2012 (12) TMI 342 - AT - Central Excise

Tribunal classifies 'Jaljeera' & 'Hazmi' as 'packed masala' exempt from excise duty

The Tribunal classified 'Jaljeera' and 'Hazmi' as 'packed masala' under Chapter 9 of the Central Excise Tariff Act, 1985, exempt from excise duty. Relying ... Classification of goods - packed masala - Chapter 9 of the Central Excise Tariff Act, 1985 - waiver of pre-deposit - prima facie case - stay of demand pending appealClassification of goods - packed masala - Chapter 9 of the Central Excise Tariff Act, 1985 - Jaljeera and Hazmi are prima facie classifiable as packed masala under Chapter 9 (Entry No. 0903.10) rather than under Chapter 21. - HELD THAT: - The Tribunal examined the nature and composition of Jaljeera and Hazmi and, having regard to the Supreme Court's reasoning in Commercial Taxes Officer v. Jalani Enterprises that mixtures of ground spices packed for sale constitute 'packed masala', concluded that prima facie the two products fall within the description of packed masala. The Tribunal noted the departmental contention and earlier Tribunal decision taking a contrary view, but on the material before it found that the balance of probabilities favoured classification under Chapter 9 (Entry No. 0903.10). [Paras 5]Prima facie classification of Jaljeera and Hazmi as packed masala under Chapter 9 (Entry No. 0903.10) is accepted for purposes of the interim order.Waiver of pre-deposit - prima facie case - stay of demand pending appeal - Condition of pre-deposit of excise duty, interest and penalty is waived and stay of recovery granted until disposal of the appeal. - HELD THAT: - Applying the well-established interim test, the Tribunal held that because the appellant has demonstrated a prima facie case on classification, the requirement of depositing the demand, interest and penalty would cause undue hardship if enforced at this stage. In consequence, and having formed a view on the merits sufficient for interim relief, the Tribunal allowed the stay application and waived the pre-deposit condition until the appeal is finally disposed of. [Paras 5]The appellant's application for waiver of the pre-deposit and stay of recovery of the demand, interest and penalty is allowed pending disposal of the appeal.Final Conclusion: The Tribunal prima facie accepted that Jaljeera and Hazmi are classifiable as packed masala under Chapter 9 and, on that basis, allowed the waiver of pre-deposit and granted stay of the demand, interest and penalty until the appeal is finally disposed of. Issues:Classification of 'Jaljeera' and 'Hazmi' under Central Excise Tariff Act, 1985 - Whether classifiable as 'packed masala' under Chapter 9 or under Chapter 21.Analysis:The appellant, a manufacturer of spices and masalas, sought waiver of pre-deposit of excise duty demand of Rs. 1,19,63,817/- with penalty and interest. The dispute revolved around the classification of 'Jaljeera' and 'Hazmi.' The appellant contended that these items should be classified as 'packed masala' under Chapter 9 of the Central Excise Tariff Act, 1985, exempt from excise duty. The appellant relied on a Supreme Court judgment stating that any mixture of grinded spices in a packet can be considered 'packed masala.' The appellant argued that based on this precedent, 'Jaljeera' and 'Hazmi' should be classified as such under Entry No. 0903.10. The appellant claimed a strong prima facie case justifying the waiver of pre-deposit due to potential undue hardship.On the other hand, the department argued that 'Jaljeera' and 'Hazmi' should be classified under Chapter 21 of the Central Excise Tariff Act, 1985. The department attempted to differentiate the appellant's reliance on the Supreme Court judgment, stating it pertained to a Sales Tax Act issue, not Central Excise Act. The department also referenced a prior Tribunal decision classifying 'Jaljeera' under Chapter 21, with an appeal pending.After considering the submissions, the Tribunal found that based on the Supreme Court judgment, 'Jaljeera' and 'Hazmi' could be classified as 'packed masala' under Chapter 9 of the Central Excise Tariff Act, 1985, specifically under Entry No. 0903.10. The Tribunal concluded that the appellant had established a prima facie case for waiver of pre-deposit. Consequently, the stay application was granted, and the deposit of demand, interest, and penalty was waived until the appeal's disposal.