2015 (3) TMI 256 - AT - Central Excise

Tribunal Upheld MTKP Classification, Rejects Duty Appeal & Penalties

Hindustan Gum & Chemicals Ltd. Versus Commissioner of Central Excise & Service Tax, Ahmedabad

The Tribunal upheld the classification of Modified Tamarind Kernel Powder (MTKP) under Chapter 13 and rejected the appellant's appeal regarding liability ... Waiver of pre-deposit - whether the appellant is liable to pay Central Excise duty of ₹ 1,12,369/- demanded under Section 11A of the Central Excise Act, 1944.with interest and imposition of penalty under Rule 25 of the Central Excise Rules, 2002, for mis-classification of Modified Tamarind Kernel Powder (hereinafter referred to as MTKP) - Held that:- order of the lower authorities as regards the classification of the excisable product MTKP is correct to the extent that it falls under chapter 1302.3900 as has been decided by the Tribunal in assessee's own previous case [2012 (7) TMI 748 - CESTAT, NEW DELHI]. To that extent, appeal filed by the appellant is liable to be rejected and we do so. As regards the demand of duty for the goods which were cleared from the factory premises, we find that Revenue has no case inasmuch as it is undisputed by both the lower authorities that quantity of 16000 Kgs stand exported and the documentary evidence has been accepted as to the export of such goods. It is settled law that in case the goods are finished and exported, the question of demand of duty does not arise. To that extent the impugned order confirming demand of duty and interest thereof is unsustainable and liable to be set-aside and we do so. - Since there is no duty liability that can be fastened on the appellant, we do not find any reason for visiting the appellant with any penalty, more so under Rule 25 of the Central Excise Rules, 2002. To that extent the impugned order is liable to be set-aside. - Decided partly in favour of assessee. Issues:1. Liability to pay Central Excise duty under Section 11A of the Central Excise Act, 1944 for mis-classification of Modified Tamarind Kernel Powder (MTKP).2. Applicability of penalty under Rule 25 of the Central Excise Rules, 2002.Analysis:1. The primary issue in this case revolved around the liability of the appellant to pay Central Excise duty for the mis-classification of Modified Tamarind Kernel Powder (MTKP). The Tribunal examined the facts and submissions from both sides. It was established that the goods in question were exported, and the authorities demanded duty solely based on the absence of export documents (ARE-1). However, the Tribunal noted that the classification of MTKP under Central Excise Tariff 1302 3900 had already been decided in a previous order. Consequently, the Tribunal rejected the appeal as the lower authorities' classification was deemed correct, and the duty demand was found to be unsustainable due to the undisputed export of the goods.2. Regarding the imposition of penalty under Rule 25 of the Central Excise Rules, 2002, the Tribunal determined that since there was no duty liability on the appellant due to the exported goods, there was no justification for imposing any penalty. As a result, the Tribunal set aside the penalties and demands raised against the appellant. In conclusion, the Tribunal upheld the classification of MTKP under Chapter 13 while nullifying the demands and penalties against the appellant based on the detailed analysis and legal considerations presented in the judgment.