boiled in water. The Note means that crustaceans in shell simply boiled in water are included in the Chapter. The first part of the Note covers all products of Chapter 3, which are chilled, frozen and salted in brine dried or smoked. It should not lead one to conclude that deshelled, deveined crustaceans would not be covered under the Chapter. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eparation into ready to eat foodstuff. In the processing of shellfish natural paprika is used. Usage of natural paprika has also nothing to do with any kind of preparation of cooking or preservation of meat since it is solely used commercially for colouring shrimps so as to obtain uniformity in their appearance. Blanching is done before chilling being essential pre-requisite for chilling and freezing because the very purpose of achieving the bacterial and product standards cannot be achieved without blanching and this is the sole purpose of chilling and freezing. Blanching neutralizes or reduces the bacterial load and inactivates the enzyme present in the product. Blanching enhances the foods natural flavour and colour and therefore is necessary. The blanched product is not a partially cooked product or a product that is ready to eat. It only gives a sterilizing effect reducing the bacterial load at surface levels. The product has to be cooked before consumption. Total plate count at 37°C for shrimps on heat exposure like cooking or blanching is normally seen to be around l0000 and a similar raw product's TPC is around 100000. Sd/- Dr. D. D. Nambudiri Dean. TO WHOMSOEVE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal plate counts do not exceed 10000, whereas these are 1,00,000 for peeled, deveined and frozen or raw shrimps/prawns. He has also ignored the fact that the usage of sodium chloride and STPP is one of the methods used in salting, chilling and freezing, which processes are covered under Chapter 3 of CETA and such usage does not contribute to cooking. Further, he has not appreciated that blanching is an essential pre-requisite for chilling and freezing (which processes are covered under Chapter 3). From this also we can conclude that blanching is also covered under Chapter 3. The experts have stated that natural paprika has nothing to do with any kind of preparation cooking or preservations of shrimps. Food processing is a highly technical subject and while deciding issues, which have great bearing on leviability to Central Excise duty, the Adjudicating officer should respect the opinions of the experts submitted to him. They cannot be brushed aside. The Commissioner, with regard to the letters of the experts, has stated that the certificates opinion were not relied upon in the case and those opinions can't cloud the reality. There is a saying that mind is like a parachute and it ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
