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TMI Blog2008 (6) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... ryani Pulav Masala/Shahi Biryani Masala, 6)Meat Masala, 7)Chicken Masala, 8) Tandoori Chicken Masala, 9) Special Garam Masala, 10) Tea Masala/Super Masala, 11)Pav Bhaji Masala, 12)Sambhar Masala, 13)Chaat Masala, 14)Jiraloo, 15)Rasam Powder, 16)Pani Puri Masala, [hereinafter referred as products in question). It appeared that the assessee wrongly classified the said products under Ch.0903.10 instead of Ch. S.H. 21.03 Schedule of Central Excise Tariff Act, 1985 and clearing the same at nil rate of Central Excise Duty in as much as :- Rasam Powder : - The assessee classified the product under Ch.Sh.0903.10 and claiming nil rate of C.Ex. duty. Thus the notice claimed the product as spices but it was found out that the product was marketed as Rasam Powder and not as the spices. Moreover it is described as the product as 'perfect blend' as mentioned on the packing of the product which aptly indicates that the product is simply not a 'mixture'. It was a known fact that 'Rasam Powder was a particular recipe or particular food preparation/dish. The ingredients mentioned on packaging of the product indicated that it contained Pigeon Pea [Toover Dal/Arhar Dal] which was definitely not the ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. All these products are not simply spices as generally known but these were identified along with particular recipe e.g. 'pani puri', 'pav-bhaji', 'Chhole', 'biryani', 'pulav', Tandoori chicken' etc. Furthermore the 'directions for use' printed on the packaging of these products [e.g. Punjabi Garam Masala, Chat Masala, Sabji Masala etc.] indicated that initially the preparation was to be done by user as they i.e. user normally did and thereafter the product in question were to be added for additional/particular flavour to the dishes. These directions for use distinctly bring out that these products were different from spices as commonly known/perceived and being used. These products were not substitute to the masala/spices' but an addition as mentioned above to give specific flavor/taste as known for particular recipe. Even the product 'Garam masala' of the noticee was to be used in addition to the spices being normally used by customers as indicated on the packaging of the product. Thus all above products were used in particular recipe and were not simply spices as claimed by the noticee for Central Excise classification. In other words with addition of these products a specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mined, as it is not possible to separate the various ingredients. It was further submitted that due to this it is not possible to ascertain what is the essential character of the products in question. It is his submission that respondents have not given the percentage of ingredients in each of the products in question. It was submitted that even today the respondent has not given the same, despite specifically requesting for the same. He draws our attention to the cartons of the various products in question, and submits that they are mixture of various spices and other ingredients and submits that the ingredients include items, which cannot be classified as spices under chapter No.9 of the schedule to the Central Excise Tariff Act, 1985. He draws our attention to the Chapter note no.3 of Chapter 9 and submits that plain reading of note no.3 would indicate that any addition of other substances to spices is allowed and will be covered under chapter 9, provided the resulting mixture retain the essential character of spices included in the said chapter heading i.e.0903. It is his submission that in the absence of the percentage of the ingredients it is not possible to come to a conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r chapter heading no.0903 as they are not spices per se and hence there has to be determination of the entity. For this proposition he relies upon the decision of the Tribunal in the case of Denso Kirloskar Industries Pvt. Ltd., Vs Commr. Of Cust. (Appeals), Chennai - 2003 (158)ELT 187. It is submitted that adjudicating authority has erred in not noting the relevant chapter notes and section notes while passing the impugned orders. It is submitted that the chapter notes and section notes have over-riding force on the respective headings. For this proposition he relies upon the order of the tribunal in the case of Tractor and Farm Equipments Ltd., and others Vs Collector of Customs, Madras and others - 1986 (25) ELT 235. It was submitted that the past practices followed by the department should not a hurdle to take a different view as is held in the case of Eastern Pigments (P) Ltd., - 1999 (107) ELT 510. For the proposition that in that case it may be that the products in question were earlier classified under chapter 9 but the revenue is not precluded in taking a different view now on the very same products. It was submitted that the tribunal in the case of Hindustan Lever Ltd., V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on there has to be uniformity. For this proposition he relies upon the decision of the Apex court in the case of Damodar Malpani Vs CCE - 2002 (146) ELT 483 (SC) and also decision of Tribunal in the case of R.K. Chemicals Vs. Commr of Customs - 2007 (220) ELT 160 and in the case of Thermosystems Vs CCE, Hyderabad - 2004 (178) ELT 402. It was further submitted that the revenue was given liberty by the Tribunal to rebut the evidence submitted by the respondent and draws our attention to the rebuttal letter to point out that there is no rebuttal of the information obtained under RTI act. He draws our attention to chapter note no 3 of chapter 9 and submits that that said note has three parts viz vegetable products and mainly used as condiments, other added ingredients can be present provided the essential character is maintained and they are commonly known as 'Masalas'. It is his submission that in reply to the show cause notice the respondent had taken a specific ground that the products in question contain only 4% to 5% of other ingredients and it is his submission that the revenue accepts this, as there is no rebuttal in the grounds of appeal. He reads the show cause notice and subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rketed as such. 6. In rejoinder learned Jt. CDR would submit to be classified under chapter the ingredients should be only spices and the respondent did not adduce evidence that products in question do not include other ingredients. 7. We considered the submissions made by both sides at length and perused the records. The issue in this case is regarding the correct classification of the products in question. The adjudicating authority has come to the conclusion that the products in question merit classification under chapter heading no. 0903 while the revenue is disputing the same. In order to appreciate the rival claims it is necessary to reproduce the competing tariff entries, those are as under: 09.03 Spices 0903.10 - Put up in unit containers and Bearing a brand name Nil 0903.90 - Others unit containers and bearing 16% Sauces, ketchup and the like and Preparations therefore; mixed Condiments and mixed seasonings; mustard flour and meal and prepared mustard unit containers and bearing 16% 2103.10 - Put up in mustard flour and meal and prepared brand name Nil 2103.90 - Other Nil 8. On careful perusal of the entries it can be noted that chapter sub heading no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, has always mentioned that the products in question had various different spices in powder form up to 96% of the total ingredients and other ingredients formed only 4% to 5% of the total ingredients. We find that the revenue has not disputed these contentions with any contrary evidence and hence the submissions of the learned Jt. CDR that the respondent has not submitted the percentages of the ingredients to arrive at the essential character of the products in question seems to be totally mis-placed. If the 96% of the total ingredients are spices then by mere addition of some quantity of other ingredients may not be sufficient to arrive at the conclusion, that by addition of these other ingredients the mixture of spices has not retained their essential character. We find that the reliance placed by the learned counsel on the CBEC circular no. 427/60/98 -CX dated 30.10.98 is correct. CBEC in the said circular was concerned with the correct classification of compounded asafoedita, which contained 85% of other ingredients like wheat flour and edible gum, despite this, it was directed that compounded asafoedita will be asafoedita, as the essential character is of asafoedita and not w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classification in the Indian context. It is a common knowledge that the Indian cuisine includes mixtures of various spices that are commonly known as 'Masala'. The inclusive portion would cover in its ambit the products in question in this case as there is no contrary evidence led by revenue. 11. We further find that the Central Board of Excise and Customs vide Circular No.205/39/96-CX dt. 30.4.1996 were clearing doubts regarding the classification of Indian traditional convenience food mixes, masalas and condiments we may reproduced the same. Board has received representations from 'Indian Food Industries' Association and others seeking clarification as regards the classification of various Indian traditional convenience food mixes, masalas, spices and condiments such as puliyougare powder, vangibath mix, instant sambar mix, vangibath powder, sambar powder, instant bisibelebath, rasam powder, bisibelebath masala, mix spiced chutney powder, curry powder, pickle masala, garam masala etc. 2. From the reports received from the Commissionerates, it is observed that while in some places the products in question are being classified as either 'spices' of Chapter 9 of CET or as 'Mixed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the literature on the subject is that the essential character of these substances is in their function, viz., to add flavour, aroma and pungency to various food preparations. 3.3 Chapter Notes 9(b) and 9(c) of Chapter 21 of CET no doubt give an indication of the type of preparations which are intended to be included in Heading 21.08 of CET. However, it must be remembered that Heading 21.08 is a residuary entry in Chapter 21 and the Rules for the interpretation of the Schedule require that the heading which provides the most specific description shall be preferred to headings providing a more general description. Further, Heading 21 in HSN excludes spices of Chapter 9. 4. Consequently, products which are predominantly mixtures of spices/condiments/seasonings and which are used as such or in the making of food preparations mainly for their aromatic, flavouring or seasoning properties would merit classification under the specific entry of spices in Chapter 9 or Heading 21.03 of CET. However, products which in addition to spices, flavouring and seasoning substances also contain, other foodstuffs in such quantity that the products as such or after processing are capable of being us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Tariff Act. The Bench held as under:- We have carefully considered the submissions and have perused both the orders. The finding given by the Commissioner is very exhaustive. He has analyzed every aspect of the matter and also in the light of the HSN Explanatory notes. The Revenue wants the product to be classified under Chapter Heading 21.03, which description deals only with sauces and ketchups. The item does not fit into the said items described in Chapter Heading 21. The learned JDR relied on the judgment rendered in the case of MTR Food Products v. CCE, Bangalore - 2000 (118) E.L.T. 392 (T), which deals with Sambhar mix/Rasam mix, which has been held to be classifiable under Chapter Heading 21.04. These items are not consumed directly. They are required to be used for cooking purposes, as in the case of items falling under Chapter Heading 21.04. Therefore, this judgment is clearly distinguishable. Even in terms of the Apex Court judgment rendered in the case of Shree Baidyanath (supra), the classification has to be done in the manner in which the goods are understood in the market and popularly known as. In that light, the item has to be considered only as 'Spices' as hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as stated:- "….when an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause'. (Emphasis supplied)" 14. It is also to be noted that the Revenue's Endeavour in this case is to seek classification of the products in question under Chapter heading No. 21.03/21.08. The main plank of arguments of the Revenue is that these are all mixed condiments and mixed seasoning. In the matter of taxability of the product under the Central Excise Tariff Act, the act being same all over India, uniformity in classification is a must. The department's understanding of the product in question is clearly borne out from Circular dt. 30.4.1996 (as reproduced at Paragraph II hereinabove the understanding of the department in the current case also seems to be an identical as of the Board. Our attention was drawn by the Ld. Counsel, to the classification of the product in question in various Commissionerates. The respondents under the RTI Act, sought information of the identical products, as is manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that each and very case has to be examined in the light of our above observations, and it is for the competent Central Excise Officers to come to correct decisions in consonance with the principles of uniformity, equity and justice". It is difficult to understand the reasoning of the Tribunal. The least that the Tribunal could have done in the interest of 'uniformity' was to call upon the Revenue Authorities to explain why they were making a distinction between the appellants product and that of M/s. Chandulal K. Patel without subjecting the appellants' product to any chemical analysis. In their appeal from the decision of the Tribunal before us the appellants have again raised the issue that the Tribunal should have considered the fact that the appellants and Chandulal K. Patel & Co's products were identical and were the outcome of an identical process, and that since the latter had been exempted from paying any central excise duty on the ground that their product was classifiable under Tariff Heading 24.04, the appellants should get the same benefit. We also find that, Tribunal in the case of Thermosystems Vs. Commissioner of Central Excise, Hyderabad as reported at [2004(178 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haat Masala, Tea Masala, we find that the reasoning given by us in respect of all other products in question as indicated in the above paragraphs would apply squarely. Ld. Jt. CDR submitted that classification of 'Rasam Powder' would be covered by the decision of Tribunal in the case of MTR Food Products (2000(118) ELT 392 (Tri.)]. We find that the products in question in this case is different than the product in the case of MTR Food Products (Supra). In the case MTR Foods the products was 'Rasam Mix' itself which was to be just added to boiling water, vehicle in the case before us the Rasam Powder is to be added to complete to complete prepared Rasam. Hence we are of the considered view that the decision of the Tribunal in the case of MTR Products (supra) may not apply to the facts and circumstances of the case before us. Accordingly, we are of the considered opinion that the impugned order of the adjudicating authority is correct and does not suffer from any infirmity in respect of the classification of the products except for 'jiralu'. 17. The impugned order is upheld to the extent of all other products and as regards classification of product 'Jiralu' we remand the matter bac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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